CHAPTER 3

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CHAPTER 3. Adjusting the Accounts ASSIGNMENT CLASSIFICATION TABLE. Brief A B. Study Objectives Questions Exercises Exercises Problems Problems *1. Explain the time period 1 1. assumption. *2. Explain the accrual basis 2, 3, 4, 5 2, 3, 10. of accounting . *3. Explain the reasons for 6, 7 1. adjusting entries. *4. Identify the major types 8, 18 2, 8 4, 6, 11. of adjusting entries. *5. Prepare adjusting entries 8, 9, 10, 3, 4, 5, 6 5, 6, 7, 8, 1A, 2A, 3A, 1B, 2B, 3B, for deferrals. 11, 12, 13, 9, 10, 11, 4A, 5A, 6A 4B, 5B. 18, 19, 20 12, 13, 15. *6. Prepare adjusting entries 8, 14, 15, 7 5, 6, 7, 8, 1A, 2A, 3A, 1B, 2B, 3B, for accruals. 16, 17, 18, 9, 10, 11, 4A, 5A, 6A 4B, 5B. 19, 20 12, 13, 15. *7. Describe the nature and 21 9, 10 10, 11, 12, 1A, 2A, 3A, 1B, 2B, 3B, purpose of an adjusted 13, 14 5A, 6A 5B.

The two generally accepted accounting principles that relate to adjusting the accounts are: The revenue recognition principle, which states that revenue should be recognized in the accounting period in which it is earned.

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