Survey of Accounting (Accounting I)
8th Edition
ISBN: 9781305961883
Author: Carl Warren
Publisher: Cengage Learning
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Textbook Question
Chapter 3, Problem 3.24E
Adjustments
Clean Air Company is a consulting firm specializing in pollution control. The following adjustments were made for Clean Air Company:
Identify each of the six pairs of adjustments. For each adjustment, indicate the account, whether the account is increased or decreased, and the amount of the adjustment. No account is affected by more than one adjustment. Use the following format. The first adjustment is shown as an example.
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Requirements 1. and 2. Calculate and enter the adjustment amounts directly in the Adjustments columns. Use letters a through d to label the four adjustments. Calculate and enter the adjusted account balances in the Adjusted Trial Balance columns.
The account names and unadjusted trial balance amounts as provided in the question have been entered into the worksheet for you. Finish the partial worksheet by completing the adjustments and adjusted trial balance columns. Complete the Adjustments columns by
using the letters a through d to label the four adjustments.
Account Names
Cash
Accounts Receivable
Office Supplies
Equipment
Accumulated Depreciation-Equipment
Salaries Payable
Common Stock
Dividends
Service Revenue
Salaries Expense
Rent Expense
Depreciation Expense-Equipment
Supplies Expense
Total
$
Work Today Employment Service
Worksheet
April 30, 2024
Unadjusted Trial
Balance
Debit
1,200
4,200
800
32,800
4,500
2,300
1.400
Credit
$ 14,200
23,900
9,100
$ 47,200 $ 47,200
Adjustments…
Which of the following procedures is correct when determining the amount to enter within the adjusted trial balance section of the worksheet?
Multiple Choice
If the trial balance section has a debit balance and the entry in the adjustments section is a debit, then subtract the amount in the adjustments section from the amount in the trial balance section.
If the trial balance section has a debit balance and the entry in the adjustments section is a credit, then subtract the amount in the adjustments section from the amount in the trial balance section.
If the trial balance section has a credit balance and the entry in the adjustments section is a credit, then subtract the amount in the adjustments section from the amount in the trial balance section.
If the trial balance section has a credit balance and the entry in the adjustments section is a debit, then add the two amounts together.
Select all that apply
Which of the following statements accurately explains how to enter adjustments? (Check all that apply.)
The adjusted balance is computed by taking that account's amount from the Unadjusted Trial Balance column and adding or subtracting
adjustments.
Only the debited or credited account of each adjustment needs to be shown--not both accounts.
Adjustments are entered in a middle column titled Adjustments.
Each adjustment is identified by a letter in parentheses that serves as a cross-reference to the debit and credit side of the adjustment.
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Chapter 3 Solutions
Survey of Accounting (Accounting I)
Ch. 3 - Assume that a lawyer bills her clients $15000 on...Ch. 3 - On January 24, 20Y8, Niche Consulting collected...Ch. 3 - Prob. 3SEQCh. 3 - If the supplies account indicated a balance of...Ch. 3 - The balance in the unearned rent account for Jones...Ch. 3 - Would AT&T and Microsoft Use the cash basis or the...Ch. 3 - How are revenues and expenses reported on the...Ch. 3 - Fees for services provided are billed to a...Ch. 3 - Employees performed services in 20Y8, but the...Ch. 3 - Prob. 5CDQ
Ch. 3 - Is the Land balance before the accounts have been...Ch. 3 - Is the Supplies balance before the accounts have...Ch. 3 - Prob. 8CDQCh. 3 - Prob. 9CDQCh. 3 - Prob. 10CDQCh. 3 - If the effect of an adjustment is to increase the...Ch. 3 - Prob. 12CDQCh. 3 - (a) Explain the purpose of the accounts...Ch. 3 - Prob. 14CDQCh. 3 - Transactions using accrual accounting Terry Mason...Ch. 3 - Adjustment process Using the data from Exercise...Ch. 3 - Financial statements Using the data from Exercises...Ch. 3 - Prob. 3.4ECh. 3 - Accrual basis of accounting Margie Van Epps...Ch. 3 - Classify accruals and deferrals Classify the...Ch. 3 - Classify adjustments The following accounts were...Ch. 3 - Adjustment for supplies Answer each of the...Ch. 3 - Adjustment for prepaid insurance The prepaid...Ch. 3 - Adjustment for unearned fees The balance in the...Ch. 3 - Adjustment for unearned revenue For a recent year....Ch. 3 - Effect of omitting adjustment At the end of...Ch. 3 - Adjustment for accrued salaries Laguna Realty Co....Ch. 3 - Determine wages paid The balances of the two...Ch. 3 - Effect of omitting adjustment Accrued salaries of...Ch. 3 - Effect of omitting adjustment Assume that the...Ch. 3 - Effects of errors on financial statements For a...Ch. 3 - Effects of errors on financial statements The...Ch. 3 - Effects of errors on financial statements If the...Ch. 3 - Adjustment for accrued fees At the end of the...Ch. 3 - Adjustments for unearned and accrued fees The...Ch. 3 - Effect on financial statements of omitting...Ch. 3 - Adjustment for depreciation The estimated amount...Ch. 3 - Adjustments Clean Air Company is a consulting firm...Ch. 3 - Book value of fixed assets For a recent year....Ch. 3 - Classify assets Identify each of the following as...Ch. 3 - Balance sheet classification At the balance sheet...Ch. 3 - Classified balance sheet Pounds-Away Services Co....Ch. 3 - Prob. 3.29ECh. 3 - Balance sheet List any errors you can find in the...Ch. 3 - Accrual basis accounting San Mateo Health Care...Ch. 3 - Prob. 3.2PCh. 3 - Financial statements Data for San Mateo Health...Ch. 3 - Statement of cash flows Data for San Mateo Health...Ch. 3 - Statement of cash flows Data for San Mateo Health...Ch. 3 - Adjustments and errors At the end of May, the...Ch. 3 - Adjustment process and financial statements...Ch. 3 - Adjustment process and financial statements...Ch. 3 - Adjustment process and financial statements...Ch. 3 - Adjustment process and financial statements...Ch. 3 - Prob. 3.1MBACh. 3 - Prob. 3.2MBACh. 3 - Prob. 3.3MBACh. 3 - Prob. 3.4MBACh. 3 - Prob. 3.5.1MBACh. 3 - Prob. 3.5.2MBACh. 3 - Prob. 3.5.3MBACh. 3 - Prob. 3.5.4MBACh. 3 - Quick ratio The Gap Inc. (GPS)operates specialty...Ch. 3 - Prob. 3.6.2MBACh. 3 - Quick ratio The Gap Inc. (GPs)operates specialty...Ch. 3 - Quick ratio American Eagle Outfitters Inc. (AEO)...Ch. 3 - Quick ratio American Eagle Outfitters Inc. (AEO)...Ch. 3 - Prob. 3.7.3MBACh. 3 - Prob. 3.8MBACh. 3 - Prob. 3.9.1MBACh. 3 - Prob. 3.9.2MBACh. 3 - Prob. 3.9.3MBACh. 3 - Prob. 3.1CCh. 3 - Adjustments for financial statements Several years...Ch. 3 - Prob. 3.3.1CCh. 3 - Prob. 3.3.2CCh. 3 - Prob. 3.4.1CCh. 3 - Prob. 3.4.2CCh. 3 - Accrual versus cash net income. Cigna Corp. (CI)...Ch. 3 - Prob. 3.5.1CCh. 3 - Prob. 3.5.2C
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- not use ai pleasearrow_forwardWhat is the purpose of adjusting entries? When are they made? What are the four different categories of adjusting entries? Please use a unique example of each.arrow_forward“I don’t understand,” complained Chris, who responded to your bulletin board posting in your responsibilities asa tutor. The complaint was in response to your statements that recording adjusting entries is a critical step in theaccounting processing cycle, and the two major classifications of adjusting entries are prepayments and accruals.Required:Respond to Chris.1. When do prepayments occur? Accruals?2. Describe the appropriate adjusting entry for prepaid expenses and for deferred revenues. What is the effecton net income, assets, liabilities, and shareholders’ equity of not recording a required adjusting entry forprepayments?3. Describe the required adjusting entry for accrued liabilities and for accrued receivables. What is the effect onnet income, assets, liabilities, and shareholders’ equity of not recording a required adjusting entry for accruals?arrow_forward
- Explain and define what is an adjusting entry? write four different adjusting entries with Examples?arrow_forwardComplete the worsheet one section at a time, beginning with the Adjustments columns. For the Adjustments columns use the appropriate letters a. through d. as posting references. For the Income Statement and Balance Sheet columns, remember to include the net income or loss after the totals and then total the columns again. (If a box is not used in the worksheet, leave the box empty; do not enter a zero. Abbreviations used: Acc. = Acccumulated; Adj. = Adjusted; Depr. = Depreciation; Stmt. = Statement.) Mullen Co. Worksheet For Year Ended December 31, 201X Trial Balance Adjustments Account Dr. Cr. Dr. Cr. Cash 7 Accounts Receivable 3 Merchandise Inventory 9 Store Supplies 7 Store Equipment 20 Acc. Depr., Store Equipment…arrow_forwardWrite a memo to Beth Danon, the owner of Beth Co. that explains the following: 1. What is the nature and purpose of adjusting entries? 2. Why are adjusting entries needed? 3. What are the types of adjusting entries that may be made?arrow_forward
- What is an adjusting entry? Write four different adjusting entries with examples.arrow_forwardWhich of the following statements is not correct? Multiple Choice All of the above statements are correct. After the financial statements have been prepared, the adjustments are made a permanent part of the accounting records. Adjustments are recorded in the general journal as adjusting journal entries and are posted to the general ledger. All adjustments are shown on the worksheet.arrow_forwardNeed asaparrow_forward
- The Steps in Preparing a Worksheet Put the steps in the correct order that the worksheet is prepared. 1. [ Choose ] [Choose] Enter adjustment data. Enter adjusted balances. Total the statements columns, computer net income/(loss), and complete the worksheet. Prepare a trial balance on the worksheet. Extended adjusted balances to appropriate statement columns. (Choose 3 [ Choose ) (Choose ] 2.arrow_forwardRaymond Autobody Shop has the following accounts: A (Click the icon to view the accounts.) Create a chart of accounts for Raymond Autobody Shop using the standard numbering system. Each account is separated by a factor of 10. For example, the first asset account will be 100 and the next asset account will 110. (Use the first available line under each section, Asset, Liabilities, etc., when selecting the accounts. If a box is not used, leave the box empty; do not select any labels.) Balance Sheet Accounts - X More info Assets Liabilities Equity Accounts Payable Service Revenue Cash Equipment Utilities Expense Common Stock Automotive Supplies Advertising Expense Income Statement Accounts Dividends Unearned Revenue (Part of Equity) Retained Earnings Revenues Expenses Print Donearrow_forwardComplete the following table by filling in the blanks. For each of the listed posting errors: 1. Enter in column (1) the amount of the difference that the error would create between the two trial balance columns (show a zero if the columns would balance). 2. Identify if there would be a difference between the two columns, and identify in column (2) the trial balance column that would be larger. 3. Identify the account(s) affected in column (3). 4. Identify the amount by which the account(s) is (are) under- or overstated in column (4). The answer for the first error is provided as an example. (1) Difference (2) column With the Larger Total Stated (3) Identify Account(s) Incorrectly Stated (4) Account(s) is Overstated or Understated Description Between Debit and Credit Columns A $2.400 debit to Rent expense was posted as a $1,590 debit. $ 810 Credit Rent expenses Understated a. A $42,000 debit to Machinery was posted as a debit b. to Accounts payable. A $4.950 credit to Services revenue…arrow_forward
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