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ACCG100 Lecture Notes - Lecture 5: General Ledger, Accounts Receivable, Deferral

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orchidgiraffe317
15 Mar 2020
School
Macquarie University
Department
Accounting and Corporate Governance
Course
ACCG100
Professor
Colly He

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Document Summary

Lecture 5 (28/03/2019) financial accounting for business: adjusting entries & adjusted. This week: adjusting entries, post adjusting entries to general ledgers, construct an adjusted trial balance. Accrual accounting: transactions you forgot to record, transactions that have already been recorded but are incorrect. The effects of transactions are recognised when they occur, not when the cash is received/paid. We most commonly use accrual-based accounting: transactions and events are recorded in the periods in which they met the revenue, expense, asset and liability criteria this can occur before, as, or after cash has been received or paid. If the transaction has occurred not if they have been paid or received. Sales made on credit means that you have performed your service and earned your revenue a credit to your revenue and a debit to your cash account however the revenue has not yet been received.

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Related Questions

1. Using accrual accounting, revenues are recorded

a. when cash is received without regard to when the services are performed or products have been delivered to customers.

b. when a service has been performed or products have been delivered to customers without regard to when cash is received.

c. when cash is received at the time services are performed or products have been delivered to customers only if cash is received.

d.after the services are performed or products have been delivered to customers.

 

2. Deferred revenue is revenue that is

a. earned and the cash has been received.

b. earned but the cash has not been received.

c. not earned and the cash has not been received.

d. not earned but the cash has been received.

 

3. Adjusting entries always include

a. only income statement accounts.

b. only balance sheet accounts the cash account.

c. at least one income statement account and one balance sheet account.

 

4. Which of the following is considered to be an accrued expense?

a. a computer technician has installed the latest software updates and was paid on the same day

b. a computer technician has been paid in advance to install software updates as they become available

c. a computer technician has just signed an agreement with you regarding pricing for future work

d. a computer technician has installed the latest software updates, but you have not received an invoice or made payment

 

 

Please include the answer for the depreciation expense and accumulated depreciation. i noticed other posts with this similar questions didnt have the answer to those

Required: #1. Prepare journal entries to record the December transactions in the General Journal Tab in the excel template file "Accounting Cycle Excel Template.xlsx". Use the following accounts as appropriate: Cash, Accounts Receivable, Supplies, Prepaid Insurance, Equipment, Accumulated Depreciation, Accounts Payable, Wages Payable, Common Stock, Retained Earnings, Dividends, Service Revenue, Depreciation Expense, Wages Expense, Supplies Expense, Rent Expense, and Insurance Expense.
1-Dec Began business by depositing $10500 in a bank account in the name of the company in exchange for
1050 shares of $10 per share common stock.
1-Dec Paid the rent for the current month, $1450 .
1-Dec Paid the premium on a one-year insurance policy, $1320 .
1-Dec Purchased Equipment for $4200 cash.
5-Dec Purchased office supplies from XYZ Company on account, $300 .
15-Dec Provided services to customers for $9200 cash.
16-Dec Provided service to customers ABC Inc. on account, $8200 .
21-Dec Received $3400 cash from ABC Inc., customer on account.
23-Dec Paid $170 to XYZ company for supplies purchased on account on December 5 .
28-Dec Paid wages for the period December 1 through December 28, $5040 .
30-Dec Declared and paid dividend to stockholders $200 .
#2. Post all of the December transactions from the “General Journal” tab to the T-accounts under the “T-Accounts” tab in the excel template file "Accounting Cycle Excel Template.xlsx". Assume there are no beginning balances in any of the accounts.
#3. Compute the balance for each T-account after all of the entries have been posted. These are the unadjusted balance as of December 31.
#4. Prepare the unadjusted trial balance under the “Unadjusted Trial Balance” tab in the excel template file "Accounting Cycle Excel Template.xlsx" .
Provide the total of the credit column from the Unadjusted Trial Balance
#5. Record the following four transactions as adjusting entries under the “General Journal” tab.
31-Dec One month’s insurance has been used by the company $110.
31-Dec The remaining inventory of unused office supplies is $90.
31-Dec The estimated depreciation on equipment is $70.
31-Dec Wages incurred from December 29 to December 31 but not yet paid or recorded total $540.
#6. Post all of the adjusting entries to the T-accounts under the “T-Accounts” tab. Compute the balance for each T-account after all of the adjusting entries have been posted. These are the adjusted balance as of December 31.
#7. Prepare the adjusted trial balance under the “Adjusted Trial Balance” tab as of December 31 in the excel template file "Accounting Cycle Excel Template.xlsx" .
Provide the following accounts balances from the Adjusted Trial Balance:
Cash
Accounts Receivable
Supplies
Prepaid Insurance
Equipment
Accumulated Depreciation
Accounts Payable
Wages Payable
Common Stock
Retained Earnings
#8. Prepare Income Statement, Statement of Stockholder’s Equity, and Classified Balance Sheet under the “Financial Statements” tab for the month ended December 31, 20XX in the excel template file "Accounting Cycle Excel Template.xlsx".
Provide the following amount from the Income Statement:
Service Revenue
Depreciation Expense
Wages Expense
Supplies Expense
Rent Expense
Insurance Expense
Net Income
Provide the following account balance from the Statement of Stockholders' Equity:
Dividends
Provide the following account balances from the Balance Sheet:
Current Assets
Long-Term Assets
Total Liabilities
Total Stockholder’s Equity
Cash
#9. Record the closing entries under the “General Journal” tab.
#10. Post all of the closing entries to the T-accounts under the “T-Accounts” tab. Compute the balance for each T-account after all of the closing entries have been posted.
Provide the ending balance of Cash at December 31 from the T-account
Provide the balance of the Retained Earnings T-account after closing entries have been posted.
Does the ending balance of the Retained Earnings T-account agree with the balance of Retained Earnings on the Balance Sheet?
Check Point: Total Assets $ 20,950.00

1. Which of the following identifies the proper order of theaccounting cycle?

A. Analyze, Journalize, Unadjusted Trial Balance

B. Analyze, Post, Unadjusted Trial Balance

C. Journalize, Post, Adjusted Trial Balance

D. Unadjusted Trial Balance, Adjusted Trial Balance, Close

E. Adjusted Trial Balance, Adjustments, Financial Statements

2. Interim financial statements refer to financial reports:

A. That cover less than one year, usually spanning one, three orsix-month periods

B. That are prepared before any adjustments have beenrecorded

C. That show the assets above the liabilities and theliabilities above the equity

D. Where revenues are reported on the income statement when cashis received and expenses are reported when cash is paid

E. Where the adjustment process is used to assign revenues tothe periods in which they are earned and to match expenses withrevenues

3. The accounting principle that requires revenue to be reportedwhen earned is the:

A. Matching principle

B. Revenue recognition principle

C. Time period principle

D. Accrual reporting principle

E. Going-concern principle

4. Adjusting entries:

A. Affect only income statement accounts

B. Affect only balance sheet accounts

C. Affect both income statement and balance sheet accounts

D. Affect only cash flow statement accounts

E. Affect only equity accounts

5. The system of preparing financial statements based onrecognizing revenues when the cash is received and reportingexpenses when the cash is paid is called:

A. Accrual basis accounting

B. Operating cycle accounting

C. Cash basis accounting

D. Revenue recognition accounting

E. Current basis accounting

6. If throughout an accounting period the fees for legalservices paid in advance by clients are recorded in an accountcalled Unearned Legal Fees, the end-of-period adjusting entry torecord the portion of those fees that has been earned is:

A. Debit Cash and credit Legal Fees Earned

B. Debit Cash and credit Unearned Legal Fees

C. Debit Unearned Legal Fees and credit Legal Fees Earned

D. Debit Legal Fees Earned and credit Unearned Legal Fees

E. Debit Unearned Legal Fees and credit Accounts Receivable

7. A company had no office supplies available at the beginningof the year. During the year, the company purchased $250 worth ofoffice supplies. On December 31, $75 worth of office suppliesremained. How much should the company report as office suppliesexpense for the year? A. $75 B. $125 C. $175 D. $250 E. $325 8. OnJanuary 1 a company purchased a five-year insurance policy for$1,800 with coverage starting immediately. If the purchase wasrecorded in the Prepaid Insurance account and the company recordsadjustments only at year-end, the adjusting entry at the end of thefirst year is:

A. Debit Prepaid Insurance, $1,800; credit Cash, $1,800

B. Debit Prepaid Insurance, $1,440; credit Insurance Expense,$1,440

C. Debit Prepaid Insurance, $360; credit Insurance Expense,$360

D. Debit Insurance Expense, $360; credit Prepaid Insurance,$360

E. Debit Insurance Expense, $360; credit Prepaid Insurance,$1,440

9. Unearned revenue is reported on the financial statementsas:

A. A revenue on the balance sheet

B. A liability on the balance sheet

C. An unearned revenue on the income statement

D. An asset on the balance sheet

E. An operating activity on the statement of cash flows

10. Which of the following assets is not depreciated?

A. Store fixtures

B. Computers

C. Land

D. Buildings

E. Vehicles

11. On April 30, 2011, a three-year insurance policy waspurchased for $18,000 with coverage to begin immediately. What isthe amount of insurance expense that would appear on the company'sincome statement for the year ended December 31, 2011? A. $500 B.$4,000 C. $6,000 D. $14,000 E. $18,000 12. Expenses incurred butunpaid that are recorded during the adjusting process with a debitto an expense and a credit to a liability are:

A. Intangible expenses

B. Prepaid expenses

C. Unearned expenses

D. Net expenses

E. Accrued expenses

13 The difference between the cost of an asset and theaccumulated depreciation for that asset is called

A. Depreciation Expense

B. Unearned Depreciation

C. Prepaid Depreciation

D. Depreciation Value

E. Book Value

14. A company purchased a new truck at a cost of $42,000 on July1, 2011. The truck is estimated to have a useful life of 6 yearsand a salvage value of $3,000. How much depreciation expense willbe recorded for the truck for the year ended December 31, 2011?

A. $3,250

B. $3,500

C. $4,000

D. $6,500

E. $7,000

15. A company's Office Supplies account shows a beginningbalance of $600 and an ending balance of $400. If office suppliesexpense for the year is $3,100, what amount of office supplies waspurchased during the period?

A. $2,700

B. $2,900

C. $3,300

D. $3,500

E. $3,700