Adjustment

Expenses incurred but not yet paid or recorded are called

• interim expenses.

• unearned expenses

• accrued expenses

• prepaid expenses

Memtek Enterprises purchased Office supplies costing $8,500 and debited Office Supplies for the full amount. At the end of the accounting period, a physical count of office supplies revealed $2,900 still on hand. The appropriate adjusting journal entry to be made at the end of the period would be

• Debit Office Supplies, $2,900;

  Credit Office Supplies Expense, $2,900.

• Debit Office Supplies Expense, $2,900;

  Credit Office Supplies, $2,900.

• Debit Office Supplies, $5,600;

  Credit Office Supplies Expense, $5,600.

• Debit Office Supplies Expense, $5,600;

  Credit Office Supplies, $5,600

Frame Enterprises purchased equipment for $12,000 on February 1. It is estimated that annual depreciation on the equipment will be $2,400. If financial statements are to be prepared on December 31, the company should make the following adjusting entry:

• Debit Depreciation Expense, $9,600;

  Credit Accumulated Depreciation, $9,600.

• Debit Depreciation Expense, $2,400;

  Credit Accumulated Depreciation, $2,400.

• Debit Office Equipment, $12,000;

  Credit Accumulated Depreciation, $12,000.

• Debit Depreciation Expense, $2,200;

  Credit Accumulated Depreciation, $2,200.

Red Laundry Company purchased $8,100 worth of laundry supplies on June 2 and recorded the purchase as an asset. On June 30, an inventory of the laundry supplies indicated only $5,900 on hand. The adjusting entry that should be made by the company on June 30 is

• Debit Laundry Supplies Expense, $2,200;

  Credit Laundry Supplies, $2,200.

• Debit Laundry Supplies Expense, $5,900;

  Credit Laundry Supplies, $5,900.

• Debit Laundry Supplies, $5,900;

  Credit Laundry Supplies Expense, $5,900.

• Debit Laundry Supplies, $2,200;

  Credit Laundry Supplies Expense, $2,200.

North University sold season tickets for the 2023 football season for $102,000. A total of 6 games will be played during September, October and November. In September, two games were played. In October, three games were played. The balance in Unearned Revenue at October 31 is

• $18,000

• $17,000.

• $85,000.

• $0.

West University sold season tickets for the 2023 football season for $160,000. A total of 8 games will be played during September, October and November. Assuming all the games are played, the Unearned Revenue balance that will be reported on the December 31 balance sheet will be

• $160,000

• $100,000.

• $60,000.

• $0.

Binder Inc. purchased a 24-month insurance policy on March 1, 2023 for $11,040. At March 31, 2023, the adjusting journal entry to record expiration of this asset will include a

• debit to Insurance Expense and a credit to Cash for $460.

• debit to Prepaid Insurance and a credit to Cash for $11,040.

• debit to Prepaid Insurance and a credit to Insurance Expense for $485

• debit to Insurance Expense and a credit to Prepaid Insurance for $460

Sue Smiley has performed $500 of CPA services for a client but has not billed the client as of the end of the accounting period. What adjusting entry must Sue make?

• Debit Unearned Revenue and credit Service Revenue

• Debit Accounts Receivable and credit Service Revenue

• Debit Cash and credit Unearned Revenue

• Debit Accounts Receivable and credit Unearned Revenue

Clark Real Estate signed a 4-month note payable in the amount of $2,000 on September 1. The note requires interest at an annual rate of 8%. The amount of interest to be accrued at the end of September is

• $13

• $160

• $33

• $40

Trent Tables paid employee wages on and through Friday, January 26, and the next payroll will be paid in February. There are three more working days in January (29–31). Employees work 5 days a week and the company pays $900 a day in wages. What will be the adjusting entry to accrue wages expense at the end of January?

• Wages Expense

  4,500

   

  Wages Payable

   

  4,500

   

• Wages Expense

  900

   

  Wages Payable

   

  900

   

• Wages Expense

  2,700

   

  Wages Payable

   

  2,700

   

• No adjusting entry is required