COLLEGE ACCOUNTING (LL)W/ACCESS>CUSTOM<
4th Edition
ISBN: 9781260255157
Author: Haddock
Publisher: MCG CUSTOM
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Chapter 5, Problem 4E
To determine
Determine the effect of omitting
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Which of the following adjusting entries involves the recognition of an accrued expense?
a. recording depreciation on a long-lived asset
b. writing off the portion of an insurance policy that has expired
c. recognition of salaries owed to employees for work done during the current period that will be paid during the next accounting period
d. recognition of bad debt losses that are expected to result from making sales on credit terms
An example of an item that should be reported as a prior-period adjustment in a company’s annual financial statements is a. a settlement resulting from litigation. b. an adjustment of income taxes. c. a correction of an error that occurred in a prior period. d. an adjustment of utility revenue because of rate revisions ordered by a regulatory commission.
Which of the following is not a characteristic of non-counterbalancing error?
a. If not detected, this is not automatically corrected in the next accounting period.
b. The income statement of the period in which the non-counterbalancing error is committed is misstated.
c. The statement of financial position of the year of non-counterbalancing error and succeeding statement of financial position are incorrect until the error is corrected.
d. If the net income of one year is understated due to non-counterbalancing error, the net income of subsequent year is also affected.
Chapter 5 Solutions
COLLEGE ACCOUNTING (LL)W/ACCESS>CUSTOM<
Ch. 5 - What are adjustments?Ch. 5 - Prob. 1.2SRQCh. 5 - Prob. 1.3SRQCh. 5 - Prob. 1.4SRECh. 5 - Prob. 1.5SRECh. 5 - Prob. 1.6SRACh. 5 - Prob. 2.1SRQCh. 5 - Prob. 2.2SRQCh. 5 - Prob. 2.3SRQCh. 5 - Prob. 2.4SRE
Ch. 5 - On a worksheet, the adjusted balance of the...Ch. 5 - Prob. 2.6SRACh. 5 - Prob. 1CSRCh. 5 - Prob. 2CSRCh. 5 - Prob. 3CSRCh. 5 - Prob. 4CSRCh. 5 - The Supplies account has a debit balance of 9,000...Ch. 5 - Prob. 1DQCh. 5 - Prob. 2DQCh. 5 - Prob. 3DQCh. 5 - Prob. 4DQCh. 5 - Prob. 5DQCh. 5 - Prob. 6DQCh. 5 - Prob. 7DQCh. 5 - Prob. 8DQCh. 5 - What effect does each item in Question 8 have on...Ch. 5 - Why is it necessary to journalize and post...Ch. 5 - Prob. 11DQCh. 5 - Prob. 12DQCh. 5 - How does a contra asset account differ from a...Ch. 5 - Prob. 14DQCh. 5 - Prob. 1ECh. 5 - Prob. 2ECh. 5 - Prob. 3ECh. 5 - Prob. 4ECh. 5 - Journalizing and posting adjustments. Desoto...Ch. 5 - Prob. 1PACh. 5 - Prob. 2PACh. 5 - Prob. 3PACh. 5 - Prob. 4PACh. 5 - Prob. 1PBCh. 5 - Prob. 2PBCh. 5 - Prob. 3PBCh. 5 - Sam Nix owns Nix Estate Planning and Investments....Ch. 5 - The Effect of Adjustments Assume you are the...Ch. 5 - The account balances for the Patterson...Ch. 5 - Prob. 1MFCh. 5 - Prob. 2MFCh. 5 - Prob. 3MFCh. 5 - Prob. 4MFCh. 5 - Prob. 1ED
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- The Effect of Ignoring Adjusting Entries on Net Income For each of the following independent situations, determine whether the effect of ignoring the required adjusting entry will result in an understatement (U), will result in an overstatement (O), or will have no effect (NE) on net income for the period.arrow_forwardIf the income statement error is discovered in the year of error, what action is to be done by the entity? a. Reclassify the item to its proper nominal account. b. Reclassify the item to real account. c. Adjust the effect to the retained earnings account. d. Ignore the error.arrow_forwardWhich of the following experts would be more objective? expert who owes money to the client O expert is a past employee of the company O expert is related to the chief financial officer of the client O expert is completely independent of the clientarrow_forward
- Which of the following best describes the proper accounting for interim financial reports? a. The interim period is viewed as an integral part of the annual accounting period. b. The interim period is viewed as a distinct, independent accounting period. c. Interim net income should be determined by using the same principles as those for the annual accounting period. d. Net income should be computed on the cash basis except for sales, cost of goods sold, and depreciation.arrow_forwardWhich of the following is most likely not considered an adjusting entry? a. The accrual of an electricity bill for electricity used but not yet paid b. The recognition of depreciation expense for the period c. The recognition of the used and unused portions of a prepaid rent d. The entry to record the collection of interest receivablearrow_forwardIf the income statement error is discovered in a subsequent accounting period, what action is to be done by the entity? Group of answer choices a. Reclassify the item to its proper nominal account and restate the income statement of the prior year affected by the error. b. Restate the income statement of the prior year affected by the error. c. No reclassifying entry is necessary but restate the income statement of the prior year affected by the error. d. Reclassify the item to its proper nominal account. Recording of next year's sales as sales of the current year will Group of answer choices a. overstate net income of next year b. not affect retained earnings at the end of next year c. understate retained earnings at the end of the current year d. understate net income of the current yeararrow_forward
- CHOOSE FROM THE FOLLOWING ACCOUNTS FOR THE CORRECT ACCOUNT OF ADJUSTING ENTRIES: deferred revenue salesarrow_forwardWhich of the following best describes Accrued Liabilities?a. Long-term liabilities.b. Current amounts owed to suppliers of inventory.c. Expenses incurred, but not paid at the end of theaccounting period.d. Revenues that have been collected but not earnedarrow_forwardWhich of the following types of errors will not self-correct in the next year? Accrued expenses not recognized at year-end Accrued revenues that have not been collected not recognized at year-end Depreciation expense overstated for the year Prepaid expenses not recognized at vear-endarrow_forward
- Which accounting principle requires that bad debts expense be recognized in the same period as the sale? A) Measurement principle B) Expense Recognition (Matching) principle C) Revenue Recognition principle D) Historical Cost principle Please answer ASAP, I will upvotearrow_forwardWhich of the following journals would correctly post an adjustment for deferred (prepaid) income? Select one: A. DR Income Account / CR Asset B. DR Asset / CR Income Account C. DR Income Account / CR Deferred Income D. DR Deferred income / CR Income Accountarrow_forwardAllowance for Uncollectible Accounts is a contra asset account, which means that its normal balance is a credit. However, it is possible for the account to have a debit balance before year-end adjustments are recorded. Explain how this could happen. How does an accountant calculate the year-end adjustment for Allowance for Uncollectible Accounts with a debit balance before year-end adjustments recorded? Please explain both answers in good detail answerarrow_forward
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