6th Edition

ISBN: 9781260664386

Author: PHILLIPS, LIBB

Publisher: MCG

Concept explainers

The Effect Of Prepaid Taxes On Assets And Liabilities

Many businesses estimate tax liability and make payments throughout the year (often quarterly). When a company overestimates its tax liability, this results in the business paying a prepaid tax. Prepaid taxes will be reversed within one year but can resu…

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

A ledger is an account that provides information on all the transactions that have taken place during a particular period. It is also known as General Ledger. For example, your bank account statement is a general ledger that gives information about the a…

Trial Balance and Final Accounts

In accounting we start with recording transaction with journal entries then we make separate ledger account for each type of transaction. It is very necessary to check and verify that the transaction transferred to ledgers from the journal are accurately…

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 4, Problem 2ME

Understanding Concepts Related to Adjustments

Match each situation below to two applicable reasons that require an adjustment to be made.

________ 1.	IBM completed a consulting project for the CDC to simulate the spread of contagious viruses and will be paid next month.	A. Revenue has been earned.
		B. Expense has been incurred.
		C. Liability has been incurred.
________ 2.	This month Apple, Inc. redeemed iTunes gift cards that had been issued last month.	D. Liability has been fulfilled.
________ 3.	Schutt Sports used up some of the benefits of its football helmet manufacturing equipment.	E. Asset has been acquired.
		F. Asset has been used up.
________ 4.	Procter & Gamble received a bill for this month’s advertising services, which it will pay next month.

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Chapter 4, Problem 1ME

Chapter 4, Problem 3ME

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Chapter 4 Solutions

FUNDAMENTALS OF FINANCIAL ACCOUNTING

Ch. 4 - Prob. 1Q Ch. 4 - Explain the relationships between adjustments and...Ch. 4 - Prob. 3Q Ch. 4 - Prob. 4Q Ch. 4 - What is a contra-asset? Give an example of one.Ch. 4 - Explain the differences between depreciation...Ch. 4 - What is an adjusted trial balance? What is its...Ch. 4 - On December 31, a company makes a 59,000 payment...Ch. 4 - Using the information in question 8, determine the...Ch. 4 - Using the information in question 8, prepare the...

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Solution Summary: The author explains that adjustment entries are journal entries which are recorded at the end of the accounting period to correct or adjust the revenue and expense accounts.

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