1.

On June 28, Richard Price provided consulting services to Sheffield Company. Price billed Sheffield on July 2 for $800 related to these services. On July 5, Sheffield paid the invoice in full. Prices only cost related to this sale was $220 in Salaries Expense. Prices paid the salaries on July 3. Assuming Prices company has a June 30 year end, the companys profit for the Sheffields job on the June 30 financial statements should be

$800.

$220.

0.

$580.

2. The preparation of adjusting entries is

a. required every time financial statements are prepared.

b. only required for accounts that do not have a normal balance.

c. optional when financial statements are prepared.

d. straight forward because the accounts that need adjustment will be out of balance.

3.A companys unadjusted trial balance shows a debit in the Supplies account of $1,450; however, there are only $600 worth of supplies remaining. The adjusting entry will include a debit to

Supplies Expense for $850.

Supplies for $600.

Supplies Expense for $1,450.

Supplies for $1,450.