6. Which of the following is least likely to be an adjusting entry a. The entry to accrue salaries already earned by t employees but not yet paid by the company. b. The entry to record the annual depreciation of equipme at year-end. c. The entry to recognize the earned portion of an advanc collection of income. d. The entry to record the temporary withdrawals of t owner from the business. 7. Which of the following is most likely to be an adjusting entry a. The entry to record the prepayment of insurance. b. The entry to record the advanced collection of re income. The entry to record a sale on account. d. The entry to record doubtful accounts exnense C.

6. Which of the following is least likely to be an adjusting entry a. The entry to accrue salaries already earned by t employees but not yet paid by the company. b. The entry to record the annual depreciation of equipme at year-end. c. The entry to recognize the earned portion of an advanc collection of income. d. The entry to record the temporary withdrawals of t owner from the business. 7. Which of the following is most likely to be an adjusting entry a. The entry to record the prepayment of insurance. b. The entry to record the advanced collection of re income. The entry to record a sale on account. d. The entry to record doubtful accounts exnense C.

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Question. A company made an error in calculating and reporting amortization expense in Year 1. The error was discovered in Year 2. The item should be reported as a prior period adjustment: a. on the Year 2 statement of retained earnings. b. on the Year 1 statement of retained earnings. c. accounted for with a cumulative "catch-up" adjustment in Year 2. d. on the Year 2 income statement. e. on the Year 1 income statement.
If 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.
required: 1.By how much would the December 31, 2021 retained earnings be misstated ifno adjustments were made for the above errors? 2.Compute for the adjusted net income for the year 2021.
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.
If 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 year
A. By how much would the December 31, 2021 retained earnings be misstated if no adjustments were made for the above errors? B. Compute for the adjusted net income for the year 2021.
If a company makes a prior period adjustment, which of the following describes how it must be reported? 1.The adjustment is recorded in retained earnings, and previous years' financial statements presented for comparative purposes are not changed 2.The adjustment is recorded in retained earnings, and previous years' financial statements presented for comparative purposes are adjusted. 3.The adjustment is recorded as a deferred asset or deferred liability and amortized using the straight-line method. 4.The adjustment is reported in the current period's income statement as a separate item.
What is the impact of prepaid expenses before year end adjusting entries. The answer is A . Understate assets and overstate expenses . B . Overstate liabilities and understate expenses. C. Overstate assets and understate expenses . D. Understate liabilities and overstate expenses.
Which of the following accounts would not appear in aclosing journal entry?a. Interest Revenueb. Accumulated Depreciationc. Retained Earningsd. Salaries and Wages Expense
What is the impact of accrued expenses before year end adjusting entries ? The answer is .A. Understate expenses and understate liabilities. B. Understate assets and understate expenses . C. Overstate assets and understate expenses . D. Understate expenses and overstate liabilities.
According to AASB110, which of the following is an adjusting event? Select one: a. All of the above b. Determination after the end of the reporting period of amount of profit sharing or bonus payments c. Determination after the end of the reporting period of cost of assets purchased prior to year end d. Discovery of fraud or errors showing that the financial statements are incorrect
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.