What is an accrued expense? Provide an example.
Accrued expense is the expense that is incurred but remains unpaid as of date. Example: Unpaid wages of the employees.
Expense refers to the cost of availing of the services or goods. It is incurred in normal business operations.
Accrued expenses are shown in the income statement and are also reported as a current liability on the balance sheet.
Question :Birch Park Senior Center has a weekly payroll of $12,500. December 31 falls on Wednesday, and Birch Park Senior Center will pay its employees the following Monday (January 5) for the previous full week. Assume Birch Park Senior Center has a five-day workweek and has an unadjusted balance in Salaries Expense of $620,000. Requirements 1. Record the adjusting entry for accrued salaries on December 31. 2. Post the adjusting entry to the accounts involved, and show their balances after adjustments. 3. Record the journal entry for payment of salaries made on January 5
Question: Match the accounting terminology to the definitions. 3. Time period concept 4. Revenue recognition principle 5. Matching principle a. Requires companies to record revenue when it satisfies each performance obligation. b. Assumes that a business’s activities can be sliced into small time segments and that financial statements can be prepared for specific periods. c. Guides accounting for expenses, ensures that all expenses are recorded when they are incurred during the period, and matches those expenses against the revenues of the period
Question :The following data at July 31, 2018, are given for RCO: a. Depreciation, $600. b. Prepaid rent expires, $200. c. Interest expense accrued, $700. d. Employee salaries owed for Monday through Thursday of a five-day workweek; weekly payroll, $8,000. Unearned revenue earned, $1,000. f. Office supplies used, $150. Requirements 1. Journalize the adjusting entries needed on July 31, 2018. 2. Suppose the adjustments made in Requirement 1 were not made. Compute the overall overstatement or understatement of net income as a result of the omission of these adjustments
Question : The accounting records of Mackay Architects include the following selected, unadjusted balances at March 31: Accounts Receivable, $1,500; Office Supplies, $700; Prepaid Rent, $2,240; Equipment, $8,000; Accumulated Depreciation—Equipment, $0; Salaries Payable, $0; Unearned Revenue, $900; Service Revenue, $4,100; Salaries Expense, $800; Supplies Expense, $0; Rent Expense, $0; Depreciation Expense—Equipment, $0. The data developed for the March 31 adjusting entries are as follows: a. Service revenue accrued, $700. b. Unearned revenue that has been earned, $100. c. Office Supplies on hand, $300. d. Salaries owed to employees, $200. e. One month of prepaid rent has expired, $560. f. Depreciation on equipment, $120. Requirements 1. Open a T-account for each account using the unadjusted balances given. 2. Journalize the adjusting entries using the letter and March 31 date in the date column. 3. Post the adjustments to the T-accounts, entering each adjustment by letter. Show each account’s adjusted balance.
On October 1, Orlando Gold Exchange paid cash of $57,600 for computers that are expected to remain useful for three years. At the end of three years, the value of the computers is expected to be zero. Requirements 1. Calculate the amount of depreciation for the month of October using the straightline depreciation method. 2. Record the adjusting entry for depreciation on October 31. 3. Post the purchase of October 1 and the depreciation on October 31 to T-accounts for the following accounts: Computer Equipment, Accumulated Depreciation— Computer Equipment, and Depreciation Expense—Computer Equipment. Show their balances at October 31. 4. What is the computer equipment’s book value on October 31?
94% of StudySmarter users get better grades.Sign up for free