ACCT Assignments Chapter 3(1)

ACCT Assignments Chapter 3(1) - 176 CHAPTER 3 Measuring...

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176 CHAPTER 3 Measuring Business Income CHAPTER ASSIGNMENTS Short Exercises LO1 LO2 Accrual Accounting Concepts SE 1. Match the concepts of accrual accounting on or actions on the left: 1. Assumes expenses should be assigned to the accounting period in which they are used to produce revenues 2. Assumes a business will last indefinitely 3. Assumes revenues are earned at a point in time 4. Assumes net income that is measured for a short period of time, such as one quarter, is a useful measure the right with the assumptions a. Periodicity b. Going concern c. Matching rule d. Revenue recognition LO Adjustment for Prepaid Insurance 7 SE 2. The Prepaid Insurance account began the year with a balance of $920. Dur- ing the year, insurance in the amount of $2,080 was purchased. At the end of the year (December 31), the amount of insurance still unexpired was $1,400. Prepare the year-end entry in journal form to record the adjustment for insurance expense for the year. LO3 Adjustment for Supplies SE 3. The Supplies account began the year with a balance of $760. During the year, supplies in the amount of $1,960 were purchased. At the end of the year (December 31), the inventory of supplies on hand was $880. Prepare the year-end entry in journal form to record the adjustment for supplies expense for the year. LO3 Adjustment for Depreciation SE 4. The depreciation expense on office equipment for the month of March is $100. This is the third month that the office equipment, which cost $1,900, has been owned. Prepare the adjusting entry in journal form to record depreciation for March and show the balance sheet presentation for office equipment and related accounts after the March 31 adjustment. LO3 Adjustment for Accrued Wages SE 5. Wages are paid each Saturday for a six-day workweek. Wages are currently running $1,380 per week. Prepare the adjusting entry in journal form required on June 30, assuming July 1 falls on a Tuesday. LO3 Adjustment for Unearned Revenue SE 6. During the month of August, deposits in the amount of $2,200 were received for services to be performed. By the end of the month, services in the amount of $1,520 had been performed. Prepare the necessary adjustment in jour- nal form for Service Revenue at the end of the month.
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Stop & Review 175 L04 Prepare financial state- ments from an adjusted trial balance. L05 Describe the account- ing cycle, and explain the purposes of closing entries. L06 Use accrual-based infor- mation to analyze cash flows. An adjusted trial balance is prepared after adjusting entries have been posted to the accounts. Its purpose is to test whether the adjusting entries have been posted correctly before the financial statements are prepared. The balances in the rev- enue and expense accounts in the adjusted trial balance are used to prepare the income statement. The balances in the asset and liability accounts in the adjusted trial balance and the ending balance from the statement of retained earnings are used to prepare the balance sheet. The accounting cycle has six steps: (1) analyzing business transactions from
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This note was uploaded on 02/18/2012 for the course ACCOUNTING 2301 taught by Professor Dr.susaneason during the Spring '12 term at San Jacinto.

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ACCT Assignments Chapter 3(1) - 176 CHAPTER 3 Measuring...

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