ACC 106 - Chapter 3 (Adjusting)

What account is used to adjust the value of a long term asset?

• Depreciation Expense

• Unearned Revenue

• Depreciation Revenue

• Supplies Expense

Which of the following is the correct journal entry for adjusting depreciation on a Vehicle?

• Debit Depreciation Expense, Credit Accumulated Depreciation

• Debit Accumulated Depreciation, Credit Depreciation Expense

• Debit Depreciation Expense, Credit Vehicle

• Debit Vehicle, Credit Depreciation Expense

When do you record Supplies Expense?

• When you use up supplies

• When you purchase supplies

• When you sell supplies

• When supplies depreciate

When do you record Revenue in Accrual Based Accounting?

• When you earn revenue by providing a service or selling a good.

• When you are paid by a customer.

• When a customer asks for a quote

• At the end of the accounting cycle

How do you journalize the adjusting entry for unearned revenue?

• Debit Unearned Revenue, Credit Revenue

• Debit Revenue, Credit Unearned Revenue

• Debit Cash, Credit Unearned Revenue

• Debit Cash, Credit Revenue

If at the beginning of the month you purchase $300 of supplies, and at the end of the month the supplies on hand were $200, what is the adjusting entry needed at the end of the month?

• Debit Supplies Expense $100, Credit Supplies $100

• Debit Supplies Expense $200, Credit Supplies $200

• Debit Supplies Expense $300, Credit Cash $300

• Debit Supplies $300, Credit Cash $300

If you pay salaries on Mondays but January 31 lands on Thursday, what is the adjusting entry needed at month end?

• Debit Salary Expense, Credit Salary Payable

• Debit Salary Expense, Credit Cash

• No transaction is needed until Monday

• Debit Salary Expense, Credit Accounts Payable

If last month you paid $1000 for a 5 month insurance policy, how would you journalize the adjustment needed after 3 months?

• Debit $600 Insurance Expense, Credit $600 Prepaid Insurance

• Debit $600 Insurance Expense, Credit $600 Prepaid Insurance Expense

• Debit $1000 Insurance Expense, Credit $1000 Prepaid Insurance

• Debit $200 Insurance Expense, Credit $200 Prepaid Insurance Expense

When do we complete adjusting entries?

• When we are going to prepare financial statements

• When asked by a manager

• When being audited

• At the end of every month

What is the most important information for making all adjustment entries?

• The time period you are adjusting for (ie quarterly, annually, monthly, etc.)

• The beginning balance for each account from the un-adjusted Trial Balance

• The amount of depreciation for your equipment

• The good or service your company provides