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.

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

ekkarill92 answered 3 years ago

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