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Financial & Managerial Accounting
Found in: Page 142

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Short Answer

Adjusting entries affect at least one balance sheet account and at least one income statement account.

For the entries below, identify the account to be debited and the account to be credited from the following

accounts: Cash; Accounts Receivable; Prepaid Insurance; Equipment; Accumulated

Depreciation; Wages Payable; Unearned Revenue; Revenue; Wages Expense; Insurance Expense;

Depreciation Expense. Indicate which of the accounts is the income statement account and which is

the balance sheet account.

a. Entry to record revenue earned that was previously received as cash in advance.

b. Entry to record wage expenses incurred but not yet paid (nor recorded).

c. Entry to record revenue earned but not yet billed (nor recorded).

d. Entry to record expiration of prepaid insurance.

e. Entry to record annual depreciation expense.

Answer:

The depreciation expense account is debited and accumulated depreciation is credited.

See the step by step solution

Step by Step Solution

Step 1: Definition of depreciation

The fall in the value of the machinery due to constant use is known as depreciation.

Step 2: Adjusting entry for depreciation expense

Journal entry

Date

Particulars

Debit

Credit

Depreciation Expense

$

Accumulated Depreciation

$

(Adjustment entry)

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