Explanation Adjusting entries : Adjusting entries are those entries which are recorded at the end of the year, to update the income statement accounts (revenue and expenses) and balance sheet accounts (assets, liabilities, and stockholders’ equity ) to maintain the records according to accrual basis principle. Reversing entries: Reversing entries are made at the beginning of the accounting period when the accountant needs to cancel any entry made in the previous accounting period. It is done in order to eliminate any errors that might have occurred in the calculation of the revenue or expenses and henceforth increase the efficiency of the financial statements for an improved decision making. Provide an example of an adjusting entry and a reversing entry for salaries payable, and the later entry to pay the salaries is as follows: Assume Company A pays employee’s salaries every Friday (5-day work week), the weekly payroll amount is $6,000 and December 31 falls on Tuesday. The adjusting, reversing, and payment entries are, Adjusting entry: Date Account Title & Explanation Debit ($) Credit($) December 31 Salaries expense ( $ 6 , 000 × 2 5 ) 2,400 Salaries payable 2,400 (To record the adjusting entry of salaries expense accrued at the end of the accounting year) Table (1) Salaries expense is component of shareholders’ equity, and it decreases the value of shareholders equity

Intermediate Accounting: Reporting And Analysis

3rd Edition

ISBN: 9781337788281

Author: James M. Wahlen, Jefferson P. Jones, Donald Pagach

Publisher: Cengage Learning

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Chapter 3, Problem 27GI

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Provide an example of an adjusting entry and a reversing entry for salaries payable, and the later entry to pay the salaries.

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Chapter 3, Problem 26GI

Chapter 3, Problem 28GI

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Intermediate Accounting: Reporting And Analysis

Ch. 3 - What is the primary purpose of an accounting...Ch. 3 - What is the relationship between the accounting...Ch. 3 - Show the expanded accounting equation using the 10...Ch. 3 - Explain and distinguish between a transaction; an...Ch. 3 - Explain how the accounting equation organizes...Ch. 3 - What is the difference between a permanent and a...Ch. 3 - Prob. 7GI Ch. 3 - Why is it advantageous to a company to initially...Ch. 3 - What is a perpetual inventory accounting system?...Ch. 3 - Give examples of transactions that: a. Increase an...

Ch. 3 - Give examples of transactions that: a. Increase...Ch. 3 - Prob. 12GI Ch. 3 - Prob. 13GI Ch. 3 - Prob. 14GI Ch. 3 - Prob. 15GI Ch. 3 - Explain and provide examples of deferrals,...Ch. 3 - Prob. 17GI Ch. 3 - Prob. 18GI Ch. 3 - Prob. 19GI Ch. 3 - Prob. 20GI Ch. 3 - Prob. 21GI Ch. 3 - What are the major financial statements of a...Ch. 3 - Prob. 23GI Ch. 3 - Prob. 24GI Ch. 3 - Prob. 25GI Ch. 3 - Prob. 26GI Ch. 3 - Prob. 27GI Ch. 3 - Prob. 28GI Ch. 3 - Prob. 29GI Ch. 3 - What is cash-basis accounting? What must a company...Ch. 3 - On May 1, Johnson Corporation purchased inventory...Ch. 3 - On January 1, Tolson Company purchased a building...Ch. 3 - On July 1, Friler Company purchased a 1-year...Ch. 3 - Prob. 4RE Ch. 3 - Garcia Company rents out a portion of its building...Ch. 3 - Prob. 6RE Ch. 3 - Goldfinger Corporation had account balances at the...Ch. 3 - Prob. 8RE Ch. 3 - For the current year, Vidalia Company reported...Ch. 3 - Use the information in RE3-6, (a) assuming Ringo...Ch. 3 - (Appendix 3.1) Vickelly Company uses cash-basis...Ch. 3 - Financial Statement Interrelationship Draw a...Ch. 3 - Journal Entries Mead Company uses a perpetual...Ch. 3 - Journal Entries The following are selected...Ch. 3 - Adjusting Entries Your examination of Sullivan...Ch. 3 - Adjusting Entries The following are several...Ch. 3 - Adjusting Entries The following partial list of...Ch. 3 - Basic Income Statement The following are selected...Ch. 3 - Periodic Inventory System Raynolde Company uses a...Ch. 3 - Closing Entries Lloyd Bookstore shows the...Ch. 3 - Financial Statements Turtle Company has prepared...Ch. 3 - Worksheet for Service Company Whitaker Consulting...Ch. 3 - Worksheet, Including Inventory Surian Motors...Ch. 3 - Reversing Entries On December 31, 2019, Kellams...Ch. 3 - Special Journals The following are several...Ch. 3 - (Appendix 3.1) Cash-Basis Accounting Puntarelli...Ch. 3 - Adjusting Entries The following information is...Ch. 3 - Prob. 2P Ch. 3 - Adjusting Entries Sarah Companys trial balance on...Ch. 3 - Prob. 4P Ch. 3 - Errors in Financial Statements At the end of the...Ch. 3 - Journal Entries, Posting, and Trial Balance Luke...Ch. 3 - Effects of Errors: During the current accounting...Ch. 3 - Financial Statements Mackenzie Inc. uses a...Ch. 3 - Prob. 9P Ch. 3 - Worksheet Victoria Company has the following...Ch. 3 - Worksheet Devlin Company has prepared the...Ch. 3 - Comprehensive On November 30, 2019. Davis Company...Ch. 3 - Reversing Entries Thomas Company entered into two...Ch. 3 - Reversing Entries On December 31, 2019, Mason...Ch. 3 - Adjusting Entries At the end of 2019, Richards...Ch. 3 - Prob. 16P Ch. 3 - Comprehensive (Appendix 3.1) Dawson OConnor is the...

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Provide an example of an adjusting entry and a reversing entry for salaries payable, and the later entry to pay the salaries.

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Provide an example of an adjusting entry and a reversing entry for salaries payable, and the later entry to pay the salaries.

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