Adjusting Entries
Selected Ledger Accounts Used by Cross Country Truck

question 47

Essay

Adjusting entries
Selected ledger accounts used by Cross Country Truck Rentals Limited, are listed along with identifying numbers. Following this list of account numbers and titles is a series of transactions. For each transaction, you are to indicate the proper accounts to be debited and credited.
$\begin{array}{llllll}1 & \text { Cash } & 22 & \text { Notes Payable } & 41 & \text { Truck Rental Revenue } \\2 & \text { Accounts Receivable } & 23 & \text { Dividends Payable } & 51 & \text { Advertising Expense } \\3 & \text { Office Supplies } & 24 & \text { Income Taxes Payable } & 52 & \text { Office Supplies Expense } \\4 & \text { Unexpired Insurance } & 25 & \text { Unearned Revenue } & 53 & \text { Rent Expense } \\5 & \text { Trucks } & 31 & \text { Share Capital } & 54 & \text { Insurance Expense } \\6 & \text { Accumlated Depr: } & 32 & \text { Retained Earnings } & 55 & \text { Depreciation Expense: } \\& \text { Expense Trucks } & 33 & \text { Dividends } & & \text { Trucks } \\21 & \text { Accounts Payable } & && 56 & \text { Income Taxes Expense }\end{array}$ $$\begin{array} { | l | l | c | c | } \hline && \text { Account(s) } & \text { Accounts(s) } \\\hline & \text { Transactions } & \text { Debited } & \text { Credited } \\ \hline & \begin{array} { l } \text { Example: Paid rent on the building for the current } \\\text { period }\end{array} & 53 & 1 \\\hline \text { a) } & \begin{array} { l } \text { Trucks are purchased by making a } 30 \% \text { cash } \\\text { down payment and issuing a note payable for the } \\\text { balance of the purchase price. }\end{array} & & \\\hline \text { b) } & \begin{array} { l } \text { Fee is received in advance, for rental of truck for a } \\\text { future period }\end{array} & & \\\hline \text { c) } & \begin{array} { l } \text { Purchased a large quantity of office supplies on } \\\text { credit }\end{array} & & \\\hline \text { d) } & \begin{array} { l } \text { Bought a three-year insurance policy and paid in } \\\text { full }\end{array} & & \\\hline \text { e) } & \text { Declared a dividend to be paid in } 60 \text { days } & \\\hline \text { f) } & \text { Depreciation on trucks is recorded } & \\\hline \text { g) } & \begin{array} { l } \text { Adjusting entry is made to record liability to Daily } \\\text { News for advertising done this period; payment is } \\\text { due next month }\end{array} & & \\\hline \text { h) } & \begin{array} { l } \text { Adjusting entry is made to record truck rentals } \\\text { earned but not yet received or recorded }\end{array} & & \\\hline \text { i) } & \begin{array} { l } \text { Some portion of the truck rentals previously } \\\text { received in advance have now been earned }\end{array} & & \\\hline \text { j) } & \begin{array} { l } \text { Made an adjusting entry for office supplies used } \\\text { during this period }\end{array} & & \\\hline \text { k) } & \begin{array} { l } \text { Made an adjusting entry for the portion of the } \\\text { insurance premium which had expired }\end{array} & & \\\hline \text { l) } & \begin{array} { l } \text { Made an adjusting entry to accrue income taxes } \\\text { expenses at the end of a profitable period. }\end{array} & \\\hline\end{array}$$

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Definitions:

Globalization Strategy

A strategy that adopts standardized products and advertising for use worldwide.

Efficiencies

The ratio of the output produced to the input resources used in the production process, aiming to minimize resources while maximizing output.

Local Markets

Marketplaces within a specific geographical area where goods and services are sold and bought, with particular focus on the needs and preferences of the local community.

Differentiation Strategy

A business approach that involves offering unique products or services to stand out from competitors.