Financial Management

1.2-29 Below is a list of qualitative characteristics of accounting. Following the list is a series of descriptive phrases.

A) faithful representation D) comparability

B) timeliness E) verifiability

C) relevance F) understandability

_____ 1. When information can make a difference in a decision

_____ 2. Accounting information is reported the same way by different companies.

_____ 3. The information must be capable of being checked for accuracy and completeness.

_____ 4. Making information available early enough to users to help them make decisions

_____ 5. Information must be complete, free from bias, and without material error.

_____ 6. Information must be transparent so it makes sense to reasonably informed users.

Required: Match each characteristic with the appropriate phrase.

Answer: 1 C 2 D 3 E 4 B 5 A 6 F

86. Prepare the December 31 year-end adjusting entries for Aaron’s Computer Services, Inc., using the following information:

A) On July 1, Aaron’s Computer Services received an advance payment of $16,000 for work to be performed evenly during the next 8 months.

B) The unadjusted balance in the Computer Supplies account was $3,500. As of the end of the year, $600 of computer supplies was left.

C) The depreciation on the Computer Equipment is $3,000 for the year.

D) Aaron’s Computer Services has one employee who is paid $1,000 each Friday for a five-day workweek. December 31 is on a Thursday.

E) A one-year insurance policy was purchased on November 1 for $2,400.

F) Aaron’s Computer Services has completed work for a client in the amount of $2,000 which has not yet been recorded.

Prepare the appropriate adjusting journal entries.

Answer:

|Dec 31...