Journal Entries
Terms
Adjusting Entries
Closing Entries
Bank Reconciliation
100
Record the journal entry:
SCL issued 10,000 common shares in exchange for $250,000 cash.
Dr Cash 250,000
Cr Common Shares 250,000
100
An element of the fundamental qualitative characteristic of relevance that states that accounting information is relevant to decision makers when it helps predict future outcomes.
Predictive Value
100
Record the adjusting entry: The deposits of $3,400 from customers were for future services and were recorded as unearned revenue. As at December 31, three-quarters of these services had been provided.
Dr Unearned Revenue 2,550
Cr Service Revenue 2,550
100
Record the closing entry for the revenues:
Sales Revenue $34,000
Unearned Revenue $2,000
COGS $17,000
Dr Sales Revenue 34,000
Cr Income Summary 34,000
100
Outstanding cheques
Do these affect the bank or book side?
Do we add or deduct?
Outstanding cheques are deducted on the bank side.
200
Record the journal entry: WIL paid $1,800 cash for a one-year insurance policy covering the new equipment for the period January 1 to December 31.
Dr Prepaid Insurance 1,800
Cr Cash 1,800
200
An enhancing qualitative characteristic that states that the information in financial statements must be timely to be useful.
Timeliness
200
Record the adjusting entry:
There is $2,000 in wages owed at year end.
Dr Wages Expense
Cr Wages Payable
200
Record the closing entry for the following expenses:
Cost of goods sold 130,000
Wages Expense 34,000
Repairs and Maint exp 25,000
Miscellaneous exp 15,000
Dr Income Summary 204,000
Cr Cost of goods sold 130,000
Cr Wages Expense 34,000
Cr Repairs and Maint exp 25,000
Cr Miscellaneous exp 15,000
200
NSF Cheques
Do these affect the bank or book side?
Do we add or deduct?
NSF cheques are deducted on the book side
300
Record the journal entry: Clearly Corp. sold products to customers for $34,000, of which $21,000 was received in cash and the balance was on account. SCL's customers will pay at a later date. The products that were sold had cost SCL $17,000.
Dr Cash 21,000
Dr A/R 13,000
Cr Sales 34,000
Dr COGS 17,000
Cr Inventory 17,000
300
A profitability measure (ratio) that compares a company's gross profit to its total revenues. It measures what portion of each sales dollar is left after covering COGS.
Gross Profit (Margin) Ratio
300
Record the adjusting entry:
A count of the supplies at year end revealed that $500 of the $5,000 supplies were still on hand.
Dr Supplies Expense $4,500
Cr Supplies $4,500
300
Record the entry to close the $3,400 dividends declared account.
Dr Retained Earnings 3,400
Cr Dividends Declared 3,400
300
The bookkeeper incorrectly recorded a cheque for supplies $150 when the correct amount was $510. Where should this error be corrected- bank/book side?
How much is the correction? Deduct or Add?
Book
Deduct $360
400
Record the journal entry: Dividends in the amount of $400 were declared by SCL's board of directors and paid.
Dr Dividends Declared 400
Cr Cash 400
400
A company cash flow pattern like this:
Operating Investing Financing
+ + +suggests what about the company's success?
Successful, but actively repositioning or relocating using financing from operations together with cash from creditors and shareholders
400
Record the adjusting entry for the year:
A building was purchased on January 1st for $120,000. The building is being depreciated over 20 years with a residual value of $20,000. The company's year end is December 31st.
Dr Depreciation Expense 5,000
Cr Accumulated Depreciation 5,000
400
Calculate the balance in the income summary account after closing revenues and expenses
$343,000
400
What is the AFDA amount on the company's balance sheet?
$42,000
500
Record the journal entry: Flip Corp. received $3,200 for services to be provided to customers in the upcoming 4 months.
Dr Cash 3,200
Cr Unearned Revenue 3,200
500
The set of policies and procedures established by an enterprise to safeguard its assets and ensure the integrity of its accounting system.
Internal control system
500
Record the adjusting entry:
Income tax payable of 30% on net income of $100,000 is owed.
Dr Income tax expense 30,000
Cr Income tax payable 30,000
500
Record the ending balance in retained earnings after all the closing entries have been recorded.
Begin RE 133,000 + Sales 981,000 - COGS 528,000 - Wages Expense 132,000 - Advertising Expense 29,000- Rent Expense 33,000- Divs 9,000
= $383,000
500
The company has a $5,000 debit balance in AFDA at December 31st, they determine based on the allowance aging analysis that the ending balance should be $45,000. What entry is required?
Dr Bad debt expense 50,000
Cr AFDA 50,000