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CHAPTER 3
Adjusting the Accounts
ASSIGNMENT CLASSIFICATION TABLE
Learning Objectives
Questions
Brief
Exercises
Do It!
Exercises
A
Problems
B
Problems
*1. Explain the time period
assumption.
1
1
1
*2. Explain the accrual basis
of accounting.
2, 3, 4, 5
1
2, 3, 10
*3. Explain the reasons for
adjusting entries and
identify the major types
of adjusting entries.
6, 7, 8, 18
1, 2, 8
4, 6, 11
*4. Prepare adjusting
entries for deferrals.
8, 9, 10, 11,
12, 13, 18,
19, 20, 23
2, 3, 4,
5, 6,8
2
4, 5, 6, 7,
8, 9, 10,
11, 12,
13, 15
1A, 2A, 3A,
4A, 5A, 6A
1B, 2B, 3B,
4B, 5B
*5. Prepare adjusting
entries for accruals.
8, 14, 15, 16,
17, 18,
19, 20
2, 7, 8
3
4, 5, 6, 7,
8, 9, 10,
11, 12,
13, 15
1A, 2A, 3A,
4A, 5A, 6A
1B, 2B, 3B,
4B, 5B
*6. Describe the nature and
purpose of an adjusted
trial balance.
21
9, 10
4
10, 11, 12,
13, 14
1A, 2A, 3A,
5A, 6A
1B, 2B, 3B,
5B
*7. Prepare adjusting
entries for the alternative
treatment of deferrals.
22
11
16, 17
6A
*8. Discuss financial
reporting concepts.
23, 24, 25
26, 27, 28
12, 13
14, 15
18, 19, 20,
21, 22
chapter.
ASSIGNMENT CHARACTERISTICS TABLE
Problem
Number
Description
Difficulty
Level
Time
Allotted (min.)
1A
Prepare adjusting entries, post to ledger accounts,
and prepare an adjusted trial balance.
Simple
40–50
2A
Prepare adjusting entries, post, and prepare adjusted
trial balance, and financial statements.
Simple
50–60
3A
Prepare adjusting entries and financial statements.
Moderate
40–50
4A
Prepare adjusting entries.
Moderate
30–40
5A
Journalize transactions and follow through accounting
cycle to preparation of financial statements.
Moderate
60–70
*6A*
Prepare adjusting entries, adjusted trial balance,
and financial statements using appendix.
Moderate
40–50
1B
Prepare adjusting entries, post to ledger accounts,
and prepare an adjusted trial balance.
Simple
40–50
2B
Prepare adjusting entries, post, and prepare adjusted
trial balance, and financial statements.
Simple
50–60
3B
Prepare adjusting entries and financial statements.
Moderate
40–50
4B
Prepare adjusting entries.
Moderate
30–40
5B
Journalize transactions and follow through accounting
cycle to preparation of financial statements.
Moderate
60–70
WEYGANDT FINANCIAL ACCOUNTING 9E
CHAPTER 3
ADJUSTING THE ACCOUNTS
Number
LO
BT
Difficulty
Time (min.)
BE1
3
C
Simple
4–6
BE2
3–5
AN
Moderate
6–8
BE3
4
AN
Simple
3–5
BE4
4
AN
Simple
3–5
BE5
4
AN
Simple
2–4
BE6
4
AN
Simple
2–4
BE7
5
AN
Simple
4–6
BE8
3–5
AN
Simple
5–7
BE9
6
AP
Simple
4–6
BE10
6
AP
Simple
2–4
BE11*
7
AN
Moderate
3–5
BE12*
8
C
Simple
3–5
BE13*
8
C
Simple
2–4
BE14*
8
C
Simple
2–4
BE15*
8
C
Simple
1–2
DI1
1, 2
K
Simple
2–4
DI2
4
AN
Simple
6–8
DI3
5
AN
Simple
4–6
DI4
6
AN
Moderate
20–30
EX1
1
C
Simple
3–5
EX2
2
E
Moderate
10–15
EX3
2
AP
Simple
6–8
EX4
3–5
AN
Simple
5–6
EX5
4, 5
AN
Moderate
10–15
EX6
3–5
AN
Moderate
10–12
EX7
4, 5
AN
Moderate
8–10
EX8
4, 5
AN
Moderate
8–10
EX9
4, 5
AN
Simple
8–10
EX10
2, 4–6
AN
Moderate
8–10
EX11
3–6
AN
Moderate
12–15
EX12
4–6
AN
Moderate
8–10
EX13
4–6
AN
Simple
8–10
EX14
6
AP
Simple
12–15
ADJUSTING THE ACCOUNTS (Continued)
Number
LO
BT
Difficulty
Time (min.)
EX15
4, 5
AN, S
Moderate
8–10
EX16*
7
AN
Moderate
6–8
EX17*
7
AN
Moderate
10–12
EX18*
8
C
Simple
3–5
EX19*
8
C
Simple
3–5
EX20*
8
C
Simple
6–8
EX21*
8
AN
Simple
10–20
EX22*
8
AN
Simple
10–20
P1A
4–6
AN
Simple
40–50
P2A
4–6
AN
Simple
50–60
P3A
4–6
AN
Moderate
40–50
P4A
4, 5
AN
Moderate
30–40
P5A
4–6
AN
Moderate
60–70
P6A
4–7
AN
Moderate
40–50
P1B
4–6
AN
Simple
40–50
P2B
4–6
AN
Simple
50–60
P3B
4–6
AN
Moderate
40–50
P4B
4, 5
AN
Moderate
30–40
P5B
4–6
AN
Moderate
60–70
BYP1
4, 5, 6
AN
Simple
10–15
BYP2
—
AN
Simple
10–15
BYP3
—
AN
Simple
10–15
BYP4
—
AN
Simple
10–15
BYP5
—
AN
Moderate
15–20
BYP6
2–6
S
Moderate
15–20
BYP7
3–6
C
Simple
10–15
BYP8
3–6
E
Moderate
10–15
BYP9
—
E
Moderate
10–15
BYP10
—
E
Moderate
10–15
BYP11
—
K
Simple
10–15
BLOOM’S TAXONOMY TABLE
Copyright © 2014 John Wiley & Sons, Inc. Weygandt, Financial Accounting, 9/e, Solutions Manual (For Instructor Use Only) 3-5
Correlation Chart between Bloom’s Taxonomy, Learning Objectives and End-of-Chapter Exercises and Problems
Learning Objective
Knowledge
Comprehension
Application
Analysis
Synthesis
Evaluation
*2. Explain the accrual basis of accounting.
DI3-1
Q3-2
Q3-3
Q3-4
Q3-5
E3-3
E3-10
E3-2
*3. Explain the reasons for adjusting entries and
identify the major types of adjusting entries.
Q3-6
Q3-7
Q3-8
BE3-1
Q3-18
BE3-2
BE3-8
E3-4
E3-6
E3-11
*4. Prepare adjusting entries for deferrals.
Q3-8
Q3-9
Q3-10
Q3-11
Q3-12
Q3-13
Q3-19
Q3-20
Q3-18
BE3-2
BE3-3
BE3-4
BE3-5
BE3-6
BE3-8
DI3-2
E3-5
E3-6
E3-7
E3-8
E3-9
E3-10
E3-11
E3-12
E3-13
E3-15
P3-1A
P3-2A
P3-3A
P3-4A
P3-5A
P3-6A
P3-1B
P3-2B
P3-3B
P3-4B
P3-5B
E3-15
*5. Prepare adjusting entries for accruals.
Q3-8
Q3-14
Q3-15
Q3-19
Q3-20
Q3-17
Q3-16
Q3-18
BE3-2
BE3-7
BE3-8
DI3-3
E3-4
E3-5
E3-6
E3-7
E3-8
E3-9
E3-10
E3-11
E3-12
E3-13
E3-15
P3-1A
P3-2A
P3-3A
P3-4A
P3-5A
P3-6A
P3-1B
P3-2B
P3-3B
P3-4B
P3-5B
E3-15
*6. Describe the nature and purpose of an
adjusted trial balance.
Q3-21
BE3-9
BE3-10
E3-14
DI3-4
E3-10
E3-11
E3-12
E3-13
P3-1A
P3-2A
P3-3A
P3-5A
P3-6A
P3-1B
P3-2B
P3-3B
P3-5B
*7. Prepare adjusting entries for the alternative
treatment of deferrals.
Q3-22
BE3-11
E3-16
E3-17
P3-6A
*8. Discuss financial reporting concepts
Q3-23
BE3-12 E3-20
BE3-13 Q3-24
BE3-14 Q3-25
BE3-15 Q3-26
E3-18 Q3-27
E3-19 Q3-28
E3-21
E3-22
Broadening Your Perspective
FASB
Activity
Communication
Financial Reporting
Comparative Analysis
Real-World Focus
Decision Making
Across the
Organization
All About You
Ethics Case
Considering
p, p & p
ANSWERS TO QUESTIONS
1. (a) Under the time period assumption, an accountant is required to determine the relevance of
each business transaction to specific accounting periods.
2. The two generally accepted accounting principles that relate to adjusting the accounts are:
period in which services are performed.
The expense recognition principle, which states that efforts (expenses) be matched with
accomplishments (revenues).
3. The law firm should recognize the revenue in April. The revenue recognition principle states that
4. Information presented on an accrual basis is more useful than on a cash basis because it reveals
meaningful.
5. Expenses of $4,500 should be deducted from the revenues in April. Under the expense
7. A trial balance may not contain up-to-date information for financial statements because:
transactions.
(3) Some items may be unrecorded because the transaction data are not yet known.
8. The two categories of adjusting entries are deferrals and accruals. Deferrals consist of prepaid
9. In the adjusting entry for a prepaid expense, an expense is debited and an asset is credited.
10. No. Depreciation is the process of allocating the cost of an asset to expense over its useful life in
11. Depreciation expense is an expense account whose normal balance is a debit. This account
12. Equipment ............................................................................................... $18,000
Less: Accumulated Depreciation—Equipment ........................................ 6,000 $12,000
Questions Chapter 3 (Continued)
*13. In the adjusting entry for an unearned revenue, a liability is debited and a revenue is credited.
*17. The entry is:
Jan. 9 Salaries and Wages Payable ....................................................... 2,000
*18. (a) Accrued revenues. (d) Accrued expenses or prepaid expenses.
*19. (a) Salaries and Wages Payable. (d) Supplies Expense.
account.
*21. Financial statements can be prepared from an adjusted trial balance because the balances of
all accounts have been adjusted to show the effects of all financial events that have occurred
during the accounting period.
The adjusting entry is:
Assets (Supplies) ..................................................................................... XX
Expenses (Supplies Expense) ............................................................ XX
For Rent Revenue (unearned revenues): revenues are overstated and liabilities are understated.
The adjusting entry is:
Revenues (Rent Revenue) ....................................................................... XX
Liabilities (Unearned Rent Revenue) .................................................. XX
understandability.
*24. Gross is correct. Consistency means using the same accounting principles and accounting
methods from period to period within a company. Without consistency in the application of
accounting principles, it is difficult to determine whether a company is better off, worse off, or
the same from period to period.
Questions Chapter 3 (Continued)
*25. Comparability results when different companies use the same accounting principles.
Consistency means using the same accounting principles and methods from year to year within
the same company.
*27. Accounting relies primarily on two measurement principles. Fair value is sometimes used when
market price information is readily available. However, in many situations reliable market price
information is not available. In these instances, accounting relies on cost as its basis.
SOLUTIONS TO BRIEF EXERCISES
BRIEF EXERCISE 3-1
(b) Depreciation Expense—to account for the depreciation that has occurred
on the asset during the period.
(c) Unearned Service Revenue—to record revenue recognized during the
period for services performed.
payable.
BRIEF EXERCISE 3-2
Item
(a)
Type of Adjustment
(b)
Account Balances before Adjustment
1.
Prepaid Expenses
Assets Overstated
Expenses Understated
2.
Accrued Revenues
Assets Understated
Revenues Understated
3.
Accrued Expenses
Expenses Understated
Liabilities Understated
4.
Unearned Revenues
Liabilities Overstated
Revenues Understated
BRIEF EXERCISE 3-3
Dec. 31 Supplies Expense ................................................ 4,200
Supplies
Supplies Expense
6,700
12/31 4,200
12/31 4,200
12/31 Bal. 2,500
BRIEF EXERCISE 3-4
Dec. 31 Depreciation Expense .......................................... 4,000
Accumulated Depreciation—
Depreciation Expense
Accum. Depreciation—Equipment
12/31 4,000
12/31 4,000
Balance Sheet:
Equipment ........................................................... $30,000
BRIEF EXERCISE 3-5
July 1 Prepaid Insurance ........................................... 14,400
Prepaid Insurance
Insurance Expense
7/1 14,400
12/31 2,400
12/31 2,400
12/31 Bal. 12,000
BRIEF EXERCISE 3-6
July 1 Cash ................................................................. 14,400
Unearned Service Revenue
Service Revenue
12/31 2,400
7/1 14,400
12/31 2,400
12/31 Bal. 12,000
