Adjusting Journal Entries Flashcards Preview

Audit Simulation > Adjusting Journal Entries > Flashcards

Flashcards in Adjusting Journal Entries Deck (5):
1

At the end of year 2, a major customer filed for bankruptcy.

DR: Operating expenses
CR: Allowance for doubtful accounts

2

In the last week of year 2, the company recorded revenue for services rendered to some clients in year 3.

DR: Revenue
CR: Accounts Receivables

3

Employee overtime pay for hours worked before year-end, but paid in the following year, were not recorded in year 2.

DR: Operating Expense
CR: Accrued Liabilities

4

During year 2, a former client sued the company for inappropriate work. Legal counsel has advised that it is "reasonably possible" that the company will be assessed damages. An amount can be estimated.

Disclosure but No Entry

5

The bank's confirmation reply regarding the company's line of credit indicated that the December, year 2, interest was unpaid at year-end. Accruals for monthly interest expense have been made for 11 months in year 2 by the company.

DR: Interest Expense
CR: Accrued Liabilities