Basic Types
Dr Interest Receivable
Cr Interest Earned is an example of...
a. Converting Assets to Expense
b. Converting Liabilities to Revenue
c. Accruing Unpaid Expenses
d. Accruing Uncollected Revenue
What is ...
d. Accruing Uncollected Revenue?
This describes an account with a credit balance that is offset against or deducted from an asset account to produce the proper balance sheet amount for the asset.
(not a specific account name)
What is contra-asset account?
On Jan. 1 The business purchased a 6 month insurance policy for $12,000. What is the balance in the prepaid insurance account, after monthly adjustments, on April 30th?
What is $4,000?
12,000/6 = 2,000
4 * 2,000 = 8,000.
12,000 - 8,000 = 4,000
The Father of Accounting.
Who is Luca Pacioli?
At the end of the month you forgot to journalize the adjusting entry for prepaid insurance. Is Net Income Overstated or Understated?
What is Net Income is overstated?
Revenue - Expense = Net Income
n/a under = over
The debit to Insurance expense not recorded.
On Dec 1, the company signed a new rental agreement and paid three months’ rent in advance at a rate of $3,600 per month. On Dec 31, what adjusting is needed to bring the accounts up to date?
What is ...
DR Rent Expense $1,200
CR Prepaid Rent $1,200
Dr Unearned Revenue
Cr Fees Earned is an example of...
a. Converting Assets to Expense
b. Converting Liabilities to Revenue
c. Accruing Unpaid Expenses
d. Accruing Uncollected Revenue
What is ...
b. Converting Liabilities to Revenue?
The principle indicates that revenue should be recognized in the period in which it is earned.
What is the realization principle?
On Jan. 1 The business purchased a 6 month insurance policy for $12,000. What is the adjusting entry at the EOM?
DR Insurance Expense $2,000
CR Prepaid Insurance $2,000
The "Big 4" Accounting Firms.
What is Deloitte, E & Y, PWC and KPMG?
At the end of the month you forgot to journalize the adjusting entry for your fixed asset. Is Owner's Equity Overstated or Understated?
What is owner's equity is overstated?
The balance in the prepaid insurance account in the unadjusted trial balance is $1200. The unexpired amount of insurance after one month is $1,000. What adjusting entry is needed to bring the account up to date on December 31.
DR Insurance Expense 200
CR Prepaid Insurance 200
Dr Accounts Receivable
Cr Fees Earned is an example of...
a. Converting Assets to Expense
b. Converting Liabilities to Revenue
c. Accruing Unpaid Expenses
d. Accruing Uncollected Revenue
What is ...
d. Accruing Uncollected Revenue?
The widely used approach of recognizing an equal amount of depreciation expense in each period of a depreciable asset’s useful life.
What is straight-line method of depreciation?
ABC Co. unadjusted trial balance reports Unearned Fees of $10,000 and Fees Earned of $45,000. A review of the records indicate that $5,000 of previously unearned fees have now been earned. The adjusting entry is
What is
DR Unearned Fees $5,000
CR Fees Earned $5,000 ?
These 2 musicians were all pursuing an accounting degree before their music careers took off. Another Famous Musician has a degree in accounting from the University on Washington.
Name ONE.
Who are Mick Jagger and Robert Plant?
Who is Kenny G?
At the end of the month you forgot to journalize the adjusting entry for unbilled customers. What is the adjusting entry and is Net Income Overstated or Understated?
DR Accounts Receivable and CR Fees Earned
Net Income is understated.
The cost of the Thingamajig Machine is 122,000, it's salvage value is 12,000, its useful life is 11 years. What is the adjusting entry for one month?
Round to the nearest dollar.
What is...
DR Depreciation Expense 833
CR Accum Depreciation - Thingamajig 833
122,000-12,000/11 = 10,000
10,000/12 = 833.33
Dr Rent Expense
Cr Prepaid Rent is an example of...
a. Converting Assets to Expense
b. Converting Liabilities to Revenue
c. Accruing Unpaid Expenses
d. Accruing Uncollected Revenue
What is ...
a. Converting Assets to Expense?
The net amount at which an asset appears in financial statements. For depreciable assets, this represents cost minus accumulated depreciation.
What is book value?
On Jan 1 Cyber Corp. had office supplies on hand for $3,000. During the month they purchased additional supplies costing $1,000. At the end of the month supplies on hand were $2,500. Prepare the EOM adjusting entry.
DR Supplies Expense $1,500
CR Supplies $1,500
This pink product was invented by an accountant.
What is BUBBLE GUM?
At the end of the month you forgot to journalize the adjusting entry for unearned rent that is now earned. What is the adjusting entry and is Net Income Overstated or Understated?
DR Unearned Rent and CR Rent Revenue
Net Income is understated.
The supplies on hand according to the unadjusted trial balance as of December 31st is 1,200.
The value of supplies used during the month are estimated at $500. The adjusting entry for December 31st is
DR Supplies 500
CR Supplies Expense 500
1200 - 500 = 700 (supplies left)
Dr Salary Expense
Cr Salary Payable is an example of...
a. Converting Assets to Expense
b. Converting Liabilities to Revenue
c. Accruing Unpaid Expenses
d. Accruing Uncollected Revenue
What is ...
c. Accruing Unpaid Expenses?
An obligation to deliver goods or render services in the future, stemming from the receipt of advance payment.
What is unearned revenue?
Write out the monthly depreciation adjusting entry given the following information. Cost of Equipment 120,000. Residual Value $25,000. Useful life 10 years. Accumulated Depreciation balance 9,504.
Round to nearest dollar.
DR Depreciation Expense
CR Accumulated Depreciation - Equipment
$792.00
120,000 - 25,000 / 10 years = 9,500
9,500/12 = 791.67
Luca Pacioli's is famously quoted as saying...
What is "a person should not go to sleep at night until the debits equal the credit."
The adjusting entry for wages accrued for the last two days of the month was not done! What is the adjusting entry and what is the effect on Assets?
What is Dr Wages expense Cr Wages payable
AND NO EFFECT om Assets?
Salaries payable and Salaries expenses are acceptable instead of wages
On December 1st ABC Company took out a Note for $12,000 for 60 days at 5% interest. The adjusting entry for December 31 is
What is ...
DR Interest Expense 50
CR Interest Payable 50
Principal * days / 360 * interest rate
12,000 * 30/360 * .05 = 50