Question 1

The journal entry that records the collection of cash from a customer for payment on account for a sale that was recorded previously includes a debit to:

Accepted Answer

A)  Cash and credit to Accounts Receivable.
B)  Accounts Receivable and credit to Cash.
C)  Cash and credit to Accounts Payable.
D)  Accounts Payable and credit to Cash.E) A) and B)
F) A) and C)

Question 2

Which account is least likely to be credited when an expense is recorded?

Accepted Answer

A)  Cash
B)  Accounts Payable
C)  An account with the word "Prepaid" in its title
D)  Accounts ReceivableE) A) and D)
F) B) and C)

Question 3

During January 2018,the first month of operations,a consulting firm had following transactions: 1.Issued common stock to owners in exchange for $20,000 cash.
2.Purchased $5,000 of equipment,paying $1,000 cash and signing a promissory note for $4,000.
3.Received $9,000 in cash for consulting services performed in January.
4.Purchased $1,500 of supplies on account;all of the supplies were used in January.
5.Provided consulting services on account in the amount of $16,000.
6.Paid $750 on account.
7.Paid $3,000 to employees for work performed during January.
8.Received a bill for utilities for January of $3,400;the bill remains unpaid.
What is the amount to be reported as total liabilities on the balance sheet at the end of January?

Accepted Answer

A)  $4,750
B)  $4,150
C)  $8,150
D)  $8,500E) C) and D)
F) A) and D)

Question 4

During January 2018,the first month of operations,a consulting firm had following transactions: 1.Issued common stock to owners in exchange for $20,000 cash.
2.Purchased $5,000 of equipment,paying $1,000 cash and signing a promissory note for $4,000.
3.Received $9,000 in cash for consulting services performed in January.
4.Purchased $1,500 of supplies on account;all of the supplies were used in January.
5.Provided consulting services on account in the amount of $16,000.
6.Paid $750 on account.
7.Paid $3,000 to employees for work performed during January.
8.Received a bill for utilities for January of $3,400;the bill remains unpaid.
What is the amount of total revenue to be reported on the income statement for the month of January?

Accepted Answer

A)  $45,000.
B)  $9,000.
C)  $29,000.
D)  $25,000.E) A) and B)
F) A) and C)

Question 5

The following transactions occurred during July: 1.Received $1,600 cash for services performed during July.
2.Received $10,000 cash from the issuance of common stock to owners.
3.Received $800 from a customer as payment for services performed during June.
4.Billed $7,000 to customers for services performed on account in July.
5.Borrowed $5,000 from the bank and signed a promissory note.
6.Received $2,000 from a customer for services to be performed during August.
As a result of these transactions,what is the amount of the increase to the Cash account?

Accepted Answer

A)  $19,400.
B)  $26,400.
C)  $4,400.
D)  $14,400.E) A) and B)
F) A) and C)

Question 6

Crane Inc.had a beginning balance in accounts receivable of $19,200.During the year,it had credit sales of $240,000.Crane received payments on account of $224,000.At the end of the year,accounts receivable has a:

Accepted Answer

A)  debit balance of $35,200.
B)  credit balance of $35,200.
C)  debit balance of $3,200.
D)  credit balance of $3,200.E) None of the above
F) A) and D)

Question 7

Wave Studios provided $1,640 worth of DJ services for a wedding,billing the customer on credit.Which of the following records this transaction?

Accepted Answer

A)  Debit Accounts Payable and credit Service Revenue for $1,640.
B)  Debit Service Revenue and credit Deferred Service Revenue for $1,640.
C)  Credit Accounts Receivable and debit Service Revenue for $1,640.
D)  Debit Accounts Receivable and credit Service Revenue for $1,640.E) A) and B)
F) B) and C)

Question 8

When Blendtek Co.performs $980 of services on account for a customer,Blendtek will record a journal entry with a debit to:

Accepted Answer

A)  Cash and a credit to Accounts Receivable.
B)  Accounts Receivable and a credit to Service Revenue.
C)  Service Revenue and a credit to Deferred Revenue.
D)  Cash and a credit to Accounts Payable.E) C) and D)
F) All of the above

Question 9

Sparkling Pools received a bill for $1,200 for running newspaper ads during the last two weeks of July;the bill will be paid on August 1.Advertising Expense should be:

Accepted Answer

A)  credited for $1,200 in July.
B)  credited for $1,200 in August.
C)  debited for $1,200 in July.
D)  debited for $1,200 in August.E) A) and B)
F) A) and C)

Question 10

Which of the following line items appear on an income statement?

Accepted Answer

A)  Inventory
B)  Revenues
C)  Accounts Receivable
D)  Salaries and Wages PayableE) All of the above
F) B) and C)

Question 11

In its first year of business,Declan Industries earned $175,000 of revenues of which $140,000 was collected.It also incurred $157,500 in expenses for which $140,000 was paid.Which of the following statements are correct?

Accepted Answer

A)  Declan should use cash basis accounting for external reporting purposes as required under GAAP and IFRS.
B)  Declan should report net income of $17,500 for external reporting purposes.
C)  Declan should report $0 net income for external reporting purposes.
D)  Declan should report net income of $35,000 for external reporting purposes.E) A) and D)
F) A) and C)

Question 12

Deferred Revenue is a(n) :

Accepted Answer

A)  expense.
B)  asset.
C)  revenue.
D)  liability.E) A) and D)
F) B) and C)

Question 13

Which of the following statements is correct about the unadjusted trial balance?

Accepted Answer

A)  Only balance sheet accounts are listed.
B)  Typically,accounts are listed in order of all debit balance accounts first and all credit balance accounts next.
C)  When it balances,transactions have been properly recorded.
D)  Total debits should equal total credits.E) All of the above
F) None of the above

Question 14

A company neglected to record services provided on credit.What would be the effect of this omission?

Accepted Answer

A)  Liabilities would be overstated and revenues would be understated.
B)  Assets and revenues would be understated.
C)  Assets would be overstated and revenues would be understated.
D)  Liabilities and revenues would be understated.E) A) and B)
F) A) and C)

Question 15

Which of the following identifies,in the correct order,steps in the five-step model for reporting revenue?

Accepted Answer

A)  Determine the transaction price;identify the seller's performance obligation(s) ;identify the contract.
B)  Allocate the transaction price to the performance obligation(s) ;determine the transaction price;recognize revenue when (or as) each performance obligation is satisfied.
C)  Identify the contract;determine the transaction price;identify the seller's performance obligation(s) .
D)  Identify the seller's performance obligation(s) ;determine the transaction price;recognize revenue when (or as) each performance obligation is satisfied.E) None of the above
F) A) and B)

Question 16

In November,Ellie Company bought supplies on account for $480,with payment due to the supplier in 90 days.The supplies were used for products made and delivered in November.In which month should Ellie Company record the cost of the supplies as an expense?

Accepted Answer

A)  One-third should be expensed in each month from November through the January payment date.
B)  January.
C)  November.
D)  DecemberE) C) and D)
F) All of the above

Question 17

Daube Industries' operations for the month of October are summarized as follows:
A.Provided $2,500 of services on account.
B.Received $2,000 cash for services provided in October.
C.Received $500 cash for services to be provided in November.
D.Received $1,500 cash on account for service provided in September.
E.Paid September's warehouse rental bill on account in the amount of $500.
F.Received October's rental bill of $750;set it aside.
Required:
Prepare journal entries to record the transactions identified among activities (A)through (F).

Accepted Answer

The answer of Daube Industries' operations for the month of...

Question 18

Melody's Piano School operations for the month of May were limited to the following transactions: Provided $800 of piano lessons to students who paid in cash.
Provided $200 of piano lessons on account.
Collected $600 from students who took piano lessons during April.
Paid April's piano rental bill of $200.
Received May's piano rental bill of $300 and set it aside for payment in June.
Assuming the company uses accrual basis accounting,what is net income for May?

Accepted Answer

A)  $800.
B)  $600.
C)  $700.
D)  $1,200.E) C) and D)
F) B) and D)

Question 19

The expense recognition principle indicates:

Accepted Answer

A)  where expenses should be presented on the income statement.
B)  how expenses should be split between the income statement and the balance sheet.
C)  the ordering of current assets and current liabilities on the balance sheet.
D)  when costs are recognized as expenses on the income statement.E) B) and C)
F) All of the above

Question 20

This month,Weeds B Gone Lawn Service pays cash for $6,200 of grass fertilizer to be used two months from now.What journal entry will Weeds B Gone record this month?

Accepted Answer

A)  Debit Cash and credit Supplies Expense for $6,200.
B)  Debit Supplies Expense and credit Accounts Payable for $6,200.
C)  Debit Supplies and credit Cash for $6,200.
D)  Debit Retained Earnings and credit Accounts Payable for $6,200.E) A) and B)
F) A) and D)

Exam 3: The Income Statement

Correct Answer
verified

Which of the following statements is correct about the unadjusted trial balance?

Correct Answer
verified

Correct Answer
verified

Crane Inc.had a beginning balance in accounts receivable of $19,200.During the year,it had credit sales of $240,000.Crane received payments on account of $224,000.At the end of the year,accounts receivable has a:

Correct Answer
verified

The journal entry that records the collection of cash from a customer for payment on account for a sale that was recorded previously includes a debit to:

Correct Answer
verified

A company neglected to record services provided on credit.What would be the effect of this omission?

Correct Answer
verified

In its first year of business,Declan Industries earned $175,000 of revenues of which $140,000 was collected.It also incurred $157,500 in expenses for which $140,000 was paid.Which of the following statements are correct?

Correct Answer
verified

Which of the following line items appear on an income statement?

Correct Answer
verified

Correct Answer
verified

Which account is least likely to be credited when an expense is recorded?

Correct Answer
verified

Which of the following identifies,in the correct order,steps in the five-step model for reporting revenue?

Correct Answer
verified

In November,Ellie Company bought supplies on account for $480,with payment due to the supplier in 90 days.The supplies were used for products made and delivered in November.In which month should Ellie Company record the cost of the supplies as an expense?

Correct Answer
verified

Wave Studios provided $1,640 worth of DJ services for a wedding,billing the customer on credit.Which of the following records this transaction?

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

When Blendtek Co.performs $980 of services on account for a customer,Blendtek will record a journal entry with a debit to:

Correct Answer
verified

Deferred Revenue is a(n) :

Correct Answer
verified

Sparkling Pools received a bill for $1,200 for running newspaper ads during the last two weeks of July;the bill will be paid on August 1.Advertising Expense should be:

Correct Answer
verified

This month,Weeds B Gone Lawn Service pays cash for $6,200 of grass fertilizer to be used two months from now.What journal entry will Weeds B Gone record this month?

Correct Answer
verified

The expense recognition principle indicates:

Correct Answer
verified

Exam 3: The Income Statement

Correct AnswerverifiedShow Answer

Which of the following statements is correct about the unadjusted trial balance?

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Crane Inc.had a beginning balance in accounts receivable of $19,200.During the year,it had credit sales of $240,000.Crane received payments on account of $224,000.At the end of the year,accounts receivable has a:

Correct AnswerverifiedShow Answer

The journal entry that records the collection of cash from a customer for payment on account for a sale that was recorded previously includes a debit to:

Correct AnswerverifiedShow Answer

A company neglected to record services provided on credit.What would be the effect of this omission?

Correct AnswerverifiedShow Answer

In its first year of business,Declan Industries earned $175,000 of revenues of which $140,000 was collected.It also incurred $157,500 in expenses for which $140,000 was paid.Which of the following statements are correct?

Correct AnswerverifiedShow Answer

Which of the following line items appear on an income statement?

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Which account is least likely to be credited when an expense is recorded?

Correct AnswerverifiedShow Answer

Which of the following identifies,in the correct order,steps in the five-step model for reporting revenue?

Correct AnswerverifiedShow Answer

In November,Ellie Company bought supplies on account for $480,with payment due to the supplier in 90 days.The supplies were used for products made and delivered in November.In which month should Ellie Company record the cost of the supplies as an expense?

Correct AnswerverifiedShow Answer

Wave Studios provided $1,640 worth of DJ services for a wedding,billing the customer on credit.Which of the following records this transaction?

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

When Blendtek Co.performs $980 of services on account for a customer,Blendtek will record a journal entry with a debit to:

Correct AnswerverifiedShow Answer

Deferred Revenue is a(n) :

Correct AnswerverifiedShow Answer

Sparkling Pools received a bill for $1,200 for running newspaper ads during the last two weeks of July;the bill will be paid on August 1.Advertising Expense should be:

Correct AnswerverifiedShow Answer

This month,Weeds B Gone Lawn Service pays cash for $6,200 of grass fertilizer to be used two months from now.What journal entry will Weeds B Gone record this month?

Correct AnswerverifiedShow Answer

The expense recognition principle indicates:

Correct AnswerverifiedShow Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified