Question

QUESTION

1. A bookkeeper has debited an asset account for $6900 and credited a liability account for $3700. Which of the following would be an incorrect way to complete the recording of this transaction:

2. Credit a revenue account for $3200.

Credit another asset account for $3200.

Debit another asset account for $3200.

Credit the common stock account for $3200.

Credit another liability account for $3200.

QUESTION

1. Savvy Sightseeing had beginning equity of $78,000; revenues of $108,000, expenses of $71,000, and dividends to stockholders of $9600; there were no stock issuances. Calculate the ending equity.

$37,000.

$115,000.

$41,000.

$105,400.

$31,400.

QUESTION

1. An adjusting entry was made on year-end December 31 to accrue salary expense of $1900. Assuming the company does not prepare reversing entries, which of the following entries would be prepared to record the $4400 payment of salaries in January of the following year?

Salaries Expense 4400

Cash 4400

Salaries Payable 1900

Salaries Expense 2500

Cash 4400

Salaries Payable 4400

Cash 4400

Salaries Expense 1900

Salaries Payable 1900

Salaries Payable 1900

Cash 1900

  

QUESTION

1. Jeff Jackson opened Jackson's Repairs on March 1 of the current year. During March, the following transactions occurred:

1. Jackson invested $27,000 cash in the business in exchange for common stock.

2. Jackson contributed $102,000 of equipment to the business.

3. The company paid $2200 cash to rent office space for the month of March.

4. The company received $18,000 cash for repair services provided during March.

5. The company paid $6400 for salaries for the month of March.

6. The company provided $3200 of services to customers on account.

7. The company paid cash of $700 for utilities for the month of March.

8. The company received $3300 cash in advance from a customer for repair services to be provided in April.

9. The company paid $5200 in cash dividends.

Based on this information, net income for March would be:

$8200.

$5500.

$15,500.

$15,400.

$11,900.

QUESTION

1. On April 1, Garcia Publishing Company received $28,980 from Otisco, Inc. for 36-month subscriptions to several different magazines. The company credited Unearned Fees for the amount received and the subscriptions started immediately. Assuming adjustments are only made at year-end, what is the adjusting entry that should be recorded by Garcia Publishing Company on December 31 of the first year?

debit Unearned Fees, $28,980; credit Fees Earned, $28,980.

debit Unearned Fees, $21,735; credit Fees Earned, $21,735.

debit Unearned Fees, $9660; credit Fees Earned, $9660.

debit Unearned Fees, $7245; credit Fees Earned, $7245.

debit Unearned Fees, $2415; credit Fees Earned, $2415.

QUESTION

1. On September 1, Kennedy Company loaned $115,000, at 12% annual interest, to a customer. Interest and principal will be collected when the loan matures one year from the issue date. Assuming adjustments are only made at year-end, what is the adjusting entry for accruing interest that Kennedy would need to make on December 31, the calendar year-end?

2. Debit Interest Receivable, $13,800; credit Cash, $13,800

Debit Interest Receivable, 4600; credit Interest Revenue, $4600.

Debit Cash, $4600; credit Interest Revenue, $4600.

Debit Interest Expense, $4600; credit Interest Payable, $4600

Debit Interest Expense, $13,800; credit Interest Payable, $13,800

Answer 1

Question - (1)

Answer -

Particulars	Explanation
Option - (C) is Correct.	Debit another asset account for $3200

.

Question - (2)

Answer -

Particulars	Explanation
Option - (D) is Correct.	Ending equity = Beginning equity + Revenues - Expenses - Dividends to stockholders Ending equity = $78000 + $108000 - $71000 - $9600 = $105400.

.

Question - (3)

Answer -

Particulars	Explanation
Option - (B) is Correct.	Journal entry General Journal Debit ($) Credit ($) Salaries Payable Salaries Expense Cash 1900 2500 - - - 4400

.

Question - (4)

Answer -

Particulars	Explanation
Option - (E) is Correct.	Net income = Revenues - Expenses Net income = ($18000 + $3200) - ($2200 + $6400 + $700) = $11900.

.

Question - (5)

Answer -

Particulars	Explanation
Option - (D) is Correct.	The adjusting entry that should be recorded by Garcia Publishing Company on December 31 of the first year - Debit Unearned Fees, $7245**; Credit Fees Earned, $7245**. ** ($28980 / 36 month) * 9 month = $7245.

.

Question - (6)

Answer -

Particulars	Explanation
Option - (B) is Correct.	The adjusting entry for accruing interest that Kennedy would need to make on December 31, the calendar year-end - Debit Interest Receivable, $4600**; credit Interest Revenue, $4600**. ** ($115000 * 12%) * 4 month / 12 month = $4600.