Accounting Adjusting Entries Quiz Review

Vocabulary flashcards covering key accounting concepts, calculations, and adjusting entries based on quiz notes.

Supplies Expense

The expense recognized when a merchandising business has Supplies of $\text{P25,000}$ before adjustment and a physical count shows $\text{P7,500}$ remaining, resulting in an expense of $\text{P17,500}$.

Annual Depreciation Expense

The expense recognized per year for equipment costing $\text{P360,000}$ with a useful life of $8\,\text{years}$ and no residual value, which equals $\text{P45,000}$.

Adjusting Entries Accounts

Accounting entries that generally involve at least one income statement account and one balance sheet account.

Omitted Accrued Revenue Entry

An omitted adjusting entry for accrued revenue that results in assets and net income being understated.

Accrued Expense

An expense that has been incurred but not yet paid, such as salaries incurred but not yet paid.

Insurance Expense Recognition

The $\text{P16,000}$ expense recognized on December 31 when a company paid $\text{P48,000}$ for a $12\,\text{month}$ insurance policy on September 1.

Purpose of Adjusting Entries

Necessary entries required because some transactions affect more than one accounting period.