QC1 3-1. Describe a company's annual reporting period. 3-2. Why do companies prepare interim financial statements? 3-3. What two accounting principles most directly drive the adjusting process? 3-4. Is cash basis accounting consistent with the matching principle? Why or why not? 3-5. If your company pays a $4,800 premium on April 1,2015 , for two years' insurance coverage (beginning immediately), how much insurance expense is reported in 2016 using cash basis accounting? QC2 3-6. If an adjusting entry for accrued revenues of $200 at year-end is omitted, what is this error's effect on the year-end income statement and balance sheet? 3-7. What is a contra account? Explain its purpose. 3-8. What is an accrued expense? Give an example. 3-9. Describe how an unearned revenue arises. Give an example. 3-10. Music-Mart records $1,000 of accrued salaries on December 31 . Five days later, on January 5 (the next payday), salaries of $7,000 are paid. What is the January 5 entry? QC3 3-11. Jordan Air has the following information in its unadjusted and adjusted trial balances. What are the adjusting entries that Jordan Air likely recorded? 3-12. What accounts are taken from the adjusted trial balance to prepare an income statement? 3-13. In preparing financial statements from an adjusted trial balance, what statement is usually prepared second? QC4 3-14. What are the major steps in preparing closing entries? 3-15. Why are revenue and expense accounts called temporary? Identify and list the types of temporary accounts. 3-16. What accounts are listed on the post-closing trial balance? QC5 3-17. Classify the following assets as (1) current assets, (2) plant assets, or (3) intangible assets: (a) land used in operations, (b) office supplies, (c) receivables from customers due in 10 months, (d) insurance protection for the next 9 months, (e) trucks used to provide services to customers, (f) trademarks. 3-18. Cite at least two examples of assets classified as investments on the balance sheet