FINANCIAL ACCOUNTING
10th Edition
ISBN: 9781259964947
Author: Libby
Publisher: MCG
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Every time a company prepares financial statements,
Each adjusting entry affects a
- Based on your review of Chapter 3, describe an adjusting
journal entry that is needed at the end of an accounting period. - Why are adjusting entries important and how do they contribute to accurate financial reporting?
- Accrual accounting is required under U.S. GAAP. One of the main principles of accrual accounting is the Matching Principle, also known as the Revenue Recognition Principle and the Expense Recognition Principle. Consult a reliable resource online and in your own words, explain the difference between accrual basis accounting and cash basis accounting. How does this relate to the Matching Principle?'
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- The following information relates to the Muscat Company at the end of 2019. The .accounting period is the calendar year On July 1, 2019, cash of OMR 48,000 was received from customers for a 36-month service period beginning on that date. The receipt was recorded by a debit to Cash and a credit to Unearned Service Revenue. OMR 8,000 was earned on December 31; the company should make the following :adjusting entry اخترأحد الخيارات a. None of the answers are correct b. DEBIT Cash OMR 8,000 and CREDIT Service Revenue OMR 8,000 c. DEBIT Cash OMR 8,000 and CREDIT Unearned Service Revenue OMR 8,000 d. DEBIT Cash OMR 48,000 and CREDIT Service Revenue OMR 48,000 e. DEBIT Unearned Service Revenue OMR 8,000 and CREDIT Service Revenue OMR 8,000arrow_forwardThe Yellow Company made year-end adjusting entries affecting each of the following accounts: Office Salaries Payable (credited); Depreciation Expense (debited); Unearned Rental Revenue (debited); and Prepaid Insurance (credited). Which account is likely to appear in Yellow's reversing entries? a. Office salaries payable b. Depreciation expense c. Unearned rental revenue d. Prepaid insurancearrow_forwardAt the end of the year, Dahir Incorporated’s balance of Allowance for Uncollectible Accounts is $1,500 (credit) before adjustment. The company estimates future uncollectible accounts to be $7,500. What adjusting entry would Dahir record for Allowance for Uncollectible Accounts? (If no entry is required for a particular transaction/event, select "No Journal Entry Required" in the first account field.)arrow_forward
- Carla Vista Corporation has the following selected transactions during the year ended December 31, 2024: Jan. 1 Purchased a copyright for $117.480 cash. The copyright has a useful life of six years and a remaining legal life of 30 years. Mar. 1 Sept. 1 Dec. 31 Acquired a franchise with a contract period of nine years for $500,850; the expiration date is March 1, 2033, Paid cash of $38,820 and borrowed the remainder from the bank. Purchased a trademark with an indefinite life for $73,190 cash. As the purchase was being finalized, spent $33.150 cash in legal fees to successfully defend the trademark in court. Purchased an advertising agency for $640,000 cash. The agency's only assets reported on its statement of financial position immediately before the purchase were accounts receivable of $58,000, furniture of $170,000, and leasehold improvements of $320,000. Carla Vista hired an independent appraiser who estimated that the fair value of these assets was accounts receivable $58,000,…arrow_forwardPrepare the adjusting entries for the following situations:A. The supplies account balance on December 31, 2021 is $1,475. Actual supplies on hadat the end of the year was 350. Prepare the adjusting entry.B. Depreciation for the year is $7,200. Please prepare the adjusting entry.C. Fees earned but not yet billed totaled $23,750.D. Wages accrued but not paid at year end was $15,680.E. Unearned revenue had a balance of $6,900, at the end of the year you have earned$4,300. Please make the adjusting entry. 2. After the accounts have been adjusted at January 31, the end of the year, the followingbalances are taken from the ledger of Harrison's Dog Walking Service Company: Harrison Taylor, Capital $349,000Harrison Taylor, Drawing 6,000Fees Earned 124,600Wages Expense 29,000Rent Expense 43,000Supplies Expense 7,300Miscellaneous Expense 5,700arrow_forwardReversing entries are used in income collected in advance when the | point adjusting entry has a Debit to an asset Debit to a Liabilty credit to Expense Credit to Incomearrow_forward
- At year-end, the president instructs you, the financial officer, not to record accrued expenses until next year because they will not be paid until then. The president also directs you to record in current-year sales a recent purchase order from a customer that requires merchandise to be delivered two weeks after the year-end. Your company would report a net income instead of a net loss if you follow these instructions. What do you do?arrow_forwardWhich of the following is true regarding adjusting entries? O a. Adjusting entries are dated as of the first day of the new accounting period. O b. Adjusting entries are not posted to the ledger. O c. Adjusting entries are usually recorded after the end of the period but are dated as of the last day of the period. O d. Adjusting entries are optional with accrual-basis accounting.arrow_forwardAssume a company receives a bill for $10,000 for advertising done during the current year. If this bill is not yetrecorded at the end of the year, what will the adjustingjournal entry include?a. Debit to Advertising Expense of $10,000.b. Credit to Advertising Expense of $10,000.c. Debit to Accrued Liabilities of $10,000.d. Need more information to determinearrow_forward
- Pp.53. Subject :- Accountarrow_forwardGIVE 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?arrow_forwardAt the end of the year, a company has the following accounts receivable and estimates of uncollectible accounts: Accounts not yet due = $72,000; estimated uncollectible = 7%. Accounts 1 to 30 days past due = $32,000; estimated uncollectible = 20%. Accounts more than 30 days past due = $8,000; estimated uncollectible = 50%. Required: Record the year-end adjusting entry for uncollectible accounts, assuming the current balance of the Allowance for Uncollectible Accounts is $1,400 (debit). (If no entry is required for a particular transaction/event, select "No Journal Entry Required" in the first account field.)arrow_forward
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