FDNACCT - Adjustments only

Adjusting entries are designed primarily to correct accounting errors.

• T

• F

The adjusting entry at year end under a periodic inventory system includes a debit Merchandise Inventory and a credit to Cost of Goods Sold.

• T

• F

Recording expenses late understates current period income.

• T

• F

Before an adjusting entry is made to accrue employee salaries, Salaries Expense and Salaries Payable are both understated.

• T

• F

Accrued revenues at the end of one accounting period are expected to result in cash payments in a future period.

• T

• F

A company paid P9,000 for a six-month insurance policy. The policy coverage began on February 1. On February 28, P150 of insurance expense must be recorded.

• T

• F

The entry to record a cash receipt from a customer when the service to be provided has not yet been performed involves a debit to an unearned revenue account.

• T

• F

Failure to record depreciation expense will overstate the asset and understate the expense.

• T

• F

The amount of Depreciation Expense and Accumulated Depreciation are always the same.

• T

• F

Allowance for Doubtful Accounts is shown on the Statement of Financial Position as a subtraction from the Accounts Receivable.

• T

• F