At the beginning of the year Kayla's Design had a balance in Supplies of $1,200. During the year, additional supplies of $4,000 were purchased. At the end of the year, a physical count was made showing only $800 of supplies on hand. What adjusting entry is required?
Debit Supplies Expense $4,800; credit Supplies $4,800.
Debit Supplies Expense $3,600; credit Supplies $3,600.
Debit Supplies Expense $4,400; credit Supplies $4,400.
Debit Supplies Expense $5,200; credit Supplies $5,200.
Debit Supplies $5,200; credit Supplies Expense $5,200.

(I would think you would need to debit supplies of the total amound 5200 and credit supplies expense of 5200)

A company borrowed $5,000 at 5% interest. At the end of the year the company needed to record 10 days of interest owed. How much interest has accrued?
$6.94
$20.83
$25.00
$250.00
$2,500.00 (ANSWER)

Three months rent totaling $6,000 was collected and recorded on November 1. The adjusting entry required includes:
A debit to rent expense $2,000.
A debit to rent expense $4,000.
A credit to rent revenue of $2,000.
A credit to unearned rent of $4,000.
A debit to unearned rent of $4,000.
(This I don't understand at all)

Allocating the cost of an asset evenly over its useful life is:
Straight-line depreciation
Book value
Net depreciation
Contra account
Plant asset
(the definition of this is depreciation... I'm assuming net depreciation but cannot find the right term)

Equipment purchased on November 1, 2010 for $8,000 has an estimated trade-in value of $2,000 and a 5-year useful life. What is the book value at the end of Year 3, assuming a calendar fiscal year:
$200
$1,200
$2,600
$3,600
$5,400 (ANSWER) I guessed it right however I couldn't work it out can you explain how this is correct.

if anyone could help explain these that would be great!! Thanks

In preparing a work sheet, if an adjusted trial balance amount is mistakenly sorted to the wrong work sheet column, then the Balance Sheet columns will balance on completing the work sheet but with the wrong net income, if the amount sorted in error is:
An expense amount placed in the Balance Sheet Credit column.
A revenue amount placed in the Balance Sheet Debit column.
A liability amount placed in the Income Statement Credit column.
An asset amount placed in the Balance Sheet Credit column.
A liability amount placed in the Balance Sheet Debit column.
Check my work

I chose A but came up wrong man this stuff is confusing!?

1. You have an account balance of $5,200 but an actual balance of $800 so you have to do an adjusting entry for the difference between the two amounts so that your account balance will equal your actual balance. Your debit will be to Supplies Expense for 4,400 and credit Supplies for 4,400

2. You have to calculate 10 days of insurance owed. So the formula is:
Interest = Principal * Rate * Time.
$5,000 * 5% * 10/360 = your answer.

3. You received rent for 3 months of rent on Nov1 so you have to do an adjusting entry for 2 months of rent (Nov and Dec). The Original entry would have been a Debit to Cash for the amount received and a Credit to Unearned Revenue for the amount received. You first have to calculate 2 months of rent. So $6,000 times 2/3 equals $4,000
Your adjusting entry will be a Debit Unearned Revenue for $4,000 and a Credit to Rent Revenue for $4,000

4. The definition is for Straight-Line Depreciation.

5. First you have to calculate the depreciation for one year. So take your cost of $8,000 minus your salvage value of $2,000 to get your depreciable base of $6,000. Now take your depreciable base of $6,000 divided by the useful life of 5 years to get your depreciation of $1,200 per year. Now to calculate the total amount of depreciation you purchased the equipment on Nov 1 so you are dealing with a partial year of 2 months (Nov and Dec). The problem is telling you for year 3 so you have to calculate 2 full years of depreciation and for the third year you have to calculate 2 months. So for two years of depreciation you take your $1,200 depreciation per year times 2 years to get $2,400. Now for the partial year you take the $1,200 depreciation per year times 2 months divided by 12 months to get $200 worth of depreciation. Now add your $2,400 and 200 to get your total depreciation of $2,600. Now take your cost of $8,000 minus the depreciation of $2,600 to get the book value at the end of year 3 of $5,400.

Thank you so much I'm working on my next assignment and have a few more I'm glad you're here to helps its been over a week of emails to my professor with now response this course is killing me.

The answer is a Liability being a credit on the Income Statement. In this situation your net income will be overstated, which means that net income is more than it should be and will be a debit. Also your balance sheet credit column will be understated, meaning less than it should be. Net Income will flow through to the balance sheet as a credit, so the balance sheet will balance with net income added. This is because net income is overstated by a certain amount and the balance sheet will be understated by the same amount, so this causes the error to cancel out.

The asset amount and the other liability amount errors do not affect the income statement at all, so they are not correct.

The expense account error would cause the balance sheet credit column to increase, not cancel out the error.

The Revenue account error will not be correct because on the income sheet net income is arrived from revenues minus expenses, and by placing revenues on the balance sheet your amounts will not balance out.

Also by trial and error you can determine the correct answer. Use the attached Worksheet and make the errors and you can see the outcomes of the errors.

In your second post the problem is to see how you understand the ways debits and credits on a worksheet flow from one statement i.e. the income statement flows through to the other statement i.e. the balance sheet. On the income statement revenues are credits and expenses are debits. Your debits and credits are not equal, so the difference normally will be a debit to net income. Net Income will flow through to the balance sheet as a credit because your balance sheet will not be in balance. In fact on the balance sheet your debits will normally be more than your credits so you will add net income to the credit column, which will equal the amount of difference between your debits and credits. After net income is added to the balance sheet your balance sheet should be in balance.

Also this problem is to see how well you understand how an error in one statement will affect the other statement. All errors in revenues or expenses will affect net income in some way, which in turn will affect the balance sheet in some way because net income from the income statement flows through to the balance sheet and is added to retained earnings, which is an equity account on the actual balance sheet.

Thank you greatly!! You explain it so much better than my book really appreciate it!

The Unadjusted Trial Balance columns of a work sheet total $84,000. The Adjustments columns contain entries for the following:
1. Office supplies used during the period, $1,200.
2. Expiration of prepaid rent, $700.
3. Accrued salaries expense, $500.
4. Depreciation expense, $800.
5. Accrued service fees receivable, $400.
The Adjusted Trial Balance columns total is:
$80,400.
$84,000.
$85,700.
$85,900.
$87,600. (My Answer which is wrong)

J. Awn, the proprietor of Awn Services, withdrew $8,700 from the business during the current year. The entry to close the withdrawals account at the end of the year, is:

J Awn Withd 8700
Cash 8700

b. J Awn Capital 8700
J Awn Withd 8700 (My Answer)

C. J Awn withd 8700
J Awn Capital 8700

D. J Awn Capital 8700
Salary Expense 8700

E Income Summary 8700
J Awn Capital 8700

A company had revenues of $75,000 and expenses of $62,000 for the accounting period. Which of the following entries could not be a closing entry?

Income summary 13000
Owner Cap. 13000

Income Summary 75000 ( My Answer)
Revenues 75000

Revenues 75000
Income summary 75000

Income Summary 62000
Expenses 62000

If you could check/ explain if I got them wrong would be great!

After the adjustments are made the adjusted trial balance will be affected:
1. No change because an account with a debit balance will be decreased and an account with a debit balance will be increased.
2. No change because an account with a debit balance will be decreased and an account with a debit balance will be increased.
3. Your debits and credits will increase by the listed amount because an account with a debit balance will be increased and an account with a credit balance will be increased.
4. Debits and Credits will be increased by the amount listed because an account with a debit balance will be increased and an account with a credit balance will be increased.
5. Debits and Credits will be increased because an account with a debit balance will be increased and an account with a credit balance will be increased.
The net affect is that debits and credits will be increased by $1,700 for a total of $85,700

You are correct in the closing entry for withdrawals.

You are correct in the income summary closing.