
Concept explainers
(a)
Accrual basis principle: According to this principle of accounting, revenue should be recognized at the time when it is earned, doesn’t matter, it is received or not and expense should be recognized when it is incurred, doesn’t matter it is paid or not.
The need for adjustment entry for prepaid insurance.
(b)
The need for adjustment entry for
(c)
The need for adjustment entry for unearned service revenue
(d)
The need for adjustment entry for interest payable

Want to see the full answer?
Check out a sample textbook solution
Chapter 3 Solutions
Financial Accounting
- Dunwell Industries produced 8,500 units during March. The standard quantity of material allowed per unit was 10 pounds at a standard cost of $3.60 per pound. If there was an unfavorable usage variance of $18,360 for March, what amount must be the actual quantity of materials used?arrow_forwardAccounting solutionarrow_forwardI need help with this general accounting question using the proper accounting approach.arrow_forward
- Need Answerarrow_forwardTesla Car Service started the year with total assets of $320,000 and total liabilities of $210,000. During the year, the business recorded $510,000 in revenues, $370,000 in expenses, and dividends of $45,000. What is the net income reported by Tesla Car Service for the year?arrow_forwardThe direct materials quantity variance isarrow_forward
- AccountingAccountingISBN:9781337272094Author:WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.Publisher:Cengage Learning,Accounting Information SystemsAccountingISBN:9781337619202Author:Hall, James A.Publisher:Cengage Learning,
- Horngren's Cost Accounting: A Managerial Emphasis...AccountingISBN:9780134475585Author:Srikant M. Datar, Madhav V. RajanPublisher:PEARSONIntermediate AccountingAccountingISBN:9781259722660Author:J. David Spiceland, Mark W. Nelson, Wayne M ThomasPublisher:McGraw-Hill EducationFinancial and Managerial AccountingAccountingISBN:9781259726705Author:John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting PrinciplesPublisher:McGraw-Hill Education





