FDNACCT 07 · Adjusting Entries
Conventions
Amounts are Philippine pesos (₱). Enter numeric answers without a currency symbol; commas are optional. Use accrual accounting, periodic inventory, prepaid expenses under the asset method, unearned revenue under the liability method, straight-line depreciation, and the allowance method unless a question states otherwise. Interest uses a 360-day year or months/12. Follow the course cash-flow convention: interest/dividends received are investing, interest/dividends paid are financing. Each Practice Lab table has one highlighted blank. Questions are independent; use only the facts given in that question.
Questions
01Year-end repair expense of ₱5,000 is incurred, unpaid, and unrecorded. Which adjustment applies?
- Dr Repair expense; Cr Repair payable
- Dr Cash; Cr Revenue
- Dr Prepaid repair; Cr Expense
- Dr Payable; Cr Capital
02Rent of ₱10,000 is earned, uncollected, and unrecorded. Which account is debited in the adjustment?
- Rent expense
- Unearned rent
- Rent receivable
- Cash
03What commission was earned during November?
Problem
All amounts are Philippine pesos (₱). During November, Agrias has 750 consigned units at the start and receives 3,000 more units. A November 30 count finds 400 unsold units. Commission is 8 per unit sold, and none of the November commission has been collected.
- ₱26,800
- ₱30,000
- ₱24,000
- ₱3,350
04What insurance expense is recognized for December?
Problem
All amounts are Philippine pesos (₱). On December 1, Harmon pays 27,000 for three months of evenly provided insurance coverage. The payment was debited to Prepaid insurance. The reporting date is December 31; no insurance expense has yet been recorded.
- ₱27,000
- ₱18,000
- ₱9,000
- ₱3,000
05What supplies expense is recognized at December 31?
Problem
All amounts are Philippine pesos (₱). Crown has supplies costing 7,500 available before adjustment. At December 31, a physical count finds 3,000 unused. The purchases were recorded as an asset; no supplies expense has yet been recognized.
- ₱3,000
- ₱4,500
- ₱7,500
- ₱10,500
06What subscription revenue has been earned?
Problem
All amounts are Philippine pesos (₱). A company receives 100,000 for subscriptions and initially credits all of it to Unearned subscription revenue. At year-end, 30% of the subscriptions remain unearned; no revenue adjustment has yet been posted.
- ₱30,000
- ₱70,000
- ₱100,000
- ₱130,000
07What ticket revenue has been earned?
Problem
All amounts are Philippine pesos (₱). A company sells 5,000 tickets at 300 each and credits all receipts to Unearned ticket fees. Each show admits 1,000 ticket holders. By December 31 it has performed two fully attended shows; the other three shows are still to be performed.
- ₱1,500,000
- ₱900,000
- ₱600,000
- ₱300,000
08What advertising revenue has been earned through December 31?
Problem
All amounts are Philippine pesos (₱). A company receives 360,000 on August 1 for an advertising contract lasting three years (36 months). Revenue is earned evenly each month, starting August 1. All receipts were credited to Unearned advertising revenue. The reporting date is December 31 of the same year.
- ₱120,000
- ₱50,000
- ₱60,000
- ₱310,000
09What is annual depreciation expense?
Problem
All amounts are Philippine pesos (₱). Equipment costs 325,000, has a residual value of 25,000, and is available for use for three years. Use straight-line depreciation. No impairment or disposal is involved.
- ₱108,333.33
- ₱100,000
- ₱75,000
- ₱300,000
10What depreciation expense is recognized in the acquisition year?
Problem
All amounts are Philippine pesos (₱). Equipment costs 325,000, has a residual value of 25,000, and is available for use for three years. Use straight-line depreciation. No impairment or disposal is involved. The equipment becomes available for use on April 1 and is used through December 31. Apply monthly depreciation for April–December.
- ₱100,000
- ₱83,333.33
- ₱75,000
- ₱25,000
11What is the equipment’s carrying amount?
Problem
All amounts are Philippine pesos (₱). At December 31, equipment cost is 325,000 and accumulated depreciation is 75,000. Those balances include all required depreciation adjustments; there is no impairment.
- ₱400,000
- ₱250,000
- ₱300,000
- ₱75,000
12What is the required ending allowance?
Problem
All amounts are Philippine pesos (₱). At December 31 before adjustment, Galaxy has Accounts receivable of 941,500 and a credit balance of 1,860 in Allowance for doubtful accounts. The required ending allowance is 3.2% of the receivable balance. Use the balance-sheet allowance method.
- ₱28,268
- ₱30,128
- ₱1,860
- ₱911,372
13What adjusting doubtful-accounts expense is needed?
Problem
All amounts are Philippine pesos (₱). At December 31 before adjustment, Galaxy has Accounts receivable of 941,500 and a credit balance of 1,860 in Allowance for doubtful accounts. The required ending allowance is 3.2% of the receivable balance. Use the balance-sheet allowance method.
- ₱31,988
- ₱30,128
- ₱28,268
- ₱1,860
14What is the required total ending allowance?
Problem
All amounts are Philippine pesos (₱). At December 31, Lucero has a credit balance of 308 in Allowance for doubtful accounts before adjustment. Apply the specified uncollectible estimate to each receivable age group:
| Age group | Receivable balance | Uncollectible rate |
|---|---|---|
| Current | 41,000 | 2% |
| 1–30 days past due | 6,000 | 4% |
| 31–60 days past due | 2,000 | 10% |
| Over 60 days past due | 1,500 | 30% |
- ₱1,710
- ₱1,402
- ₱1,010
- ₱308
15What is the net realizable value of the receivables after adjustment?
Problem
All amounts are Philippine pesos (₱). At December 31, Lucero has a credit balance of 308 in Allowance for doubtful accounts before adjustment. Apply the specified uncollectible estimate to each receivable age group:
| Age group | Receivable balance | Uncollectible rate |
|---|---|---|
| Current | 41,000 | 2% |
| 1–30 days past due | 6,000 | 4% |
| 31–60 days past due | 2,000 | 10% |
| Over 60 days past due | 1,500 | 30% |
- ₱48,790
- ₱49,098
- ₱52,210
- ₱50,192
16What happens if used prepaid insurance is not adjusted?
- Assets understated
- Expense overstated
- Assets and profit overstated
- Liabilities understated
17What happens if earned revenue in the Unearned revenue account is not adjusted?
- Liability overstated and profit understated
- Asset understated and profit overstated
- Liability understated and expense overstated
- Cash understated
18What is cost of sales?
Problem
All amounts are Philippine pesos (₱). Use the periodic inventory system. Beginning inventory is 188,500; purchases 457,274; purchase returns 18,565; purchase discounts 4,653; freight in 1,259; ending inventory from physical count 85,150. Net sales are 796,065 and operating expenses are 100,000.
- ₱623,815
- ₱708,965
- ₱538,665
- ₱435,315
19What interest receivable is accrued at December 31?
Problem
All amounts are Philippine pesos (₱). On December 10 a business receives a 60,000 note bearing 4% annual interest for 30 days. No interest has been received or recorded. Adjust at December 31; exclude the issue date and use a 360-day year.
- ₱140
- ₱200
- ₱2,400
- ₱126
20Which description of depreciation is most accurate?
- A cash payment made annually
- Systematic allocation of depreciable cost over useful life
- Exact measurement of resale price
- A direct increase to equipment cost