Adjusting the Accounts

Solution

A trial balance not contain up-to-date and complete financial information because
  1. Some events are not recorded daily because it is not efficient to do so. Examples are the use of supplies and the earning of wages by employees.
  2. Some costs are not recorded during the accounting period because these costs expire with the passage of time rather than as a result of recurring daily transactions. Examples are charges related to the use of buildings and equipment, rent, and insurance.
  3. Some items may be unrecorded. An example is a utility service bill that will not be received until the next accounting period.
The company analyzes each account in the trial balance to determine whether it is complete and up-to-date for financial statement purpose

Problems: Adjusting the Accounts

Problem-1: Adjusting the Accounts

Logan Krause started her own consulting firm, Krause Consulting, on May 1, 2019. The trial balance at May 31 is as follows. Krause ConsultingTrial BalanceMay 31, 2019 In addition to...

Problem-2: Adjusting the Accounts

Mac's Motel opened for business on May 1, 2019. Its trial balance before adjustment on May 31 is as follows. MAC'S MOTELTrial BalanceMay 31, 2019 In addition to those accounts...

Problem-3: Adjusting the Accounts

Alena Co. was organized on July 1, 2019. quarterly financial statements are prepared. The unadjusted and adjusted trial balances as of September 30 are shown bellow ALENA CO.Trial BalanceSeptember 30,...

Problem-4: Adjusting the Accounts

A review of the ledger of Remina Company at December 31, 2019, produces the following data pertaining to the preparation of annual adjusting entries.

Problem-5: Adjusting the Accounts

On Nobember 1, 2019, the account balances of Hamm Equipment Repair were as follows

Problem-6: Adjusting the Accounts

Johnson Graphics Company was organized on January 1, 2019, by Cameron Johnson. At the end of the first 6 months of operations, the trial balance contained the accounts shown as...

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