Acc 205_Week Two Exercise Solution

Acc 205_Week Two Exercise Solution

1. Classification of items for Ron Carroll Company

A. pre­paid expense

B. accrued revenue

C. none of the foregoing

D. unearned revenue

E. pre­paid expense

F. accrued expense

G. none of the foregoing

H. none of the foregoing

2. Computing prepaid account balance of Action Sign Company:

3. Understanding the closing process:

A. Interest Payable, Accounts Receivable, Cash, Accounts Payable, Accumulated Depreciation: Equipment

B. Alex Kenzy, Drawing, Service Revenue, Supplies Expense, Interest Expense

C. Interest Expense, Supplies Expense

D. Alex Kenzy, Drawing

4. Adjusting entries and financial statements for Fixation Enterprises:

5. Adjusting entries preparation for Kathy’s Day Care Center:

6. Palmetto Company’s Bank reconciliation and adjustingentries:

a. Palmetto’s January bank reconciliation:

b. Necessary journal entries for Palmetto

7. Direct write-off method:

a. The journal entry needed to write off Mattingly’s account:

b. The ability of the direct write-off method to value receivables on the year-end balance sheet:

8. Allowance method:

9. Direct write-off and allowance methods:

10. Allowance method:

ACC 205_Week_Two_Exercise_Assignment

Revenue and Expenses

Recognition of concepts.
2. Analysis of prepaid account balance.
3. Understanding the closing process.
4. Adjusting entries and financial statements.
5. Adjusting entries.
6. Bank reconciliation and entries.
7. Direct write-off method.
8. Allowance method: estimation and balance sheet disclosure.
9. Direct write-off and allowance methods: matching approach.
10. Allowance method: analysis of receivables.
Acc 205 Week 2_DQs and Journal

DQ 1 Accounting Cycle

Financial statements are a product of the accounting cycle. Think about two different companies: a manufacturing company, and a retail company. Why would different companies have different accounting cycles? Would you expect the steps of the accounting cycle to be the same for each company? Why or why not?

DQ 2 Bank Reconciliation

What is the purpose of bank reconciliation? What are the reasons for differences between the cash reported in the accounting records and the cash balance in the bank statements? Analyze several of your peers’ posts. Let at least two of your peers know what happens to the discrepancies between the book balance and the bank balance. Could these differences just be written off?

Week 2 Journal

Income Statement Journal
The income statement measures the income and expenses of a company over a specific period of time. Reflecting on your personal financial statement for the past month, can you apply the principles of the income statement? What did you learn from this experience?