Accrued Expenses Accrued expense refers to the expenses those are unpaid, but the goods and services related to the payment are received in a particular accounting period. These accrued expenses are payable for the business. Business treats accrued expenses as a liability. Adjusting Entries Adjusting entries indicates those entries, which are passed in the books of accounts at the end of one accounting period. These entries are passed in the books of accounts as per the revenue recognition principle and the expenses recognition principle to adjust the revenue, and the expenses of a business in the period of their occurrence. Rule of Debit and Credit: Debit - Increase in all assets, expenses & dividends, and decrease in all liabilities and stockholders’ equity . Credit - Increase in all liabilities and stockholders’ equity, and decrease in all assets & expenses. To record: The adjusting entry for the accrued salary for the period ending on Wednesday.

Question

Novak supply company a newly formed corporation , incurred the following expenditures related to the land , to buildings, and to machinery and equipment. abstract company's fee for title search $1,170 architect's fee $7,133 cash paid for land and dilapidated building thereon $195,750 removal of old building $45,000 LESS: salvage $12,375 $32,625 Interest on short term loans during construction…

Answer 1

Question

Chapter 3, Problem 3.13EX

(a)

To determine

Accrued Expenses

Accrued expense refers to the expenses those are unpaid, but the goods and services related to the payment are received in a particular accounting period. These accrued expenses are payable for the business. Business treats accrued expenses as a liability.

Adjusting Entries

Adjusting entries indicates those entries, which are passed in the books of accounts at the end of one accounting period. These entries are passed in the books of accounts as per the revenue recognition principle and the expenses recognition principle to adjust the revenue, and the expenses of a business in the period of their occurrence.

Rule of Debit and Credit:

Debit - Increase in all assets, expenses & dividends, and decrease in all liabilities and stockholders’ equity.

Credit - Increase in all liabilities and stockholders’ equity, and decrease in all assets & expenses.

To record: The adjusting entry for the accrued salary for the period ending on Wednesday.

(b)

To determine

To record: The adjusting entry for the accrued salary for the period ending on Thursday.

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