Chapter review_3_-Online-Answer key

Chapter review_3_-Online-Answer key - Depreciation...

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Chapter review (3) ____ 1. What is the matching concept The accounting concept that supports reporting revenues and related expenses in the same period 2. Using accrual accounting, when are expenses recorded and reported Expenses are recorded and reported as and when they are incurred (not necessarily paid) ____ 3. What is Deferred revenue Deferred revenue is revenue not earned but cash has been received (Unearned Revenue) ____ 4. The balance in the prepaid rent account before adjustment at the end of the year is $21,000, which represents three months' rent paid on December 1. The adjusting entry required on December 31 is Rent expense-$7,000(debit) Prepaid rent $7,000(credit) ____ 5. A business pays weekly salaries of $25,000 on Friday for a five-day week ending on that day. The adjusting entry necessary at the end of the fiscal period ending on Thursday is Wages Expenses $20,000(debit) Wages Payable $20,000(credit) ____ 6. The adjusting entry to record the depreciation of equipment for the fiscal period is
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Unformatted text preview: Depreciation expenses (debit) Accumulate Depreciation (credit) ____ 7. The net income reported on the income statement is $100,000. However, adjusting entries have not been made at the end of the period for supplies expense of $2,700 and accrued salaries of $1,300. Net income, as corrected, is 100,000-2,700-1,300=96,000 8. The type of account and normal balance of Accumulated Depreciation is Contra Asset a/c, Credit Balance ____ ____ 9. Where does Unearned Fees appear (Income statement or Balance Sheet- what section of Income statement or Balance Sheet) Appears as a Liability in the Balance Sheet ____ 10. The unearned rent account has a balance of $50,000. If $10,000 of the $50,000 is unearned at the end of the accounting period, the amount of the adjusting entry is $40,000 has become Earned Rent (or Rent Income) Unearned Rent- $40,000 Rent Revenue -$40,000...
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