A company provides maintenance services to customers. The company's policy is to provide services and then bill customers on the 10th of the following month

A company provides maintenance services to customers. The company's policy is to provide services and then bill customers on the 10th of the following month. In December 2021, the company provided services of $14,000 and plans to bill customers on January 10, 2022. What adjusting entry, if any, will the company record on December 31, 2021?

A) Debit Accounts Receivable and credit Deferred Revenue for $14,000.

B) Debit Accounts Receivable and credit Service Revenue for $14,000.

C) Debit Service Revenue and credit Accounts Receivable for $14,000.

D) No adjusting entry is necessary at the end of the year.

Answer: B

On November 1, 2021, a company signs a one-year contract to provide services. The agreement specifies payments of $4,500 to be received every three months for a total of $18,000 over the entire year ($1,500 per month). No entry is made on November 1, 2021, at the time the contract is signed. What adjusting entry does the company need to record at the end of the year?

A) Debit Accounts Receivable and credit Service Revenue for $15,000.

B) Debit Service Revenue and credit Accounts Receivable for $12,000.

C) Debit Accounts Receivable and credit Service Revenue for $3,000.

D) Debit Accounts Receivable and credit Service Revenue for $18,000.

Answer: C

On October 1, 2021, a company purchases equipment for $72,000. The equipment is expected to be used for the next four years (48 months)

On October 1, 2021, a company purchases equipment for $72,000. The equipment is expected to be used for the next four years (48 months). What adjusting entry should the company record on December 31, 2022?

A) Debit Depreciation Expense and credit Accumulated Depreciation for $13,500.

B) Debit Depreciation Expense and credit Accumulated Depreciation for $18,000.

C) Debit Depreciation Expense and credit Accumulated Depreciation for $22,500.

D) Debit Depreciation Expense and credit Accumulated Depreciation for $4,500.

Answer: B

On October 1, 2021, a company purchases equipment for $72,000. The equipment is expected to be used for the next four years (48 months). What adjusting entry should the company record on December 31, 2021?

A) Debit Depreciation Expense and credit Cash for $72,000.

B) Debit Depreciation Expense and credit Accumulated Depreciation for $72,000.

C) Debit Equipment and credit Depreciation Expense for $4,500.

D) Debit Depreciation Expense and credit Accumulated Depreciation for $4,500.

Answer: D

The employees of Neat Clothes work Monday through Friday. Every other Friday the company issues payroll checks totaling $32,000 (or $3,200 per weekday)

The employees of Neat Clothes work Monday through Friday. Every other Friday the company issues payroll checks totaling $32,000 (or $3,200 per weekday). The current pay period ends on Friday, January 3. Neat Clothes is now preparing financial statements for the year ended December 31. What is the adjusting entry to record accrued salaries at the end of the year?

A) Debit Salaries Payable and credit Salaries Expense for $22,400.

B) Debit Salaries Expense and credit Salaries Payable for $6,400.

C) Debit Salaries Expense and credit Salaries Payable for $9,600.

D) Debit Salaries Expense and credit Salaries Payable for $22,400.

Answer: D

A company owes employee salaries of $16,000 at the end of the year. These salaries will be paid in the following year. What adjusting entry, if any, does the company need to record at the end of the year?

A) Debit Salaries Expense and credit Cash for $16,000.

B) Debit Salaries Expense and credit Salaries Payable for $16,000.

C) Debit Salaries Payable and credit Salaries Expense for $16,000.

D) No adjusting entry is necessary at the end of the year.

Answer: B

A company receives a utility bill each month for services received. The company's policy is to pay the utility bill within 30 days of receipt. On December 31, 2021, the company receives a utility bill of $4,200 for the month of December and plans to pay the bill by January 30, 2022. What adjusting entry, if any, will the company record on December 31, 2021?

A) Debit Utilities Expense and credit Cash for $4,200.

B) Debit Utilities Expense and credit Utilities Payable for $4,200.

C) Debit Utilities Payable and credit Utilities Expense for $4,200.

D) No adjusting entry is necessary at the end of the year.

Answer: B

A company purchased $270,000 in supplies during the year. The supplies account increased by $10,000 during the year to an ending balance of $66,000

A company purchased $270,000 in supplies during the year. The supplies account increased by $10,000 during the year to an ending balance of $66,000. For what amount was the adjusting entry to supplies expense?

A) $300,000.

B) $280,000.

C) $260,000.

D) $240,000.

Answer: C

At the beginning of the year, a company had a balance in its prepaid insurance account of $48,400. During the year, $86,000 was paid for insurance. At the end of the year, after adjusting entries were recorded, the balance in the prepaid insurance account was $42,000. Insurance expense for the year would be:

A) $92,400.

B) $86,000.

C) $134,400.

D) $6,400.

Answer: A

Yummy Foods purchased a one-year hazard insurance policy on August 1 and recorded the $4,200 premium to prepaid insurance

Yummy Foods purchased a one-year hazard insurance policy on August 1 and recorded the $4,200 premium to prepaid insurance. At its December 31 year-end, Yummy Foods would record which of the following adjusting entries?

A) Debit Insurance Expense and credit Prepaid Insurance for $1,750.

B) Debit Prepaid Insurance and credit Insurance Expense for $1,750.

C) Debit Insurance Expense and credit Accounts Payable for $4,200.

D) Debit Insurance Expense and credit Prepaid Insurance for $2,450.

Answer: A

Which of the following would not typically be used as an adjusting entry?

A) Debit Rent Expense and credit Prepaid Rent.

B) Debit Cash and credit Deferred Revenue.

C) Debit Interest Expense and credit Interest Payable.

D) Debit Deferred Revenue and credit Service Revenue.

Answer: B

The adjusting entry required when goods and services are provided to customer for amounts previously recorded as deferred revenues includes:

A) A debit to a liability.

B) A debit to an asset.

C) A credit to a liability.

D) A credit to an asset.

Answer: A

An example of an adjusting entry would not include:

A) Recording interest earned on bank account balances.

B) Recording the expiration of prepaid rent.

C) Recording unpaid salaries.

D) Recording the purchase of office supplies.

Answer: D

Providing goods or services to customers on account is an example of a(n):

A) Accrued expense.

B) Accrued revenue.

C) Prepaid expense.

D) Deferred revenue.

Answer: B