Question

1. A company had credit sales $30,000 and cash sales of $23,000 during the month of May. Also during​ May, the company paid wages of $24,000 and utilities of $9,000. It also received payments from customers on account totaling $4,400. What was the​company's net income for the​ month?

A. 53,000 B. 20,000 C. 86,000 D. 23,000

2. Which accounts are increased by​ debits?

A.

Accounts Receivable and Utilities Expense.

B.

Accounts Payable and Service Revenue.

C.

Salaries Expense and Common Stock.

D.

Cash and Accounts Payable.

3. Posting​ is:

A.

copying the information from the journal to the ledger.

B.

copying the information from the ledger to the financial statements.

C.

entering the data into the journal.

D.

copying the information from the journal to the trial balance

4. A business paid $3,000 on account. The journal entry​ would:

A.

debit Accounts Receivable for $3,000

and credit Revenue for $3,000.

B.

debit Accounts Payable for $3,000

and credit Cash for $3,000.

C.

debit Cash for $3,000 and credit Accounts Payable for $3,000.

D.

debit Cash for $3,000 and credit Retained Earnings for $3,000

5. On May​ 1, a business provided legal services to a client and billed the client $2,200.The client promised to pay the business in one month. Which journal entry should the business record on May​ 1?

1. Debit Cash for $2,200 and credit Retained Earnings for $2,200.

2. Debit Cash for $2,200 and credit Service Revenue for $2,200.

3. Debit Accounts Receivable for $2,200 and credit Service Revenue for $2,200.

4. Debit Accounts Payable for $2,200 and credit Service Revenue for $2,200.

6. The Accounts Receivable account for​ Johnny's Mechanic Shop had a beginning balance of $34,000. During the​ month, Johnny made sales on account of $47,000 The ending balance in the Accounts Receivable account is $35,000. What are cash collections for the​ month?

1. $47,000

2. $46,000

3. $81,000

4. $ 34,000

Answer 1

Solution 1:

Company's net income = Total sales - Expenses during the month = ($30000 + $23000) - ($24000 + $9000)

= $53,000 - $33,000 = $20,000

Hence option "B" is correct.

Solution 2:

"Accounts Receivable and Utilities Expense" are increased by debits.

Hence option "A" is correct.

Solution 3:

Posting​ is "copying the information from the journal to the ledger".

Hence option "A" is correct.

Solution 4:

A business paid $3,000 on account. The journal entry​ would:

Debit Accounts Payable for $3,000

Credit Cash for $3,000.

Hence, option "B" is correct.

Solution 5:

On May​ 1, a business provided legal services to a client and billed the client $2,200. Journal entry to be recorded on May​ 1:

Debit Accounts Receivable for $2,200

Credit Service Revenue for $2,200.

Hence option "C" is correct.

Solution 6:

Cash collections = Sales on account + Beginning accounts receivable - Ending accounts receivable

= $47000 + $34000 - $35000 = $46,000

Hence option "B" is correct.