If an adjustment for salaries earned but not recorded or paid in the amount of $85,000 were to be. Feedback: Incorrect. Which of the following is true about adjusting entries? Demonstrate the required adjusting entry of the business by completing the following sentence. All of the foregoing statements are true. This balance will be the only amount in the account Inventory until the end of the year. Adjusting entries reflect unrecorded economic activity that has taken place but has not yet been recorded because it is either more convenient to wait until the end of the period to record the activity, or because no source document concerning that activity has yet come to the accountant’s attention. a. Debit entries are made before credit entries. 43. When recording an adjusting entry for unearned revenues, 42. a. O True False QUESTION 25 Adjusting entries are recorded and posted after closing entries. The Accountant version is different from the regular versions. Closing the balances of revenue, expense and dividend accounts to zero. Accrual-basis accounting imvolves recording revenues when providing goods and services to customers and recording expenses with their trelated revenues. An adjusted trial balance contains nominal and real accounts. Answers: Adjusting entries reduce the balance of revenue, expense, and dividend accounts to zero. Adjusting entries allow for the proper recognition of revenue. Adjusting entries are dated as of the first day of the new accounting period. Each time it prepares an income statement and a statement of financial position. 'ii' Your answer Is correct! Adjusting entries to accrue revenue will affect an income statement account only. Which of the following is not true regarding the general ledger account for Cash? a.Adjusting entries are dated as of the first day of the new accounting period. True False QUESTION 26 An income statement is an itemized statement for the purpose of providing information regarding the results of operations during a specified period of time. None of these statements are true. Revenues are understated if accrual of revenue is omitted. C. They zero the balance of all income statement accounts. Which financial accounting number impacts stock prices more than any other single piece of information? Which of the following best describes the information reported in the income statement? !J Reed about !tis v 1 Enter unadjusted trial balance. ... copy of month-end adjusting entries. Feedback: Correct. The adjusted trial balance is prepared, 44. Course Hero is not sponsored or endorsed by any college or university. Reversing entries are required by Generally Accepted Accounting Principles. The cash account will always be … Financing cash flows in the statement of cash flows would include which of the following? The recording of adjusting entries is supported by the. Revenues are reported in the period in which cash is received, and expenses are reported when cash is paid out. the income statement, the retained earnings statement, and the classified balance sheet. Which of the following regarding adjusting entries is correct? _____ The work sheet cannot be used as a basis for posting to ledgers. Let's assume that at the end of the year a physical count of inventory is taken and it has an actual cost of $40,000. Adjusting entries are needed because we use accrual-basis accounting. d. All of the choices are correct regarding adjusting entries. D. The legal authority to set accounting standards lies with the: The primary objective of financial accounting is to provide useful information to managers in making decisions. An entity must make adjusting entries a. Generally Accepted Accounting Principles (GAAP) are best defined as: Government-mandated rules that companies must follow. The amount recognized from providing goods and services to customers compared to the cost of doing so. "13.Which of the following statements is true regarding adjusting entries?a.Adjusting entries are dated as of the first day of the new accounting period. Entries are necessary due to the conservatism principle B. _____ The work sheet is distributed to management and other interested parties. Once the adjusted trial balance is balanced, it can be used to prepare. b) reversing entries are not the exact opposite of adjusting entries. Which of the following is true about adjusting entries? External transaction are transactions the company conducts with a separate economic entity such as selling products to a customer, purchasing supples from a vendo paying salaries to an einployee. Which of the following statements is true? Which of the following transactions would cause a decrease in both assets and stockholders' equity? Which of the following is (are) true regarding the characteristics of adjusting entries? Which of the following accounts would normally have a debit balance? B. 2. Explain the required steps to complete a work sheet by placing the following in the correct order of completion. Adjusting entries involve A. B. Which of the following accounts has a credit balance? Adjusting entries allow for the proper recognition of expenses. The equation best describing the balance sheet is: Assets = Liabilities + Stockholders' Equity. For multiple-choice and true/false questions, simply press or click on what you think is the correct answer. Entries can be done at the beginning or end of the accounting period. Which of the following statements is false? When viewing a company's accounting records, the terms "debit" and "credit would typically be seen in which lacation. and booowing money hom a bank. Adjusting entries allow for the proper recognition of revenue. b. Reversing entries are most often used with accrual-type adjustments. Adjusting entries are optional with accrual-basis accounting. c.Adjusting entries are not posted to the ledger. Its purpose is to test the equality between debits and credits after adjusting entries are prepared. matching concept. Adjusting journal entries are required to record transactions in the right accounting period. Adjusting entries are optional with accrual-basis accounting. The assumption that a business will continue to operate into the future is the: The periodicity assumption indicates that the economic life of an enterpise can be divided into artificial time periods for financial reporting purposes. Adjusted trial balance - This is prepared after adjusting entries are made and posted. Financial accounting has an impact on everyday business decisions as well as wide-ranging economic consequences. (a) Journal entries show the effects of transactions (b) Journal entries provide account balances A) Responses to the auditor's questions by client employees is considered highly persuasive evidence. 40. b.Adjusting entries are optional with accrual basis accounting. A. Adjusting entries are dated as of the first day of the new accounting period. To adjust the Inventory account balance from a debit balance of $35,000 to a debit balance of $40,000, the following adjusting entry will be needed: Let's also assume that the Purchases account sho… B. Adjusting entries are recorded under accrual-basis accounting, dated as of the. Investing cash flows generally include cash receipts and cash payments for transactions involving revenue and expense during the period. Adjusting entries are not posted to the ledger. Which of the following statements regarding the role of cash in adjusting entries is true? Adjusting entries, also known as adjusting journal entries (AJE), are the entries made in the accounting journals of a business firm to adapt or to update the revenues and expenses accounts according to the accrual principle and the matching concept of accounting. b. To ensure that the revenue recognition and expense recognition principles are followed. If you have difficulty answering the following questions, learn more about this topic by reading our Adjusting Entries … Adjusting entries always affect at least one revenue or expense account and one asset or liability account. Reversing entries are dated December 31, the end of the fiscal year. None of these financial statement choices are prepared with the adjusted trial balance. The account type that represents payments to stockholders is called: Which of the following does not represent of company? Which of the following is an accurate statement regarding audit evidence? including the income statement, the retained earnings statement, and the classified balance sheet. To better understand the necessity of adjusting entries, the article will discuss a series of examples. Adjusting entries are recorded under accrual-basis accounting, dated as of the last day of the period, and posted to the general ledger accounts. The adjusting entry required when goods and services are provided to customer for amounts previously recorded as deferred revenues includes: A post-closing trial balance is a list of all accounts and their balances after we have updated account balances for adjusting entries. They are a necessary part of accrual-basis accounting. Correct. All of the following are true regarding journal entries except? Adjustments are only made if cash has been received or paid during the period. Which of the following typically is considered a source document for gathering information about a transaction? Which of the following is true regarding adjusting entries Adjusting entries, 16 out of 16 people found this document helpful. All of the following regarding reversing entries are true except: a) reversing entries are dated the first day of the new accounting period. the classified balance sheet and the income statement. A. omitted, how would this affect the financial statements? Which of the following accounts would normally have a debit balance and appear in the balance sheet? Expense is recognized and cash payments for transactions involving revenue and expenses, dated as of the accounting period tool! Account for cash to cash is received or paid during the accounting period recognition of revenue and expenses the earnings... Are true or False regarding the cash account represents a cash receipt and balance.! 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