Question : 1) The accounting cycle the process by which companies produce : 1212600

 

1) The accounting cycle is the process by which companies produce their financial statements for a specific period of time.

 

2) The accounting cycle as well as financial statement presentation is different for companies reporting under international financial reporting standards (IFRS) and those reporting under accounting standards for private enterprises (ASPE).

 

3) Under international financial reporting standards (IFRS), a Balance Sheet may also be called a Statement of Financial Position.

4) Companies following international financial reporting standards (IFRS) must provide the following financial statements:

A) Income Statement, Statement of Financial Position, Statement of Changes in Equity, Statement of Cash Flows, Notes

B) Statement of Comprehensive Income, Statement of Final Position, Statement of Changes in Equity, Statement of Cash Flows, Notes

C) Statement of Comprehensive Income, Statement of Financial Position, Statement of Changes in Equity, Statement of Cash Flows, Notes

D) Statement of Comprehensive Income, Statement of Financial Position, Statement of Changes in Cash Flow, Statement of Owner’s Equity, Notes

 

5) In terms of presentation, the main difference between a balance sheet prepared under accounting standards for private enterprises (ASPE) and a statement of financial position prepared under international financial reporting standards (IFRS) might be:

A) the time period being covered.

B) the level of detail presented.

C) the items included.

D) the ordering of the assets and liabilities.

 

6) Canadian companies following International Financial Reporting Standards (IFRS) are required to classify their balance sheets:

A) on the equity and liability side in the order of equity, long-term liabilities, current liabilities.

B) on the asset side long-term assets followed by current assets.

C) in the same manner as ASPE.

D) using IFRS presentation or the traditional presentation.

7) What are the potential differences in balance sheet presentation for companies reporting under ASPE versus IFRS?

 

 

1) At the end of the period on December 31, 2013, Jack’s Fishing and Tackle shop accrued interest expense in the amount of $82. On January 15, 2014, the loan payment was made and included $2,000 principal and $140 interest. What is the journal entry to record the January 15, 2014, payment if Jack’s accountant used a reversing entry on January 1, 2014?

A)

Loan payable

2,140

 

        Cash

 

2,140

 

B)

Loan payable

2,000

 

Interest expense

140

 

        Cash

 

2,140

 

C)

Loan payable

2,000

 

Interest expense

58

 

Interest payable

82

 

        Cash

 

2,140

 

D)

Loan payable

2,000

 

Interest payable

140

 

        Cash

 

2,140

 

2) The following are the adjusting journal entries recorded by Sterling Services for the year ended December 31, 2013. Assuming that Sterling uses reversing entries, prepare the reversing entries on January 1, 2014.

Explanations are not required.

General Journal

Date

Accounts

Debit

Credit

Dec. 31

Salary Expense

4,000

 

 

          Salary Payable

 

4,000

31

Unearned Service Revenue

6,000

 

 

          Service Revenue

 

6,000

31

Accounts Receivable

1,400

 

 

          Service Revenue

 

1,400

31

Insurance Expense

1,400

 

 

          Prepaid Insurance

 

1,400

31

Supplies Expense

3,100

 

 

          Supplies

 

3,100

 

3) The following are the adjusting journal entries recorded by Manitouwan Services for the year ended December 31, 2013.  Assuming that Manitouwan uses reversing entries, prepare the reversing entries  on January 1, 2014. Explanations are not required.

 

General Journal

Date

Accounts

Debit

Credit

Dec. 31

Accounts Receivable

6,200

 

 

          Service Revenue

 

6,200

31

Supplies Expense

1,800

 

 

          Supplies

 

1,800

31

Insurance Expense

2,800

 

 

          Prepaid Insurance

 

2,800

31

Amortization Expense

4,900

 

 

          Accumulated Amortization

 

4,900

31

Unearned Service Revenue

1,400

 

 

          Service Revenue

 

1,400

31

Salary Expense

1,800

 

 

          Salary Payable

 

1,800

 

4) The following are the adjusting journal entries recorded by Mandarin Consulting for the year ended December 31, 2013.  Assuming that Mandarin uses reversing entries, prepare the reversing entries  on January 1, 2014. Explanations are not required.

 

General Journal

Date

Accounts

Debit

Credit

Dec. 31

Office Supplies Expense

300

 

 

          Office Supplies

 

300

31

Insurance Expense

550

 

 

          Prepaid Insurance

 

550

31

Amortization Expense

2,400

 

 

          Accumulated Amortization

 

2,400

31

Unearned Service Revenue

250

 

 

           Service Revenue

 

250

31

Interest Expense

200

 

 

          Interest Payable

 

200

31

Salaries Expense

650

 

 

          Salaries Payable

 

650

31

Rent Expense

300

 

 

          Prepaid Rent

 

300

 

5) Charlton Cleaning Services pays out wages every week on Friday afternoon. Payroll expense totals $3,500 per week, based on a 5-day week.  The month of June ended on a Thursday. On Thursday, June 30, Charlton made the following accrual adjustment:

 

Wages expense

2,800

 

    Wages payable

 

2,800

 

At the same time, they prepared the following reversing entry to be booked on July 1:

 

Wages payable

2,800

 

    Wages expense

 

2,800

 

On Friday afternoon, when wages were paid out, what journal entry is required?