Horngren's Accounting, The Financial Chapters, Student Value Edition Plus MyLab Accounting with Pearson eText - Access Card Package (12th Edition)
12th Edition
ISBN: 9780134642949
Author: Tracie L. Miller-Nobles, Brenda L. Mattison, Ella Mae Matsumura
Publisher: PEARSON
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Textbook Question
Chapter 3, Problem E3.27E
Identifying the impact of
Learning Objective 3, 5
Austin Acoustics recorded the following transactions during October:
- Received $2,500 cash from customer for three months of service beginning October 1 and ending December 31. The company recorded a $2,500 debit to Cash and a $2,500 credit to Unearned Revenue.
- Employees are paid $3,000 on Monday following the five-day workweek. October 31 is on Friday.
- The company pays S440 on October 1 for its six-month auto insurance policy. The company recorded a $440 debit to Prepaid Insurance and a $440 credit to Cash.
- The company purchased office furniture for $8,300 on January 2. The company recorded a $8,300 debit to Office Furniture and an $8,300 credit to Accounts Payable. Annual
depreciation for the furniture is $1,000. - The company began October with $50 of office supplies on hand. On October 10, the company purchased office supplies on account of $100. The company recorded a $100 debit to Office Supplies and a $100 credit to Accounts Payable. The company used S120 of office supplies during October
- The company received its electric bill on October 31 for $325 but did not pay it until November 10.
- The company paid Novembers rent of $2,500 on October 30. On October 30, the company recorded an $2,500 debit to Rent Expense and a $2,500 credit to Cash.
| Item |
Adjusting Entry Needed? |
Specific Category of Accounts on the |
Over /Understated |
Specific Category of Accounts on the Income Statement |
Over /Understated |
| (a) |
Yes |
Liability Equity |
Over Under |
Revenue |
Under |
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Chapter 3 Solutions
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