They Call Me a Liability
Entries made at the end of an accounting period to update account balances.
What are adjusting entries?
This accounting method records revenue when earned and expenses when incurred.
What is accrual accounting?
The left side of an account.
What is a debit?
The financial statement that reports revenues and expenses over a period.
What is the income statement?
Apples __________ year began on September 27, 2026 and will end on September 26, 2027?
What is fiscal
An expense paid in advance that is gradually used up over time.
What is a prepaid expense?
The principle that requires expenses to be recognized in the period they help generate revenue.
What is the matching principle?
The account credited when recording depreciation on equipment using accumulated depreciation.
What is Accumulated Depreciation?
The financial statement that is a snapshot of the company right now.
What is a balance sheet?
This type of adjustment records an expense incurred but not yet paid or recorded.
What is an accrued expense?
Revenue earned but not yet received in cash or recorded.
What is accrued revenue?
A business completes a $900 service in December but collects payment in January. In which month is revenue recognized?
What is December?
The adjusting entry for $600 of supplies used during the period.
What is debit Supplies Expense $600 and credit Supplies $600?
What is the adjusted trial balance?
A company has $4,000 of prepaid rent. By year-end, $1,500 has expired. What is the remaining prepaid rent balance?
What is $2,500?
A company pays $1,200 for 12 months of insurance. After one month, what is adjusting entry?
What is debit $100 of insurance expense and credit prepaid insurance $100.
A company receives $3,000 cash in advance for services it will perform next month. Before performing the services, this is the debit and this is the credit.
What is debit cash and credit unearned revenue?
The adjusting entry for $800 of revenue earned from services previously recorded as unearned revenue.
What is debit Unearned Revenue $800 and credit Service Revenue $800?
If expenses are understated by $1,000 and everything else is correct, net income is reported this much too high.
What is $1,000?
A piece of machinery has depreciated by $2,000 over the last year, this is the adjusting entry.
What is debit: Depreciated Expense: $2,000 and credit Accumulated Depreciation: $2,000?
A company owes employees $2,400 in wages at the end of the period but will pay them next month. Identify the adjusting entry.
What is debit Wages Expense $2,400 and credit Wages Payable $2,400?
A company earned $5,000 in revenue and incurred $3,200 in expenses during December. It collected only $2,000 of the revenue and paid only $1,000 of the expenses. Calculate net income.
What is $1,800?
Equipment costs $12,000, has a $2,000 estimated salvage value, and a five-year useful life. Using straight-line depreciation, calculate annual depreciation.
What is $2,000 per year?
A company begins the year with retained earnings of $25,000, earns net income of $12,000, and pays $4,000 in dividends. What is the company's ending retained earnings balance?
What is $33,000?
$25,000 + $12,000 - $4,000 = $33,000
Before adjustments, a company reports $4,500 in Supplies. A physical count at the end of the period shows that only $1,200 of supplies remain. What adjusting entry is required, and by how much will net income decrease?
What is a debit to Supplies Expense for $3,300 and a credit to Supplies for $3,300, decreasing net income by $3,300?