26th Edition

ISBN: 9781285743615

Author: Carl Warren, James M. Reeve, Jonathan Duchac

Publisher: Cengage Learning

Concept explainers

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Final Accounts

Financial accounting is one of the branches of accounting in which the transactions arising in the business over a particular period are recorded.

Ledger Posting

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Trial Balance and Final Accounts

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Adjustment Entries

At the end of every accounting period Adjustment Entries are made in order to adjust the accounts precisely replicate the expenses and revenue of the current period. It is also known as end of period adjustment. It can also be referred as financial repor…

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Textbook Question

Chapter 3, Problem 3.6APR

Adjusting entries and errors

At the end of April, the first month of operations, the following selected data were taken from the financial statements of Shelby Crawford, an attorney:

Net income for April	$120,000
Total assets at April 30	750,000
Total liabilities at April 30	300,000
Total owner's equity at April 30	450,000

In preparing the financial statements, adjustments for the following data were overlooked:

Supplies used during April, $2,750.
Unbilled fees earned at April 30, $23,700.
Depreciation of equipment for April, $1,800.
Accrued wages at April 30, $1,400.

Instructions

1. Journalize the entries to record the omitted adjustments.
2. Determine the correct amount of net income for April and the total assets, liabilities, and owner's equity at April 30. In addition to indicating the corrected amounts, indicate the effect of each omitted adjustment by setting up and completing a columnar table similar to the following. The adjustment for supplies used is presented as an example.

Chapter 3, Problem 3.6APR, Adjusting entries and errors At the end of April, the first month of operations, the following

Definition Definition Financial statement that provides a snapshot of an organization's financial position at a specific point in time. It summarizes a company's assets, liabilities, and shareholder's equity, detailing what the company owns, what it owes, and what is left over for its owners. The balance sheet serves as a crucial tool to assess the financial health and stability of a company, as well as to help management make informed decisions about its future investments and financial obligations.

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Chapter 3 Solutions

Accounting (Text Only)

Ch. 3 - How are revenues and expenses reported on the...Ch. 3 - Is the matching concept related to (a) the cash...Ch. 3 - Why are adjusting entries needed at the end of an...Ch. 3 - What is the difference between adjusting entries...Ch. 3 - Identify the four different categories of...Ch. 3 - If the effect of the debit portion of an adjusting...Ch. 3 - If the effect of the credit portion of an...Ch. 3 - Does every adjusting entry affect net income for...Ch. 3 - Prob. 9DQ Ch. 3 - (a) Explain the purpose of the two accounts:...

Ch. 3 - Accounts requiring adjustment Indicate with a Yes...Ch. 3 - Accounts requiring adjustment Indicate with a Yes...Ch. 3 - Type of adjustment Classify the following items as...Ch. 3 - Prob. 3.2BPE Ch. 3 - Prob. 3.3APE Ch. 3 - Adjustment for prepaid expense The prepaid...Ch. 3 - Prob. 3.4APE Ch. 3 - Prob. 3.4BPE Ch. 3 - Adjustment for accrued revenues At the end of the...Ch. 3 - Adjustment for unearned revenue The balance in the...Ch. 3 - Adjustment for prepaid expense The prepaid...Ch. 3 - Adjustment for prepaid expense The supplies...Ch. 3 - Adjustment for depreciation The estimated amount...Ch. 3 - Adjustment for depreciation The estimated amount...Ch. 3 - Prob. 3.8APE Ch. 3 - Prob. 3.8BPE Ch. 3 - Effect of errors on adjusted trial balance For...Ch. 3 - Effect of errors on adjusted trial balance For...Ch. 3 - Prob. 3.10APE Ch. 3 - Prob. 3.10BPE Ch. 3 - Prob. 3.1EX Ch. 3 - Prob. 3.2EX Ch. 3 - Prob. 3.3EX Ch. 3 - Prob. 3.4EX Ch. 3 - Prob. 3.5EX Ch. 3 - Prob. 3.6EX Ch. 3 - Adjusting entries for prepaid insurance The...Ch. 3 - Prob. 3.8EX Ch. 3 - Prob. 3.9EX Ch. 3 - Prob. 3.10EX Ch. 3 - Adjusting entries for unearned and accrued fees...Ch. 3 - Prob. 3.12EX Ch. 3 - Prob. 3.13EX Ch. 3 - Prob. 3.14EX Ch. 3 - Prob. 3.15EX Ch. 3 - Prob. 3.16EX Ch. 3 - Prob. 3.17EX Ch. 3 - Prob. 3.18EX Ch. 3 - Determining fixed assets book value The balance in...Ch. 3 - Prob. 3.20EX Ch. 3 - Prob. 3.21EX Ch. 3 - Prob. 3.22EX Ch. 3 - Effects of errors on financial statements The...Ch. 3 - Effects of errors on financial statements If the...Ch. 3 - Adjusting entries for depreciation; effect of...Ch. 3 - Prob. 3.26EX Ch. 3 - Adjusting entries from trial balances The...Ch. 3 - Prob. 3.28EX Ch. 3 - Prob. 3.29EX Ch. 3 - Prob. 3.1APR Ch. 3 - Prob. 3.2APR Ch. 3 - Prob. 3.3APR Ch. 3 - Adjusting entries Good Note Company specializes in...Ch. 3 - Prob. 3.5APR Ch. 3 - Adjusting entries and errors At the end of April,...Ch. 3 - Prob. 3.1BPR Ch. 3 - Prob. 3.2BPR Ch. 3 - Prob. 3.3BPR Ch. 3 - Prob. 3.4BPR Ch. 3 - Prob. 3.5BPR Ch. 3 - Prob. 3.6BPR Ch. 3 - The unadjusted trial balance that you prepared for...Ch. 3 - Ethics and professional conduct in business Daryl...Ch. 3 - Accrued revenue The following is an excerpt from a...Ch. 3 - Prob. 3.3CP

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Solution Summary: The author explains the rules for debiting and crediting different accounts while they occur in business transactions.

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Chapter 3 Solutions