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Chapter 3: Q 23RQ (page 157)

If a payment of a deferred expense was recorded under the alternative treatment, what account would be debited in the adjusting entry.

Short Answer

Expert verified

Prepaid expense account is debited.

Step by step solution

01

Step-by-Step SolutionStep 1: Explanation on Deferred Expense

Deferred expense indicates the expense which are paid in advance by the business.

02

Alternative Treatment of Deferred Expense

Under the alternative treatment, deferred expense is recorded by debiting expense account and crediting cash account for the amount paid. And at the year end, adjusting entry is recorded by debiting prepaid expense and credting expense account for the unexpired portion of expense.

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Most popular questions from this chapter

Question :In recording adjusting entries, Reagan Financial Advisors failed to record the adjusting entries for the following situations: a. Office supplies on hand, \(100. b. Accrued revenues, \)5,000. c. Accrued interest expense, \(250. d. Depreciation, \)800. e. Unearned revenue that has been earned, $550. Determine the effects on the income statement and balance sheet by identifying whether assets, liabilities, equity, revenue, and expenses are either overstated or understated. Use the following table. Adjustment a has been provided as an example.Adjustment Not Recorded (a) Overstated Overstated Understated Assets Liabilities Equity Revenue Expenses Balance Sheet Income Statement

Question :The worksheet of Best Jobs Employment Service follows but is incomplete.The following data at April 30, 2018, are given for Best Jobs Employment Service: a. Service revenue accrued, \(700. b. Office supplies used, \)300. c. Depreciation on equipment, \(1,300. d. Salaries owed to employees, \)1,400. Requirements 1. Calculate and enter the adjustment amounts directly in the Adjustments columns. Use letters a through d to label the four adjustments. 2. Calculate and enter the adjusted account balances in the Adjusted Trial Balance columns. 3. Prepare each adjusting journal entry calculated in Requirement 1. Date the entries, and include explanations

On October 1, 2018, Kitchen Design paid $15,000 for store rent covering the six-month period ending March 31, 2019.

On September 1, Big Fan of Toledo prepaid six months of rent, $3,300. Requirements 1. Record the journal entry for the September 1 payment. 2. Record the adjusting entry required at September 30. 3. Using T-accounts, post the journal entry and adjusting entry to the accounts involved and show their balances at September 30. (Ignore the Cash account.)

Question :Suppose on January 1, Andrew’s Tavern prepaid rent of $16,800 for the full year. At November 30, how much rent expense should be recorded for the period January 1 through November 30?
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