Last Updated 01 Sep 2020

Chapter 3

Category Accounting, Money
Words 290 (1 page)
Views 145
Table of contents

Multiple Choice Questions (10 points each) Select the ONE, BEST Answer

Adjusting entries:

    Order custom essay Chapter 3 with free plagiarism report

  • Affect only income statement accounts.
  • Affect only balance sheet accounts.
  • Affect both income statement and balance sheet accounts.
  • Affect only cash flow statement accounts.
  • Affect only equity accounts.

An adjusting entry could be made for each of the following except:

  • Prepaid expenses.
  • Depreciation.
  • Owner withdrawals.
  • Unearned revenues.
  • Accrued revenues.

Accrued revenues:

  1. At the end of one accounting period often result in cash receipts from customers in the next period.
  2. At the end of one accounting period often result in cash payments in the next period.
  3. Are also called unearned revenues.
  4. Are listed on the balance sheet as liabilities.
  5. Are recorded at the end of an accounting period because cash has already been received for revenues earned.

On May 1, 2007 Giltus Advertising Company received $1,500 from Julie Bee for advertising services to be completed April 30, 2008. The Cash receipt was recorded as unearned fees and at December 31, 2007, $1,000 of the fees had been earned. The adjusting entry on December 31 Year 1 should include:

  • A debit to Unearned Fees for $500.
  • A credit to Unearned Fees for $500.
  • A credit to Earned Fees for $1,000.
  • A debit to Earned Fees for $1,000.
  • A debit to Earned Fees for $500.

Problem (60 points)

A company has 20 employees who each earn $500 per week for a 5-day week that begins on Monday. December 31 of Year 1 is a Monday, and all 20 employees worked that day. Prepare the required adjusting journal entry to record accrued salaries on December 31, 2004. Prepare the journal entry to record the payment of salaries on January 4, 2005. Dec. 31st, 2004DrCr Salaries expense$2,000 Salaries payable$2,000 Jan. 4, 2005 DrCr Salary expense$8,000 Salary payable$2,000 Cash Paid$10,000

This essay was written by a fellow student. You can use it as an example when writing your own essay or use it as a source, but you need cite it.

Get professional help and free up your time for more important courses

Starting from 3 hours delivery 450+ experts on 30 subjects
get essay help 124  experts online

Did you know that we have over 70,000 essays on 3,000 topics in our database?

Cite this page

Explore how the human body functions as one unit in harmony in order to life

Chapter 3. (2018, May 12). Retrieved from

We use cookies to give you the best experience possible. By continuing we’ll assume you’re on board with our cookie policy

Save time and let our verified experts help you.

Hire writer