Adjusting entries are made to ensure that:

Adjusting entries affect at least one balance sheet account and at least one income statement account. For the entries below, identify the account to be debited and the account to be credited from the following accounts: Cash; Accounts Receivable; Prepaid Insurance; Equipment; Accumulated Depreciation; Wages Payable; Unearned Revenue; Revenue; Wages Expense; Insurance Expense; and Depreciation Expense. Indicate which of the accounts is the income statement account and which is the balance sheet account. a. Entry to record revenue earned that was previously received as cash in advance. b. Entry to record wage expenses incurred but not yet paid (nor recorded). c. Entry to record revenue earned but not yet billed (nor recorded). d. Entry to record expiration of prepaid insurance. e. Entry to record annual depreciation expense.

1. Post-closing trial balance include all of the following account, except a. assetb. liabilitiesc. capitald. withdrawal   2. Which adjusting journal entries are subject to reversing entries? a. Accrual of incomeb. Deferral of income – liability methodc. Deferral of expense – asset methodd. Depreciation expense   3. On column 7 and 8 of worksheet or the Income Statement columns, what is the financial performance if debit is greater than credit? a. Breakevenb. Net Incomec. Net Lossd. Gross Income   4. On column 9 and 10 of worksheet or the Balance Sheet columns, what is the difference if debit is greater than credit? a. Breakevenb. Net Incomec. Net Lossd. Gross Income

Which statement is true about an adjusted trial balance? Multiple Choice Balance sheet items are presented before income statement items. It is prepared before adjusting entries. Accumulated depreciation should equal depreciation expense. Revenue accounts and expense accounts should not appear on the adjusted trial balance.

Accrual accounting requires adjusting entries. Provide an example of an adjusting entry.

Which of the following statements about an adjusted trial balance is correct? A. It is used to prepare financial statements. B. It is prepared to ensure assets equal liabilities. C. It is prepared at the beginning of the year. D. It is prepared before the adjusting journal entries have been made.

i Scenarios - a. Company A increases the allowance for doubtful accounts (ADA). Using the old estimate, ADA would have been $40,000. The new estimate is $45,000. X b. Company B omitted to record an invoice for a(n) $8,000 sale made on credit at the end of the previous year and incorrectly recorded the sale in the current year. The related inventory sold has been accounted for. c. Company C changes its revenue recognition to a more conservative policy. The result is a decrease in prior-year revenue by $3,000 and a decrease in current-year revenue by $4,000 relative to the amounts under the old policy.

GIVE A DETAILED ANSWER  Describe the effect on the financial statements when an adjustment is prepared that records (a) unrecorded revenue and (b) unrecorded expense. On the basis of what you have learned about adjustments, why do you think that adjusting entries are made on the last day of the accounting period rather than at several times during the accounting period?