BAT 4M0 Adjusting Entries QUIZ
Name: ________________________
Question 1: Application: /14
The accounting records for Gourmet Catering are maintained on a monthly basis. Use the following facts to record the journal entries needed to
adjust the accounts on August 31 st . Be sure to use informative
explanations.
Some account names from the Chart of Accounts:
 Unearned Catering Revenue
 Catering Revenue
 Unexpired Insurance
1.
A six-month bank loan for $24,000 at 10%/a was taken out on July 1 st .
The total interest will be paid at the end of the loan.
2.
A one-year insurance policy was purchased on May 1 st for $3,600.
3.
A dinner that was catered by the business on August 29 th has not yet been recorded in the books. The cost that will be charged to the customer is $2,250.
4.
The equipment owned by Gourmet Catering is recorded in the books at
$82,000. Straight-line depreciation is used and the equipment is expected to have a useful life of 12 years and a residual value of
$10,000.
5.
The business requires a deposit of $500 from each customer when they book a future catering date. The business has recorded deposits from
20 customers. During the month of August Gourmet Catering provided the service to six of the customers.
Adjusting Entries QUIZ

DATE
GENERAL JOURNAL
PARTICULARS PR DEBIT
Adjusting Entries QUIZ
CREDIT

Question 2: Application: /9
Meadow Charter Service opened for business on April 1 st
Use the following facts to prepare the adjusting entries
. that would be needed on May 31 st as a result of these
previously recorded transactions. Be sure to use
informative explanations.
April 2, Took out a bank loan for $20 000 at 6% per year for one year from TD-Canada Trust. Interest will be paid when the loan is repaid.
April 12 th Purchased an $8,000 computer that is expected to have a useful life of 4 years and $800 residual value. Use a “straight line” depreciation method.
April 21 st Received a cheque for $17,000 as advance payment for a charter that would be provided to the client in May.
Note: The charter was provided on May 30 th but no entry was made at that time.
Prepare the adjusting entries necessary on May 31 st related to the above entries.
Adjusting Entries QUIZ

DATE
GENERAL JOURNAL
PARTICULARS PR
Adjusting Entries QUIZ
DEBIT CREDIT