Identify the purpose of adjusting entries .

Question

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Answer 1

Question

Chapter 4, Problem 1STQ

To determine

Identify the purpose of adjusting entries.

Expert Solution & Answer

Answer to Problem 1STQ

Option (c) is the correct answer.

Apply the realization principle and the matching principle to transactions affecting two or more accounting periods.

Explanation of Solution

Option (a) Adjust the retained earnings account for the revenue, expense, and dividends recorded during the accounting period is not the purpose of the adjusting entries. Thus option (a) is not the correct answer.

Option (b) Adjust daily the balances in asset, liability, revenue, and expense accounts for the effects of business transaction is not the purpose of adjusting entries. Thus, option (b) is not the correct answer.

Option (c) Apply the realization principle and the matching principle to transactions affecting two or more accounting period is the purpose of adjusting entries. Thus, option (c) is the correct answer.

Option (d) Prepare revenue and expense accounts for recording the transactions of the next accounting period is not the purpose of the adjusting entries. Thus, option (d) is not the correct answer.

Thus, as per the above explanation option (a), (b), and (d) are the wrong answers. Hence, Option (c) is the correct answer.

Conclusion

Thus, Option (c) is the correct answer.

Apply the realization principle and the matching principle to transactions affecting two or more accounting periods.

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General accounting question

Olivia, single and age 58, sold her home for $485,000 after living there for 10 years. Her selling expenses were $9,000 and her adjusted basis in the home was $200,000. What is the maximum gain that Olivia must report in connection with the sale of her principal residence? a) $26,000 b) $0 c) $285,000 d) $276,000

Lumen Products, which uses the high-low method, had total costs of $32,000 at its lowest level of activity when 6,000 units were sold. At its highest level of activity, total costs were $50,000 when 11,000 units were sold. Lumen would estimate fixed costs as _.

Answer 2

Question

Chapter 4, Problem 1STQ

To determine

Identify the purpose of adjusting entries.

Expert Solution & Answer

Answer to Problem 1STQ

Option (c) is the correct answer.

Apply the realization principle and the matching principle to transactions affecting two or more accounting periods.

Explanation of Solution

Option (a) Adjust the retained earnings account for the revenue, expense, and dividends recorded during the accounting period is not the purpose of the adjusting entries. Thus option (a) is not the correct answer.

Option (b) Adjust daily the balances in asset, liability, revenue, and expense accounts for the effects of business transaction is not the purpose of adjusting entries. Thus, option (b) is not the correct answer.

Option (c) Apply the realization principle and the matching principle to transactions affecting two or more accounting period is the purpose of adjusting entries. Thus, option (c) is the correct answer.

Option (d) Prepare revenue and expense accounts for recording the transactions of the next accounting period is not the purpose of the adjusting entries. Thus, option (d) is not the correct answer.

Thus, as per the above explanation option (a), (b), and (d) are the wrong answers. Hence, Option (c) is the correct answer.

Conclusion

Thus, Option (c) is the correct answer.

Apply the realization principle and the matching principle to transactions affecting two or more accounting periods.

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Subscribe now to access step-by-step solutions to millions of textbook problems written by subject matter experts!

Answer 3

Question

Chapter 4, Problem 1STQ

To determine

Identify the purpose of adjusting entries.

Expert Solution & Answer

Answer to Problem 1STQ

Option (c) is the correct answer.

Apply the realization principle and the matching principle to transactions affecting two or more accounting periods.

Explanation of Solution

Option (a) Adjust the retained earnings account for the revenue, expense, and dividends recorded during the accounting period is not the purpose of the adjusting entries. Thus option (a) is not the correct answer.

Option (b) Adjust daily the balances in asset, liability, revenue, and expense accounts for the effects of business transaction is not the purpose of adjusting entries. Thus, option (b) is not the correct answer.

Option (c) Apply the realization principle and the matching principle to transactions affecting two or more accounting period is the purpose of adjusting entries. Thus, option (c) is the correct answer.

Option (d) Prepare revenue and expense accounts for recording the transactions of the next accounting period is not the purpose of the adjusting entries. Thus, option (d) is not the correct answer.

Thus, as per the above explanation option (a), (b), and (d) are the wrong answers. Hence, Option (c) is the correct answer.

Conclusion

Thus, Option (c) is the correct answer.

Apply the realization principle and the matching principle to transactions affecting two or more accounting periods.

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Subscribe now to access step-by-step solutions to millions of textbook problems written by subject matter experts!

Answer 4

Question

Chapter 4, Problem 1STQ

To determine

Identify the purpose of adjusting entries.

Expert Solution & Answer

Answer to Problem 1STQ

Option (c) is the correct answer.

Apply the realization principle and the matching principle to transactions affecting two or more accounting periods.

Explanation of Solution

Option (a) Adjust the retained earnings account for the revenue, expense, and dividends recorded during the accounting period is not the purpose of the adjusting entries. Thus option (a) is not the correct answer.

Option (b) Adjust daily the balances in asset, liability, revenue, and expense accounts for the effects of business transaction is not the purpose of adjusting entries. Thus, option (b) is not the correct answer.

Option (c) Apply the realization principle and the matching principle to transactions affecting two or more accounting period is the purpose of adjusting entries. Thus, option (c) is the correct answer.

Option (d) Prepare revenue and expense accounts for recording the transactions of the next accounting period is not the purpose of the adjusting entries. Thus, option (d) is not the correct answer.

Thus, as per the above explanation option (a), (b), and (d) are the wrong answers. Hence, Option (c) is the correct answer.

Conclusion

Thus, Option (c) is the correct answer.

Apply the realization principle and the matching principle to transactions affecting two or more accounting periods.

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Subscribe now to access step-by-step solutions to millions of textbook problems written by subject matter experts!

Answer 5

Chapter 4, Problem 1STQ

To determine

Identify the purpose of adjusting entries.

Expert Solution & Answer

Answer to Problem 1STQ

Option (c) is the correct answer.

Apply the realization principle and the matching principle to transactions affecting two or more accounting periods.

Explanation of Solution

Option (a) Adjust the retained earnings account for the revenue, expense, and dividends recorded during the accounting period is not the purpose of the adjusting entries. Thus option (a) is not the correct answer.

Option (b) Adjust daily the balances in asset, liability, revenue, and expense accounts for the effects of business transaction is not the purpose of adjusting entries. Thus, option (b) is not the correct answer.

Option (c) Apply the realization principle and the matching principle to transactions affecting two or more accounting period is the purpose of adjusting entries. Thus, option (c) is the correct answer.

Option (d) Prepare revenue and expense accounts for recording the transactions of the next accounting period is not the purpose of the adjusting entries. Thus, option (d) is not the correct answer.

Thus, as per the above explanation option (a), (b), and (d) are the wrong answers. Hence, Option (c) is the correct answer.

Conclusion

Thus, Option (c) is the correct answer.

Apply the realization principle and the matching principle to transactions affecting two or more accounting periods.

Answer 6

Chapter 4, Problem 1STQ

To determine

Identify the purpose of adjusting entries.

Expert Solution & Answer

Answer to Problem 1STQ

Option (c) is the correct answer.

Apply the realization principle and the matching principle to transactions affecting two or more accounting periods.

Explanation of Solution

Option (a) Adjust the retained earnings account for the revenue, expense, and dividends recorded during the accounting period is not the purpose of the adjusting entries. Thus option (a) is not the correct answer.

Option (b) Adjust daily the balances in asset, liability, revenue, and expense accounts for the effects of business transaction is not the purpose of adjusting entries. Thus, option (b) is not the correct answer.

Option (c) Apply the realization principle and the matching principle to transactions affecting two or more accounting period is the purpose of adjusting entries. Thus, option (c) is the correct answer.

Option (d) Prepare revenue and expense accounts for recording the transactions of the next accounting period is not the purpose of the adjusting entries. Thus, option (d) is not the correct answer.

Thus, as per the above explanation option (a), (b), and (d) are the wrong answers. Hence, Option (c) is the correct answer.

Conclusion

Thus, Option (c) is the correct answer.

Apply the realization principle and the matching principle to transactions affecting two or more accounting periods.

Answer 7

Chapter 4, Problem 1STQ

To determine

Identify the purpose of adjusting entries.

Answer 8

Expert Solution & Answer

Answer to Problem 1STQ

Option (c) is the correct answer.

Apply the realization principle and the matching principle to transactions affecting two or more accounting periods.

Answer 9

Expert Solution & Answer

Answer 10

Expert Solution & Answer

Answer 11

Explanation of Solution

Option (a) Adjust the retained earnings account for the revenue, expense, and dividends recorded during the accounting period is not the purpose of the adjusting entries. Thus option (a) is not the correct answer.

Option (b) Adjust daily the balances in asset, liability, revenue, and expense accounts for the effects of business transaction is not the purpose of adjusting entries. Thus, option (b) is not the correct answer.

Option (c) Apply the realization principle and the matching principle to transactions affecting two or more accounting period is the purpose of adjusting entries. Thus, option (c) is the correct answer.

Option (d) Prepare revenue and expense accounts for recording the transactions of the next accounting period is not the purpose of the adjusting entries. Thus, option (d) is not the correct answer.

Thus, as per the above explanation option (a), (b), and (d) are the wrong answers. Hence, Option (c) is the correct answer.