In: Accounting
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. |
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