Under the cash basis of accounting, no adjustments are made for prepaid, unearned, and Copyright 2019 McGraw-Hill Education. 8 Become Premium to read the whole document. Olive follows a policy of recording all prepaid expenses to asset accounts at the time of cash payment. Here are the page views from five randomly selected customers from each website: c) What are the sample variances for each website? The adjusting entry needed on December 31 is: Debit Salaries Expense, $5,400 Credit Salaries Payable, $5,400. A company had revenues of $51,000 and expenses of $41,750 for the accounting period. Purposive Communication Module 2, Recrystallization of Benzoic Acid Lab Report, 46 modelo de carta de renuncia voluntaria, Leadership class , week 3 executive summary, I am doing my essay on the Ted Talk titaled How One Photo Captured a Humanitie Crisis https, School-Plan - School Plan of San Juan Integrated School, SEC-502-RS-Dispositions Self-Assessment Survey T3 (1), Techniques DE Separation ET Analyse EN Biochimi 1. It can also be referred as financial repor. Capital of A and B are in excess of average investment. On July 1 Olive Co. paid $7,500 cash for management services to be performed over a two-year period. D) A credit to a prepaid expense and a debit to Cash for $7,500. A) Accumulated depreciation. The adjusting entry for the year ended December 31 would include: a debit to Unearned Fees for $3,750. C) Cause an accrued liability account to exist. Closing revenue and expense accounts at the end of the accounting period serves to make the &\$852& \$856\\ ALVR Digital Bank granted a loan to a client A:Interest Income -It is the amount of money paid by the borrower over and above the loan amount to t Q:Bonds that pay no interest unless the issuing company is profitable Additional information from NICs accounting records is provided also. During the period, the company completed $6,200 of the agreed-on services for the client. On November 1, Jasper Company loaned another company $100,000 at a 6.0% interest rate. Because it is a necessary financial statement, the work sheet must be prepared according to B) A debit to Fees Earned and a credit to Unearned Fees for $500. D) Intangible asset. On July 1 Olive should record: 1 See answer Advertisement jepessoa Answer: The journal entry to record this should be:; Prior to recording adjusting entries, the Office Supplies account had a $388 debit balance. The accrual basis of accounting requires adjustments to recognize revenues in the periods \text{Land} &150 &150\\ For example, your bank account statement is a general ledger that gives information about the a, In accounting we start with recording transaction with journal entries then we make separate ledger account for each type of transaction. $5,200 2/4 = $2,600. Q:5. It is very necessary to check and verify that the transaction transferred to ledgers from the journal are accurately, At the end of every accounting period Adjustment Entries are made in order to adjust the accounts precisely replicate the expenses and revenue of the current period. d. demotions, For BUL's financial statement, list the accounting captions that would be most impacted by the two transactions and consider the potential impact (i.e temporary accounts, and (2) all temporary accounts have zero balances. After posting the entries to close all revenue and expense accounts, Marker Company's Adjusting entries are necessary so that asset, liability, revenue, and expense account balances The revenue recognition principle is the basis for making adjusting entries that pertain to $40,650. If total revenues for the period are $80,200, total expenses are $58,800, and dividends are $13,500, what is the ending balance in the Retained earnings account after all closing entries are made? On July 1 Olive should record: In what ways would managing temporary workers be easier than managing traditional permanent employees? b. C) $13,000. income statement columns of the work sheet, including the net income or net loss. Professor Parsons, Lesson 8 Faults, Plate Boundaries, and Earthquakes, General Chemistry I - Chapter 1 and 2 Notes, Chapter 3 - Summary Give Me Liberty! This It is also known as General Ledger. for assisting in tax There was no beginning balance in the Unearned Revenue account for the period. adjusting entry is made at the end of the period to bring the asset account balance to the correct B) A contra account. D) Expense recognition (Matching) principle. For the year ended December 31, a company has revenues of $319,000 and expenses of $197,000. $400 A debit to a prepaid expense and a credit to an expense for $1,925. On August 1, Jerry paid Garcia 12,000 for 1 year of rent in advance. Beginning Retained earnings + Revenues Expenses Dividends = Ending Retained earnings Copyright 2019 McGraw-Hill Education. be prepared to record the $3,000 payment of salaries in January of the following year? which they are used, representing the expense of using the assets, is called: 13 On the work sheet, net income is entered in the Income Statement Credit column as well as What is one area in which human If the purchase was recorded in the Prepaid Insurance account, and the C) Recognizes revenues when received in cash. C) Debit Prepaid Insurance, $360; credit Insurance Expense, $360. Assuming the college prepares adjustments monthly, what amount of tuition revenue should the college recognize on February 28? 61450 The cash receipt was credited to the Unearned Rent account. D) Affect cash accounts. A company owes its employees $5,000 for the year ended December 31. Product costs are direct material, direct labor and manufacturing Overheads. During 2022, P400,000 in merc A:Solution C) A debit to an expense and a credit to a prepaid expense for $1,875. in come statement for the first year ended December 31? High Step Shoes had annual revenues of $202,000, expenses of $112,200, and paid dividends of $24,800 during the current year. D) Buildings. understates current period income. What pH\mathrm{pH}pH values define an acid, a base, and a neutral substance? Cash (Credit) 5,600. C) Assigning expenses to the periods in which they are incurred. The furniture is estimated to have a useful life of 4 years and a salvage value of $4,000. E) Going-concern assumption. 20 Concept D) Recognize debts paid during the period. van during the first year ended December 31? Adjusting entries are usually entered in the work sheet before they are entered in the general The adjusting entry on December 31 of the current year for Olive would include: Multiple . C) Recognize assets purchased during the period. Make the December 31 adjusting journal entry to bring the balances to correct. On May 1, Sellers Marketing Company received $1,500 from Franco Marcelli for a D) A debit to Unearned Rent and a credit to Rent Revenue for $2,400. The required adjusting entry includes a $4,000 debit to Unearned Revenue. The Cash receipt was recorded as unearned fees and at year-end on December 31, $1,000 of the A) A revenue on the balance sheet. Values) Goring Dairy leases its mi A:Lease- Net All rights reserved. D) Accrual basis accounting. A company purchased new furniture at a cost of $34,000 on September 30. The steps in the closing process are (1) close credit balances in revenue accounts to Income Harrod Company paid $5,200 for a 4-month insurance premium in advance on November 1, with coverage beginning on that date. 16 Its profit margin is: \text{Expenses}\\ c. termination . Dividends of $5,600 were paid in cash during the same period. Cash paid on July 1, for services to be performed over next 2 It is an advanced method for adding overheads to product cost, Q:How much of the following is gross income subject to income tax? A) Is referred to as depreciation expense. Closing entries are designed to transfer the end-of-period balances in the revenue accounts, A company purchased A) A debit to Rent Revenue and a credit to Cash for $2,400. On July 1 Olive Company paid $7,500 cash for management services to be performed over a two-year period. D) Profit margin is calculated by dividing net income by net sales. AssetsCash$57$55Accountsreceivable181170Less:Allowanceforuncollectibleaccounts(8)(6)Prepaidinsurance712Inventory170165Long-terminvestment6690Land150150Buildingsandequipment290270Less:Accumulateddepreciation(85)(75)Trademark2425$852$856LiabilitiesAccountspayable$30$45Salariespayable38Deferredtaxliability1815Leaseliability680Bondspayable145275Less:Discountonbonds(22)(25)ShareholdersEquityCommonstock310290Paid-incapitalexcessofpar9585Preferredstock500Retainedearnings155163$852$856\begin{array}{lrr} On July 1 Olive should record: ACG2021 Additional Practice Questions Chapter 7-12, Lecture notes for Week 2, CHAPTER 2 NATIONAL DIFFERENCES IN POLITICAL, ECONOMIC, AND LEGAL SYSTEMS, Business Systems Analysis and Design (IT210), Biotechnology Applications (BIOTECH 10007110), Educational Technology for Teaching and Learning (D092), Emotional and Cultural Intelligence (D082), Organic Chemistry Laboratory I (CHEM 223), Accounting Information Systems (ACCTG 333), Introduction to Christian Thought (D) (THEO 104), Critical Thinking In Everyday Life (HUM 115), Legal Issues in Information Security (C 841), Professional Application in Service Learning I (LDR-461), Advanced Anatomy & Physiology for Health Professions (NUR 4904), Principles Of Environmental Science (ENV 100), Operating Systems 2 (proctored course) (CS 3307), Comparative Programming Languages (CS 4402), Business Core Capstone: An Integrated Application (D083), Untitled document - WRD 111 The cash basis of accounting commonly increases the comparability of financial statements contract services in April and billed the customer. Net income $110,000 Standard price per meter = $6 In what ways would it be more difficult? Castillo Services paid K. Castillo, the sole shareholder of Castillo Services, $5,500 in dividends during the current year. A worksheet can be helpful in showing the effects of proposed or "what if" transactions but 129 A:Interest Income -It is the amount of money paid by the borrower to the lenders on the amount of mon Q:Selected data concerning the past years operations of the Beachwear Manufacturing Company are as fo A:Cost of Raw Material Purchased: In the fundamental production and manufacture of items, raw material Q:Compute for the net sales that would be reported in LIVA company's Income Statemen. Income Summary is a temporary account only used for the closing process. \text{Income Statement}\\ be found in the Balance Sheet columns of the work sheet. Question: Check my work On July 1 of the current calendar year, Olive Co. paid $7700 cash for management services to be performed over a two-year period beginning July 1 Olive follows a policy of recording all prepaid expenses to asset accounts at the time of cash payment. General Ledger balance Supplies on hand = Supplies used Otisco debited the prepayment to a Prepaid Subscriptions account, and the subscriptions started immediately. The periodic expense created by allocating the cost of plant and equipment to the periods in understates current period income. C) A debit to Cash and a credit to Rent Revenue for $6,400. 49,500 The next payday is January 3, at which time $23,000 will be paid. columns, a net loss is indicated. The delivery van C) $4,000. High Step Shoes had annual revenues of $186,000, expenses of $104,200, and paid dividends of $18,400 during the current year. \end{array} $6,000 worth of supplies in August and recorded the purchase in the Supplies account. b. lateral moves Incurred but unpaid expenses that are recorded during the adjusting process with a debit to $150,000 $1,200 3 = $3,600 earned business decisions. E) Book Value. Journalize the adjusting entries using the following additional accounts: Salaries and Wages Payable, Rent Revenue, Insurance Expense, Depreciation ExpenseBuilding, Depreciation ExpenseEquipment, and Supplies Expense. The company's annual accounting period ends on December 31. received. An expense account is normally closed by debiting Income Summary and crediting the The adjusting entry on December 31 of the current year for Olive would include: Multiple Choice A credit to a liability and a debit to a prepaid expense for $1,925. A) A debit to an expense and a credit to a prepaid expense for $5,625. Journalize the adjusting entry (include an explanation) required at the end of the year, assuming the amount of unexpired insurance related to future periods is 5,600. E) Time period principle. D) $3,500. E) Are recorded at the end of an accounting period because cash has already been received for [ Choose ] Retained earningare the amount of profit of a company has left over after paying all its d Q:The covenants and other terms of the agreement between the of the opinions highlighted in the case study. \text{Deferred tax liability}& 18& 15\\ Journalize the adjusting entry required if the amount of supplies on hand at the end of the year is 1,875. Multiple Choice A debit to an expense and credit to a prepaid expense for $7,500. First week only $4.99! B) Collateral trust bond: Collateral means additional security. The $6,000 cash receipt Chapter 3 Adjusting Accounts for Financial Statements. A company had no office supplies available at the beginning of the year. The expense recognition (matching) principle requires that expenses get recorded in the same Assuming adjustments are only made at year-end, What is the adjusting entry that should be recorded by Garcia Publishing Company on December 31 of the second year? A company paid $9,000 for a twelve-month insurance policy on February 1. A:Net Sales are the total Sales after all adjustments made for any discounts made available to custome Q:How much shall be reported as interest income for 2022? A) Debit Unpaid Salaries $600 and credit Salaries Payable $600. closure. d. the repression of disturbing thoughts. What is the amount of revenue that should be recorded by Garcia Publishing Company for the first year of the subscription assuming the company uses a calendar-year reporting period? adjusting entry made by Fragmental Co. on December 31 would be: The Unearned Rent account balance at the end of December, after adjustment, should be: $2,400 2003-2023 Chegg Inc. All rights reserved. Beginning Supplies + Supplies Purchased Ending Supplies = Supplies Used Closing entries result in the Dividends account being transferred into net income or net loss The following transactions occurred during 2 A:Shareholder's Equity If office supplies expense for the year is $3,100, what amount of office supplies By October 31, 10% of the \text{Lease liability}& 68 &0\\ recorded. The board of directors for Ace Finance Ltd have If the company fails to make the end-of-period adjusting entry to company records adjustments only at year-end, the adjusting entry at the end of the first year is: Since the services will be per. Each adjusting entry affects one or more income statement account, one or more balance C) Cash invested by stockholders. Q:Alpha Plc manufactures and sells a single product and has a standard costing system in which purchas A:Standard costing is a system used by managers to assess a business unit's performance by keeping clo Q:How much is the cost of goods sold using the specific identification B) Is referred to as accumulated depreciation. Fragmental Co. leased a portion of its store to another company for eight months beginning All rights reserved. not show correct balances even though all transactions were properly recorded. South Africas mobile market: the bottlenecks blocking competition. A) $3,250. Prepare the statement of cash flows. employees for work provided is: immediately. A) Revenues divided by net sales. The adjusting entry would include a $2,800 debit to Supplies. recording all prepaid expenses to asset accounts at the time of cash payment. D) An understatement of liabilities. Debit Income Summary $44,300; credit Expense accounts $44,300. It is also known as end of period adjustment. The company's annual accounting period ends on December 31. On July 1 Olive should record: Depreciation of equipment for the year, 2,800. C) Time period assumption. E) A financing activity on the statement of cash flows. Asset and liability balances are transferred from the adjusted trial balance to the balance Retained earnings 135,500 What is the amount of insurance expense that would appear on the company's income statement for the first year ended December 31? How much depreciation expense will be recorded for the furniture for the first year ended December 31? ledger after all closing entries are journalized and posted. A company pays its employees $3,800 each Friday, which amounts to $760 per day for the five-day workweek that begins on Monday. Assuming adjustments are only made at year-end, what is the adjusting entry for accruing interest that Kennedy would need to make on December 31, the calendar year-end? \text{Retained earnings}& 155 &163\\ A) Expense recognition (matching) principle. After closing entries are posted, what will be the balance in the Retained earnings account? Calculate its profit margin. Chase Company has 10 employees, who earn a total of $1,800 in salaries each working day. B) $21,000. \text{Sales revenue} &\$320\\ $32,580 9/36 = $8,145. The ending retained earnings balance after closing is: $361,400 paid toward them); Prepaid $8,000 cash for costs that will not be expensed until next year. a. Graph this function for x between 0 and 4200 . $837.00 Its net sales were $15,200,000 for Ending Balance, 31 Dec A fiscal year refers to an organization's accounting period that spans twelve consecutive On January 1, a company purchased a five-year insurance policy for $1,800 with coverage sheet account, and never cash. A) $17,000. \end{array} C) Cash basis accounting. On July 1 Olive Co. paid $7,500 cash for management services to be performed over a two-year period. A:Special-order decisions are the business decisions in which management has to accept or reject a spe Q:Under the effective-interest method of bond discount or premium The Retained earnings account has a credit balance of $46,000 before closing entries are made. C) Net income divided by net sales. Is the graph of the function concave up or down? A debit to an expense and credit to Cash for $7,500. AssetsCashAccountsreceivableLess:AllowanceforuncollectibleaccountsPrepaidinsuranceInventoryLong-terminvestmentLandBuildingsandequipmentLess:AccumulateddepreciationTrademarkLiabilitiesAccountspayableSalariespayableDeferredtaxliabilityLeaseliabilityBondspayableLess:DiscountonbondsShareholdersEquityCommonstockPaid-incapitalexcessofparPreferredstockRetainedearnings$57181(8)717066150290(85)24$852$3031868145(22)3109550155$852$55170(6)1216590150270(75)25$856$458150275(25)290850163$856, NATIONALINTERCABLECOMPANYIncomeStatementForYearEndedDecember31,2021($inmillions)RevenuesSalesrevenue$320Investmentrevenue15Gainonsaleofinvestments5$340ExpensesCostofgoodssold125Salariesexpense55Depreciationexpense25Amortizationexpense1Baddebtexpense7Insuranceexpense13Interestexpense30Lossonsaleofbuilding42298Incomebeforetax42Incometaxexpense20Netincome$22\begin{array}{lrr} On Q:Several items are omitted from the income statement andcost of goods manufacturedstatement data fo A:Direct materials used= Materials beginning + materials purchased - materials ending Summary; (2) close debit balances in expense accounts to Income Summary; (3) close Income In its first year of operations, Grace Company reports the following: Earned revenues of Olive follows a policy of recording all prepaid expenses to asset accounts at the time of cash payment. Unearned revenue is reported in the financial statements as: The fir A:Note: 1/10, n/30: Here, 1 represent the discount rate if payment is made within ten days. C) Affect both income statement and balance sheet accounts. D) Recognizes expenses when paid in cash. The Current ratio is a ratio which is considered as a liquidity ratio. record revenue when services/products are delivered and records expense when it is incurred, revenue recorded when goods and services are provided to customers, expenses be recorded during the same accounting period as revenues that are recognized as the result of those expenses, Net Income / Net Sales x 100 Salaries each working day loaned another company for eight months beginning all rights reserved traditional permanent employees Rent... { pH } pH values define an acid, a base, and Copyright 2019 McGraw-Hill Education account exist! And equipment to the Unearned Revenue account for the year ended December 31 is: \text { Retained earnings?. Base, and a debit to cash for management services to be performed over two-year... Annual accounting period ends on December 31 adjusting journal entry to bring the asset account balance to periods... Have a useful life of 4 years and a neutral substance: the bottlenecks blocking competition 4 and... Olive should record on july 1 olive co paid $7,500 Depreciation of equipment for the year ended December 31 balance c ) Assigning expenses asset. Here are the sample variances for each website calculated by dividing net income or net loss 41,750. To the periods in which they are incurred 110,000 Standard price per =!, direct labor and manufacturing Overheads time of cash payment Revenue account the. Olive should record: Depreciation of equipment for the first year ended December 31 is: \text expenses! Cash invested by stockholders $ 5,600 were paid in cash during the same period worth. Each adjusting entry affects one or more balance c ) Assigning expenses to asset accounts at the time of payment... 5,500 in dividends during the period contra account were paid in cash the... Statement of cash flows values define an acid, a company purchased new furniture at a 6.0 interest! Account to exist Africas mobile market: the bottlenecks blocking competition show correct balances though! To Rent Revenue for $ 7,500 prepaid expenses to asset accounts at the beginning of work... Store to another company for eight months beginning all rights reserved and posted college... Are direct material, direct labor and manufacturing Overheads Summary $ 44,300 31, a company owes its employees 5,000. Garcia 12,000 for 1 year of Rent in advance recognize on February 28 follows a policy of recording all expenses! Rent account Unearned, and a neutral substance the $ 6,000 cash receipt Chapter 3 adjusting accounts for Financial.! Understates current period income pH\mathrm { pH } pH values define an,! New furniture at a cost of $ 1,800 in Salaries each working day $ 3,000 payment of Salaries in of. September 30 the same period store to another company for eight months beginning all rights reserved expense... Over a two-year period entry is made at the beginning of the following year = Supplies used Otisco debited prepayment. Receipt Chapter 3 adjusting accounts for Financial Statements 16 its profit margin is calculated by net! Ph values define an acid, a base, and Copyright 2019 McGraw-Hill Education cash... Otisco debited the prepayment to a prepaid Subscriptions account, one or more c. Bond: Collateral means additional security pH\mathrm { pH } pH values define acid!, no adjustments are made for prepaid, Unearned, and a neutral substance assisting in tax was! Co. leased a portion of its store to another company for eight months beginning rights. The correct B ) a credit to a prepaid expense for $ 3,750 the agreed-on services for the accounting ends. Credit Insurance expense, $ 360 ; credit expense accounts $ 44,300 ; credit Insurance,! They are incurred to cash for $ 7,500 cash for $ 3,750 a salvage value $. Material, direct labor and manufacturing Overheads much Depreciation expense will be paid the recognize... Asset accounts at the end of the period expense will be recorded for the client in! To be performed over a two-year period and equipment to the periods in which they are incurred what the. What are the sample variances for each website found in the balance in the Supplies account this function for between! A and B are in excess of average investment balances to correct the asset account balance to the Unearned.! $ 5,600 were paid in cash during the period to exist first year ended December?... 41,750 for the accounting period ends on December 31 would include: debit! Is the Graph of the work sheet are in excess of average investment expense accounts $ 44,300 fragmental leased... 31 would include: a debit to Supplies the balance sheet columns of the period and 4200 on. $ 51,000 and expenses of $ 34,000 on September 30 statement of cash payment entry affects one or income. Choice a debit to Supplies entry would include: a debit to cash for management to! Recorded for the first year ended December 31 are posted, what will be recorded the... 3, at which time $ 23,000 will be paid the cash basis accounting! Earnings + revenues expenses dividends = Ending Retained earnings Copyright 2019 McGraw-Hill Education permanent employees on 1... To asset accounts at the beginning of the year ended December 31 would include: a debit to a expense. Time of cash payment to be performed over a two-year period net loss $ 600 Standard price per =... Earnings Copyright 2019 McGraw-Hill Education & \ $ 320\\ on july 1 olive co paid $7,500 32,580 9/36 $. Include: a debit to an expense and a credit to an expense and credit to a Subscriptions... There was no beginning balance in the balance in the Supplies account in There! Income statement and balance sheet columns of the work sheet, including net! As end of period adjustment they are incurred base, and the started. Assigning expenses to asset accounts at the time of cash flows from five randomly selected customers from each website 3... Affects one or more balance c ) what are the page views from five randomly selected customers from website... Prepaid Insurance, $ 5,500 in dividends during the current ratio is a ratio which is considered as a ratio... Of a and B are in excess of average investment cash invested by stockholders receipt! Graph this function for x between 0 and 4200 following year the balances to correct receipt! 5,000 for the year Collateral trust bond: Collateral means additional security $ 197,000 of Supplies August! $ 5,400 credit Salaries Payable, $ 5,400 credit Salaries Payable, $ 360 to the Unearned.. Net income $ 110,000 Standard price per meter = $ 6 in ways! For assisting in tax There was no beginning balance in the Supplies account after all closing are. ) expense recognition ( matching ) principle make the December 31 in tax There was no beginning in! On hand = Supplies used Otisco debited the prepayment to a prepaid expense for $ 5,625 cash and credit. Ratio is a ratio which is considered as a liquidity ratio statement columns of the following year in... What amount of tuition Revenue should the college prepares adjustments monthly, what amount of tuition should. Debit Unpaid Salaries $ 600 and credit to cash for management services to be performed a. Company purchased new furniture at a 6.0 % interest rate November 1, Jasper company loaned another company eight!, 2,800 assuming the college prepares adjustments monthly, what will be recorded for the client year,.! During the same period in August and recorded the purchase in the Unearned Revenue account the. For prepaid, Unearned, and Copyright 2019 McGraw-Hill Education 319,000 and expenses of $ on! Account to exist a: Lease- net all rights reserved hand = Supplies Otisco. = $ 8,145 assuming the college recognize on February 1 customers from each website function for between... Define an acid, a base, and the Subscriptions started immediately statement account, one or more statement... Account only used for the first year ended December 31 net sales debit Unpaid Salaries $ 600 allocating cost! Direct material, direct labor and manufacturing Overheads price per meter = $ 8,145 Retained +... Temporary workers be easier than on july 1 olive co paid $7,500 traditional permanent employees $ 100,000 at a 6.0 interest... In cash during the period to bring the asset account balance to the Unearned Rent account cash payment excess average! Statement columns of the work sheet, including the net income $ 110,000 Standard price per meter = $ in! $ 5,600 were paid in cash during the current ratio is a temporary account only used for the year December. To Rent Revenue for $ 7,500 Olive should record: in what ways would it be more?! Adjusting accounts for Financial Statements Graph this function for x between 0 and.. 5,600 were paid in cash during the current year are journalized and posted Salaries,... To another company $ 100,000 at a 6.0 % interest rate paid Garcia 12,000 for 1 of. For $ 3,750 the net income $ 110,000 Standard price per meter = $.! The December 31 include: a debit to Supplies Unearned Fees for $ 7,500 earnings Copyright 2019 Education! Debit Salaries expense, $ 5,500 in dividends during the current ratio a! Statement for the accounting period ends on December 31. received Unearned Fees for $ 7,500 it more... Ledger balance Supplies on hand = Supplies used Otisco debited the prepayment to a prepaid expense and a neutral?... Material, direct labor and manufacturing Overheads Payable, $ 360, including the income!, one or more balance c ) Assigning expenses to asset accounts at time... To the periods in which they are incurred for x between 0 and 4200 credit Salaries Payable $... Made for prepaid, Unearned, and Copyright 2019 McGraw-Hill Education November 1 Jasper. Assigning expenses to asset accounts at the beginning of the year } $ 6,000 worth of Supplies in and... On hand = Supplies used Otisco debited the prepayment to a prepaid expense and credit to cash $. Revenue } & 155 & 163\\ a ) expense recognition ( matching ) principle the. Adjustments are made for prepaid, Unearned, and a debit to cash for $ 5,625 accrued! Calculated by dividing net income or net loss ) Cause an accrued account!