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AIPB book 1 sect 3

AIPB certified bookkeeper, mastering adjusting entries,

QuestionAnswer
1) Make AJE: Accrue interest expense $3000 1) Dr. Interest expense 3,000 - Cr. Interest payable 3,000 - To accrue interest expense
2) Make AJE: Accrue property tax expense $1,200 2) Dr. Property taxes 1,200 - Cr. Property taxes payable 1,200 - To accrue property tax expense
3) Make AJE: Accrue salaries expense of $10,000 3)Dr. Salaries expense 10,000 - Cr. Salaries payable - To accrue salaries expense
4) The company has a 6-day workweek and payday is Sat. Weekly salaries are $12,000, and your company contributes to each employee's pension by contributing 3% of salaries to the Pension Fund account. Make the AJE when the accounting period ends on a Tues. 4) Dr. Salaries expense 4,000 - Cr. Salaries payable 4,000 - To accrue salaries expense
5)What adjusting entry (if any) do you record ifthe accounting period ends on a saturday? 5) Dr. Pension expense 120 - Cr. Pension payable 120 - To accrue pension expense
6) Your payroll for the last week of the year (your company uses a 5-day workweek) is $40,000 and December 31 falls on a Thursday. Record the adjusting journal entry at year end. 6)Dr. Wages (or salaries) expense 32,000 - Cr. Wages (or salaries) payable 32,000 - To accrue wages
7) Your company borrows %50,000 on a 6-month,12% note on October 1. Year end is November 30. Record the accrued interest at November 30. 7) Dr. interest expense 1,000 - Cr. Interest payable 1,000 - To accrue 2 months interest expense
8)What kind of account is Taxes Payable? 8) Liability
9)If your company forgets to accrue utilities expense at year end, how does it affect net income? 9) Net income will be overstated
10) If a company fails to record an ajusting entry for property taxes, then net icome will be..... 10) Overstated
11) TRUE OR FALSE: An accrued expense is one that is incurred but not yet paid. 11) True
12) TRUE OR FALSE : With an accrued expense, payment follows recognition of the expense. 12) True
13) An accrued expense is one that has been _____ but not _______ 13) Incurred, paid
14)An expense is accrued by debiting a(n) _______ account and crediting a(n)________ account. 14) expense, payable (or liability)
15) An adjusting entry to accrue an expense (increases/decreases) net incom 15) Decreases
16)An expense recorded as incurred but not paid is presented as a(n)________ on the balance sheet 16) Liability
17) On December 31, 19X1, Faco incurs wage expense of $8,000 for December 29-31 that has not been either recored or paid. 17) Dr. Wages expene 8,000 - Cr. Wages payable 8,00 - To accrue wages expense
18)Rent for December of $2,300 will be paid on January 2. 18)Dr. Rent expense 2,300 - Cr. Rent payable 2,000 - To accrue rent expense
Of the 1,000 in commission payable on December 31, only 400was paid 19) Dr. Commissions expense 400- Cr. Cash 400 - AJE Dr. Commissions expense 600 - Cr. Commissions payable 600 - To accrue commissions expense
21) Make AJE: Accrue utility expense 2,500 21)
22) Accrue sales commission of 18,000 22) Dr. Sales commision expense 18,000 - Cr. Sales commission payable 18,000 - To accrue sales commission
23)Accrue salaries expense of 42,000 23)Dr. Salaries expense 42,000 - Cr. Salaries payable 42,000 - To accrue salaries expense
24) Your company has a 5-day workweek and pays employess on Friday. The weekly gross payroll is $100,000, and the year ends on Thursday. Record the adjusting Journal entry at year end. 24) Dr. Salaries expense 80,000 - Cr. Salaries payable 80,000 - To accrue salaries expense
25)TRUE OR FALSE: Accrued taxes appear on the balance sheet as a liability. 25) True
26)A company failed to accrue employee salary expense. What effect does this have on net income and liabilities respectively? 26)Overstates net income and understates liabilities
27)TRUE OR FALSE: An accrued expense is paid when incurred 27)False
28)TRUE OR FALSE: An adjusting entry to accrue interest expense does not involve cash. 28)True
29) On Dec 1, 19X3, Wyco, a calendar year company, borrows 30,000 on a 6-month, 8% note payable.The interest is payable at the maturity date.Of the amount borrowed, 6,000 will be used to pay Wycos 19X3 income tax when it files a return in 19X4. (CONT.) 29)
29)Another portion of the loan will go to pay part of wyco's weekly payroll of 12,000 for the last week of the year. Wyco uses a -day workweek and payday is Friday. What adjusting entries does wyco record on Tuesday, December 31, 19X3? 29)Dr. Interest expense 200 - Cr. Interest payable 200 - To accrue interest expense - Dr. Income tax expense 6,000 - Cr. Income tax payable 6,000 - To accrue income tax exp - Dr. Salaries expense 4,800 - Cr. Salaries payable 4,800 - To accrue salaries exp
Created by: cidhart