ACCTG 1 Lecture Notes - Lecture 20: Trial Balance, General Ledger, Financial Statement

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20 Nov 2020

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Document Summary

Expenses incurred but not yet paid or recorded. Result from the same factors as accrued revenues. Since accrued expenses have not yet been previously recorded, an adjusting entry is required for. 2 purposes: to record obligations that exist at the end of the period, to recognize the expenses that apply to the current accounting period. *until adjustments are made both liabilities and expenses are understated. An adjusting entry for accrued expenses results in an increase (debit) to an expense account and an increase (credit) to a liability account. Interest rates are always expressed in annual terms. Amount of interest accumulation is determined by 3 factors: principal amount or face value of the loan, interest rate, which is always expressed as an annual rate, the length of time that the loan is outstanding. Some types of expenses such as employees" salaries, are paid for after the services have been performed ad require an accrual adjustment when financial statements are prepared.

Related Questions

1. Cougar Corp rents out office space in a commercial building and pays rent in advance at the beginning of each year. When Cougar Corp makes the end-of-period adjusting entry to the "prepaid rent" account:

The prepaid rent account is credited

The prepaid rent account is debited

An expense account is credited

Cougar Corp is following the revenue recognition principle

If a company fails to record an adjusting entry for accrued revenue in a given year, then:

Stockholders' equity is overstated and liabilities are understated

Stockholders equity and assets are both overstated

Stockholders' equity is understated and liabilities are overstated.

Stockholders' equity and assets are both understated

None of the above

If a company fails to record an adjusting entry for accrued interest expense in a given year, then:

		Stockholders' equity is overstated and liabilities are understated.
		Stockholders' equity and assets are both overstated.
		Stockholders' equity is understated and liabilities are overstated.
		Stockholders' equity and assets are both understated.
		None of the above

aquamarinetrout62

The period end adjusting entry for bad debt expense under the allowance method is

	Cash, debit; Accounts Receivable/customer name, credit.
	not required.
	Bad Debt Expense, debit; Accounts Receivable/customer name, credit.
	Bad Debt Expense, debit; Allowance for Uncollectible Accounts, credit.

Bach Instruments had total assets of $560,000; total liabilities of $250,000; and total Stockholders' Equity of $310,000. Bach's debt ratio is

44.6%.

28.7%.

80.6%.

55.4%.

The entry to record selling 300 shares of stated value $60 common stock for $70 per share would be

	debit Cash $21,000; credit Common Stock $18,000; credit Paid-in Capital in Excess of Stated Valueâ$3,000.
	debit Cash $21,000; credit Common Stock $21,000.
	debit Cash $18,000; debit Paid-in Capital in Excess of Stated Valueâ$3,000; credit Common Stock $21,000.
	debit Cash $18,000; credit Common Stock $18,000.

The Statement of Cash Flows reports the sources and uses of cash from all of the following EXCEPT

financing activities.

managerial activities.

operating activities.

On the Income Statement, the results of discontinued operations are reported

immediately after the extraordinary items section.

before the operating income section.

as part of other income (expense).

net of income tax or net of income tax savings.

By NOT accruing warranty expense

reported expenses will be understated, and net income will be understated.

reported expenses will be overstated, and reported liabilities will be understated.

reported liabilities will be understated, and net income will be overstated.

reported liabilities will be overstated, and net income will be understated.

The adjusting entry to record incurred but not yet paid employee wages includes

	a debit to Cash.
	a debit to Wages Payable.
	a debit to Wages Expense.
	a debit to Wages Earned.

The type of stock that does NOT carry paid-in capital in excess of par is called

	par stock.
	stated value stock.
	no-par stock.
	outstanding stock.

investing activities.

What was the percentage of change in Accounts Receivable if the balance was $80,000 in 2013 and $60,000 in 2014?

	+25.00%.
	+33.33%.
	-25.00%.
	-33.33%.

In accounting, what is the meaning of capitalized?

	Capitalized means that an asset account is debited (increased) for the cost of an asset.
	Capitalized means that the cost of an asset is recorded as a debit (increase) to expense.
	Capitalized means that a given city has been selected as a government center.
	Capitalized means that a liability account is credited (increased) for the cost of an asset.

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