Test your learning about ‘Adjusting entries’ chapter by answering 10 short questions given below. We suggest you try to answer each question yourself before clicking on the ‘see answer’ button.
If you find difficulty in answering these questions, read ‘Adjusting entries‘ chapter thoroughly from explanation section of the website.
1. What is an adjustment?
2. What is the purpose of adjustments?
3. What are outstanding expenses?
4. How are prepaid expenses and outstanding expenses shown in the balance sheet?
5. What do you mean by prepaid expenses?
6. What is accrued income/revenue?
7. What is unearned income/revenue?
8. Rent paid in advance amounting to $1,500 on January 1, 2016. During the month of January, $500 of rent was expired. What adjusting entry would be made on January 31, 2016.
9. At the end of the accounting year 2016, salaries amounting to $2,500 are outstanding. What adjusting entry would be made for it at the end of the accounting year.
10. During the period A, John Advertising Company receives $1,200 cash from a client. The advertising services valuing $600 are provided in period A and the rest will be provided in period B. What adjusting entry should be made by John Advertising Company at the end of the period A.