[MantisAlfredo]

Hypothetically: Lets say I took FAR and got some SIMS asking for corrected adjusting entries. Would you think this would mean giving adjusting entries that would be correct in the first place, given the information, or correcting entries that would change the entries given to the correct amounts?

For example: Lets say they give an adjusting entry to Utilities exp that is
Dr Utilities Expense 10,000
Cr Utilities Exp Accrued 10,000

But given the fact pattern it Utilities should have been accrued for 15,000, not 10,000. Would the entry they want be

Dr Utilities Expense 15,000
Cr Utilities Exp Accrued 15,000
-or-
Dr Utilities Exp 5,000
Cr Utilities Exp Accrued 5,000

Hypothetically, this could have boned me last exam, so any hypothetical experiences would be helpful!

[Recked]

I would think if you needed to increase the accrued amount you would just do another 5k, not the whole 15k.

[Tim]

The question should be pretty clear about what they want. It's always good to read the instructions completely. More likely you'd be making year-end adjusting entries correcting account balances and not going back and changing the entry that was originally made. But I could also see a problem where a coworker of yours is asking for help and they give you their proposed adjusting entries and the question asks you to provide the correct ones. So it really could be either given the circumstances.

[fxbinbin]

agree with @Tim, if you're adjusting the financial statement it should be 15k, if you're adjusting the adjusting entry it should be 5k

[Anonymous]

You have to read the question carefully and it becomes clear. If it asks you to prepare an entry, then you put the full amount, if you are making an adjusting entry then by definition you are booking the amount to adjust by. There was one SIM on my re-take where I wasn't sure, but went with adjusting entry. Looks like I wasn't wrong based on my score….

[Author]

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