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Under the accrual basis of accounting, adjustments are often made for prepaid expenses and unearned revenues.

On December 31, Putnall, Inc received a $215 utility bill for December that it will not pay until January 15. The adjusting entry needed on December 31 to accrue this expense is:

If a company has current assets of $15,000 and current liabilities of $9,500, its current ratio is 1.6

A company pays each of its two office employees each Friday at the rate of $100 per day for a five-day week that begins on Monday. If the monthly accounting period ends on Tuesday and the employees worked on both Monday and Tuesday, the month-end adjusting entry to record the salaries earned but unpaid is:

Posting is the transfer of journal entry information to the ledger.

Under the accrual basis of accounting, adjustments are often made for prepaid expenses and unearned revenues.

Successful use of a just-in-time inventory system can narrow the gap between the acid-test and the current ratio.

Murphy, Inc. installs a machine in its factory at the beginning of the year at a cost of $135,000. The machine’s useful life is estimated to be 5 years, or 300,000 units of product, with a $15,000 salvage value. During its first year, the machine produces 64,500 units of product. Determine the machines’ first year depreciation under the units-of-production method.

On October 1, Stansel Co. rented warehouse space to a tenant for $2,500 per month and received $12,500 for five months’ rent in advance on that date, with the lease beginning immediately. The cash receipt was credited to the Unearned Rent account. The company’s annual accounting period ends on December 31. The Unearned Rent account balance at the end of December, after adjustment, should be:

Interim financial statements report a company’s business activities for a one-year period.