4 deborah consultants had the following balances before passing adjusting entries in 4307100

4 deborah consultants had the following balances before passing adjusting entries in 4307100

4) Deborah Consultants had the following balances before passing adjusting entries in the books on December 31, 2015.

Cash$6,000Deborah, Withdrawals$3,000

Accounts Receivable2,000Service Revenue10,600

Office Supplies1,800Salaries Expense4,000

Equipment15,000Rent Expense800

Accumulated Depreciation— Depreciation Expense—

Equipment9,000Equipment1,500

Deborah, Capital15,000Supplies Expense500

Prepare the adjusted trial balance after considering these adjustments:

a. Office Supplies used, $800. Assume the office supplies were initially recorded as an asset.

b. Accrued salaries on December 31, $600.

c. Revenue accrued but not recorded, $200.

Learning Objective 3-5

1) If a company fails to make an adjusting entry for accrued revenues, the net income will be overstated.

2) If a company fails to make an adjusting entry for prepaid expense, the assets will be overstated. Assume the prepaid expense is initially recorded as an asset.

3) The accountant for Jones Auto Repair Company failed to make an adjusting entry to record $5,000 of unpaid salaries for the last 2 weeks of the year. Which of the following is an impact of this omission?

A) The net income will be overstated.

B) The total assets will be understated.

C) The total liabilities will be overstated.

D) The total assets will be overstated.

4) Financial statements are prepared from the balances in a(n):

A) general journal.

B) chart of accounts.

C) unadjusted trial balance.

D) adjusted trial balance.

5) All of a company's accounts and their balances appear on the:

A) statement of retained earnings.

B) balance sheet.

C) adjusted trial balance.

D) income statement.

6) The accountant of Isabella Consulting Company failed to make an adjusting entry to record $6,000 for unearned service revenues that were earned before the end of the fiscal year. Assume the company initially recorded a liability. Which of the following statements is true?

A) The total liabilities will be overstated.

B) The total liabilities will be understated.

C) The total assets will be overstated.

D) The total assets will be understated.

7) The accountant for Sparks Electric Company failed to make an adjusting entry to record $3,000 of telephone expenses for the last two months of the year. Which of the following statements is true?

A) The total liabilities will be overstated.

B) The total liabilities will be understated.

C) The total assets will be overstated.

D) The total assets will be understated.

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