20. The approach to preparing financial statements based on recognizing revenues

Question

20. The approach to preparing financial statements based on recognizing revenues when they are earned and matching expenses to those revenues is: A. Cash basis accounting B. The matching principle C. The time period principle D. Accrual basis accounting E. Revenue basis accounting The following Trial Balance is to be used for questions 21 through 23: 21. Prepare an income statement from the adjusted trial balance of Hanson Storage 22. Prepare a statement of retained earnings from the adjusted trial balance of Hanson Storage 23. Prepare a balance sheet from the adjusted trial balance of Hanson Storage. 24. In general journal form, record the December 31 adjusting entries for the following transactions and events. Assume that December 31 is the end of the annual accounting period. a. The Prepaid Insurance account shows a debit balance of $2,340, representing the cost of a three-year fire insurance policy that was purchased on October 1 of the current year b. The Office Supplies account has a debit balance of S500; a year-end inventory count reveals S100 of supplies still on hand c. On November 1 of the current year, Rent Earned was credited for $3,750. This amount represented the rent earned for a three-month period beginning November 1 d. Estimated depreciation on office equipment is $800 e. Accrued salaries amount to $1,400

Explanation / Answer

As per chegg guidelines we answer one question per post. But I have answered multiple questions. Kindly post remaining questions in next post Dear Student Thank you for using Chegg Please find below the answer Statementshowing Computations Paticulars Amount Q20 B The Matching principle Cannot answer 21 to 23 as there is no information available Q24 Debit Credit Insurance expense DR                    195.00 To prepaid expense                             195.00 (2340/3 * 3/12) b) Supplies expense dr                    400.00 To Supplies                             400.00 (500 - 100) c) Rent earned Dr                 1,250.00 To Unearned rent revenue                          1,250.00 d) Depreciation expense DR                    800.00 To Accumulated depreciation - office equipment                             800.00 e) Salaries expense Dr                 1,400.00 To Salaries payable                          1,400.00

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