Title: Question 1
QA_Ori:
The cash basis of accounting reports revenues when cash is received while the
Title: Question 2
QA_Ori:
The accrual basis of accounting generally provides a better indication of company
Title: Question 3
QA_Ori:
Title: Question 4
QA_Ori:
Title: Question 5
QA_Ori:
Long-term tangible plant assets such as equipment, buildings, and machinery
Title: Question 6
QA_Ori:
The Accumulated Depreciation contra asset account is used for depreciation.
Title: Question 7
QA_Ori:
Unearned revenue refers to cash received in advance of providing products
Title: Question 8
QA_Ori:
Accrued revenue is revenue that is earned but is not yet received in cash
(and/or other assets) and the customer has not been billed prior to the end of
Title: Question 9
QA_Ori:
If prepaid expenses are initially recorded with debits to expense accounts,
Title: Question 10
QA_Ori:
For Polaris, all of the accounts under the category of Property and Equipment
(except for Land), require adjusting entries. The expense related to the
Title: Question 11
QA_Ori:
Arctic Cat reports $39.2 million for property and equipment. For its adjusting
Title: Question 12
QA_Ori:
Title: Quick Study 3-1
QA_Ori:
a
To record 6-month insurance coverage expired.
b
To record supplies used during the year.
Title: Quick Study 3-2
QA_Ori:
a. Depreciation Expense—Equipment
3,60
0
b. No depreciation adjustments are made for land as it is expected to last
indefinitely.
Title: Quick Study 3-3
QA_Ori:
a. PE Prepaid expenses
Title: Quick Study 3-4
QA_Ori:
Salaries Expense 400
Salaries Payable 400
Title: Quick Study 3-5
QA_Ori:
a. Unearned Revenue 7,500
Title: Quick Study 3-6
QA_Ori:
Cash Accounting
Revenues (cash receipts) $37,00
0
Title: Quick Study 3-7
QA_Ori:
Accounts Debited and Credited Financial Statement
a. Debit Unearned Revenue Balance Sheet
Credit Revenue Earned Income Statement
e. Debit Depreciation Expense Income Statement
Credit Accumulated Depreciation Balance Sheet
Title: Quick Study 3-8
QA_Ori:
Adjusting entry Debit Credit
1. Accrue salaries expense e c
cash will be received the following period
Title: Quick Study 3-9
QA_Ori:
The answer is b.
Explanation
The debit balance in Prepaid Insurance was reduced by $400, implying a $400
Title: Quick Study 3-10
QA_Ori:
The answer is 2.
Explanation:
Insurance premium error:
Understates expenses (and overstates assets) by……………. $3,200
Accrued salaries error:
Understates expenses (and understates liabilities) by……….. 2,000
Combination of errors:
Title: Quick Study 3-11
QA_Ori:
Interpretation: For each dollar that the company records as revenue, it earns
Title: Quick Study 3-12A
QA_Ori:
Title: Quick Study 3-13
QA_Ori:
Title: Quick Study 3-14
QA_Ori:
a. Step 1: Prepaid Insurance equals $4,700
Insurance Expense………………………………………………….. 3,800
Prepaid Insurance……………………………………………….. 3,800
b. Step 1: Prepaid Insurance equals $5,890
Step 2: Prepaid Insurance should equal $4,850 (the unexpired part)*
Step 3: Adjusting entry to get from Step 1 to Step 2
Insurance Expense………………………………………………….. 1,040
Prepaid Insurance……………………………………………….. 1,040
To record insurance coverage that expired
c. Step 1: Prepaid Rent equals $24,000
Step 2: Prepaid Rent should equal $20,000 (the unexpired part)*
Step 3: Adjusting entry to get from Step 1 to Step 2
Rent Expense…………………………………………………………. 4,000
Title: Quick Study 3-15
QA_Ori:
a. Step 1: Supplies equal $300
b. Step 1: Supplies equal $800
c. Step 1: Supplies equal $4,000
Step 2: Supplies should equal $2,660 (what’s left); & $9,400 purchased *
Step 3: Adjusting entry to get from Step 1 to Step 2
Title: Quick Study 3-16
QA_Ori:
a. Step 1: Accumulated Depreciation equals $13,500
b. Step 1: Accumulated Depreciation equals $0
Step 2: Accumulated Depreciation should equal $8,800; adding current period
depreciation of $8,800*
Step 3: Adjusting entry to get from Step 1 to Step 2
c. Step 1: Accumulated Depreciation equals $0
Step 2: Accumulated Depreciation should equal $4,000; adding current period
depreciation of $4,000*
Step 3: Adjusting entry to get from Step 1 to Step 2
Title: Quick Study 3-17
QA_Ori:
a. Step 1: Unearned Rent Revenue equals $6,000
b. Step 1: Unearned Services Revenue equals $300
Unearned Services Revenue……………………………………. 225
c. Step 1: Unearned Rent Revenue equals $24,000
Unearned Rent Revenue………………………………………….. 16,000
Rent Revenue…………………………………………………….. 16,000