Question

In: Accounting

1.When a net loss has occurred, Income Summary is debited and Owner’s Drawings is credited. credited...

1.When a net loss has occurred, Income Summary is

debited and Owner’s Drawings is credited.
credited and Owner’s Capital is debited.
credited and Owner’s Drawings is debited.
debited and Owner’s Capital is credited.

2. On September 23, Reese Company received a $350 check from Mike Moluf for services to be performed in the future. The bookkeeper for Reese Company incorrectly debited Cash for $350 and credited Accounts Receivable for $350. The amounts have been posted to the ledger. To correct this entry, the bookkeeper should

debit Accounts Receivable $350 and credit Service Revenue $350.
debit Accounts Receivable $350 and credit Unearned Service Revenue $350.
debit Cash $350 and credit Unearned Service Revenue $350.
debit Accounts Receivable $350 and credit Cash $350.

3. Cash of $100 received at the time the service was provided was journalized and posted as a debit to Cash $100 and a credit to Accounts Receivable $100. Assuming the incorrect entry is notreversed, the correcting entry is

debit Service Revenue $100 and credit Accounts Receivable $100.
debit Cash $100 and credit Service Revenue $100.
debit Accounts Receivable $100 and credit Service Revenue $100.
debit Accounts Receivable $100 and credit Cash $100.

4. Whitman Company paid $630 cash on account to a creditor. The journal entry for this transaction was incorrectly recorded as a debit to Cash of $360 and a credit to Accounts Receivable of $360. The correcting entry is

debit to Accounts Receivable, $360, and credit to Cash, $360.
debit to Accounts Payable, $630, debit to Accounts Receivable, $360, and credit to Cash, $990.
debit to Accounts Receivable, $630, and credit to Accounts Payable, $630.
debit to Accounts Payable, $630, and credit to Cash, $630.

5. In a classified balance sheet, assets are usually classified using the following categories:

current assets; long-term investments; property, plant, and equipment; and intangible assets.
current assets; long-term assets; property, plant, and equipment; and intangible assets.
current assets; long-term investments; property, plant, and equipment; and tangible assets.
current assets; long-term investments; tangible assets; and intangible assets.

6. Maxim Company had the following partial listing of accounts and balances at year-end: Cash, $7,000; Accounts Receivable, $6,000; Accounts Payable, $15,000; Equipment, $23,000; Inventories, $5,000; Supplies, $1,000; Investment in Real Estate, $75,000; Unearned Service Revenue, $13,000; and Prepaid Rent, $4,000. The total current assets for Maxim Company is

$98,000.
$23,000.
$149,000.
$19,000.

Solutions

Expert Solution

1) Net loss occurred

Date account and explanation debit credit
Retained earnings/owner's capital
Income summary

So answer is b) credited and Owner’s Capital is debited.

2) Correcting entry

Date account and explanation debit credit
Account receivable 350
Unearned service revenue 350

So answer is b) debit Accounts Receivable $350 and credit Unearned Service Revenue $350.

3) Journal entry

Date account and explanation debit credit
Account receivable 100
Service revenue 100

So answer is c) debit Accounts Receivable $100 and credit Service Revenue $100.

4) Journal entry

Date account and explanation debit credit
Account receivable 360
Account payable 630
Cash 990

So answer is b) debit to Accounts Payable, $630, debit to Accounts Receivable, $360, and credit to Cash, $990.

5) In a classified balance sheet, assets are usually classified using the following categories:

So answer is a) current assets; long-term investments; property, plant, and equipment; and intangible assets.

6) Current assets = 7000+6000+5000+1000+4000 = 23000

So answer is b) $23000


Related Solutions

QUESTION 1. A bookkeeper has debited an asset account for $6900 and credited a liability account...
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...
When production costs are debited to Work in Process Inventory, which accounts will be credited? A)...
When production costs are debited to Work in Process Inventory, which accounts will be credited? A) Raw Materials Inventory, Factory Labor, and Finished Goods Inventory B) Accounts Payable, Factory Wages Payable, and Accumulated Depreciation C) Raw Materials Inventory, Factory Labor, and Manufacturing Overhead
Indicate which of the following accounts should be debited and which should be credited.  An example has...
Indicate which of the following accounts should be debited and which should be credited.  An example has been provided (ex).  Purchase Office Supplies in exchange for cash  Debit : N (Supplies) Credit: C (Cash)…see below.  Only include the letter of the account not the account name.   Accounts payable E. Dividends I. Rent expense M. Service revenue   Accounts receivable F. Office Equipment J. Retained earnings N. Supplies Cash G. Notes payable K. Salaries expense O. Utilities expense Common stock H. Prepaid rent L. Salaries payable...
On August 1, supplies were purchased; Accounts Payable was debited and Supplies credited for $1,500. The...
On August 1, supplies were purchased; Accounts Payable was debited and Supplies credited for $1,500. The account was due in October, and $700 of these supplies were on hand at the end of August. The entry to correct the accounts at August 31:
1. When the balance in the Income Summary account is a​ debit, the company​ has: A.incurred...
1. When the balance in the Income Summary account is a​ debit, the company​ has: A.incurred a net income. B.made an error in their closing entries. C.incurred a net loss. D. had more revenue than expenses. 2. The amount for​ withdrawals, to be used on the Statement of​ Owner's Equity, would be obtained​ from: A.the worksheet in the income statement credit column. B.the worksheet in the balance sheet credit column. C.the worksheet in the balance sheet debit column. D.the worksheet...
Ex 1-15 Net income and owner’s equity for four businesses Four different proprietorships, Juliet, Kilo, Lima,...
Ex 1-15 Net income and owner’s equity for four businesses Four different proprietorships, Juliet, Kilo, Lima, and Mike, show the same balance sheet data at the beginning and end of a year. These data, exclusive of the amount of owner’s equity, are summarized as follows: Total Assets Total Liabilities Beginning of the year $ 600,000 $150,000 End of the year 1,125,000 500,000 On the basis of the above data and the following additional information for the year, determine the net...
1/ Fellows and Marshall are partners in an accounting firm and share net income and loss...
1/ Fellows and Marshall are partners in an accounting firm and share net income and loss equally. Fellows' beginning partnership capital balance for the current year is $304,000, and Marshall's beginning partnership capital balance for the current year is $135,000. The partnership had net income of $139,000 for the year. Fellows withdrew $32,000 during the year and Marshall withdrew $108,000. What is Marshall's return on equity? Multiple Choice 51.5% 30.0% 72.0% 34.7% 60.0% 2/ The partnership agreement for Wilson, Pickett...
What is meant by maximizing owner’s equity value (shareholder wealth)? Why are maximizing just net income,...
What is meant by maximizing owner’s equity value (shareholder wealth)? Why are maximizing just net income, or just profit, inappropriate goals?   (10 points) Why do financial managers and investors find cash flows to be more important than accounting profit? (10 points) What information does time series analysis provide for firm managers, analysts, and investors? (10 points) Define the following ratios and explain their significance. (30 points) Quick ratio Average collection period Return on equity Debt ratio Profit margin
In general terms, net operating loss is a loss that results when a company’s expenses exceed...
In general terms, net operating loss is a loss that results when a company’s expenses exceed its income. Respond to the following in a minimum of 175 words: What are the tax implications of a net operating loss? For how long can an organization carry forward a net operating loss? Explain your reasoning.
XYZ corporation had a $20,000 net loss in 2018. Kitty has $2000 income in 2016 and...
XYZ corporation had a $20,000 net loss in 2018. Kitty has $2000 income in 2016 and $8000 income in 2017. Kitty is c corporation tax client. How do you handle this case and what you can tell her to write off on her tax?
ADVERTISEMENT
ADVERTISEMENT
ADVERTISEMENT