acc 201 module 3 problem set

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15-12-2024

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I do not have access to real-time information, including specific content from learning management systems like the ACC 201 module 3 problem set. Therefore, I cannot provide a direct solution or answer key to that specific assignment. Copyright restrictions also prevent me from replicating copyrighted material.

However, I can provide a comprehensive overview of common topics covered in an introductory accounting course's Module 3, focusing on the types of problems students typically encounter. This will allow you to better understand the concepts and tackle your own problem set. Remember to always refer to your textbook and class materials for the most accurate and relevant information.

Common Topics in an Introductory Accounting Module 3 (Likely focusing on adjustments and the adjusted trial balance):

Module 3 in an introductory accounting course often builds upon the foundational knowledge of debits and credits, the accounting equation (Assets = Liabilities + Equity), and the basic financial statements (income statement, balance sheet, statement of cash flows). It typically introduces adjusting entries and their impact on the financial statements.

1. Accruals:

• What are accruals? Accruals are adjusting entries made to record revenue that has been earned but not yet received, or expenses that have been incurred but not yet paid. Think of it as "recording what should have been recorded" at the end of an accounting period.
• Example: A company provides services in December but doesn't receive payment until January. The December financial statements must reflect the revenue earned in December, even though the cash hasn't arrived yet. This requires an accrual of revenue. Similarly, salaries owed to employees at the end of the year are accrued as an expense, even though they are paid in the next period.
• How to approach problems: Identify the earned revenue or incurred expense. Determine the amount. Make the appropriate journal entry to increase an asset (accounts receivable for revenue) and a revenue account, or increase an expense account (salaries expense) and a liability (salaries payable).

2. Deferrals:

• What are deferrals? Deferrals are adjusting entries made to reflect the consumption or expiration of prepaid expenses or unearned revenues. This is the opposite of accruals. It's adjusting for the portion of the prepaid item or unearned revenue that has been used up or earned during the period.
• Example: A company pays for a one-year insurance policy in advance. At the end of each month, a portion of the insurance has been used. An adjusting entry is needed to reduce the prepaid insurance asset account and increase the insurance expense account. Similarly, if a company receives cash for services to be provided over a year, they need to recognize revenue only for the services rendered during each period.
• How to approach problems: Identify the prepaid expense or unearned revenue. Determine the portion that has been used or earned. Make the appropriate journal entry to decrease the asset (prepaid expense) and increase the corresponding expense account, or decrease the liability (unearned revenue) and increase the revenue account.

3. Depreciation:

• What is depreciation? Depreciation is the systematic allocation of the cost of a tangible asset (like equipment or buildings) over its useful life. It reflects the decrease in the asset's value over time due to wear and tear, obsolescence, or other factors.
• Example: A company purchases a machine for $10,000 with a useful life of 5 years. Using straight-line depreciation, the annual depreciation expense is $2,000 ($10,000/5). At the end of the first year, an adjusting entry is made to increase depreciation expense and increase accumulated depreciation (a contra-asset account).
• How to approach problems: Identify the asset's cost, useful life, and salvage value (estimated value at the end of its useful life). Use the appropriate depreciation method (straight-line, double-declining balance, etc.) to calculate the depreciation expense for the period.

4. Adjusted Trial Balance:

• What is an adjusted trial balance? After making all adjusting entries, an adjusted trial balance is prepared. It lists all the accounts and their balances after adjustments have been made. This ensures that the debit and credit columns are equal, which is crucial for preparing accurate financial statements.
• How to approach problems: Prepare the adjusted trial balance by listing all accounts from the general ledger with their adjusted balances. Sum the debit and credit columns to verify that they are equal. Any imbalance indicates an error in the adjusting entries or the trial balance itself.

5. Preparing Financial Statements:

• How to use the adjusted trial balance: The adjusted trial balance is the foundation for preparing the financial statements (income statement, balance sheet, and statement of cash flows). The accounts from the adjusted trial balance are used to calculate the revenues, expenses, assets, liabilities, and equity for the period.

Tips for Success:

• Understand the concepts: Don't just memorize the steps; understand the underlying principles of accruals, deferrals, and depreciation.
• Practice, practice, practice: Work through numerous problems to build your understanding and skill.
• Use T-accounts: T-accounts are a helpful tool for visualizing the impact of transactions and adjusting entries on account balances.
• Check your work: Always double-check your calculations and ensure that the debit and credit columns are equal in your trial balance and journal entries.

Remember to consult your textbook, lecture notes, and professor for specific guidance related to your ACC 201 Module 3 problem set. This overview provides a general framework, but the specifics may vary depending on your course curriculum. Good luck!