Chapter 14 Analyzing Adjustments on a Work Sheet

The Supplies- Office amount in a work sheet’s Trial Balance Debit column represents the value of supplies
at the beginning of a fiscal period plus office supplies bought during the fiscal period

The two accounts used to adjust the Office Supplies account are
Supplies-Office and Supplies Expense-Office

The portion of the insurance premiums that has expired during a fiscal period is classified as
an expense

The two accounts used to adjust the Prepaid Insurance accounts are
Prepared insurance and Insurance Expense

The amount of goods on hand for sale to customers is called
Merchandise Inventory

The Merchandise Inventory amount in a work sheet’s Trial Balance Debit column represents the merchandise inventory
at the beginning of a fiscal period

The two accounts used to adjust the Merchandise Inventory account are
Merchandise Inventory and Income Summary

The Income Summary amount in a work sheet’s Adjustments Debit column represents the
decrease in Merchandise Inventory

Recording expenses in the accounting period in which the expenses contribute to earning revenue is an application of the accounting concept
Matching Expenses with Revenue

The two accounts used to adjust the uncollectible accounts are
Uncollectible Accounts Expense and Allowance for Uncollectible Accounts

The two accounts used to adjust the depreciation of store equipment are
Accumulated Depreciation-Store Equipment and Depreciation Expense-Store Equipment

The two accounts used to record the adjustment for federal income tax are
Federal Income Tax Payable and Federal Income Tax Expense