Question

Question 11  

Our unearned revenue account had a credit balance of $5,000 before adjusting entries were recorded. On December 31, we determined that $3,000 of the $5,000 had been earned during the current year. What account and amount would we debit when we record this adjusting entry in the general journal?

unearned revenue, $2,000

service revenue, $2,000

unearned revenue, $3,000

service revenue, $3,000

Question 12  

The balance in our office supplies account on January 1 was $10,000. On January 31, our supplies on hand totaled $2,000. What account and amount would we credit when we record the adjusting entry for office supplies on January 31?

office supplies expense, $2,000

office supplies, $2,000

office supplies, $8,000

office supplies expense, $8,000

Question 13  

Annual depreciation on equipment amounted to $27,950 for the current year. What account would we debit when we record this adjusting entry in the general journal?

depreciation expense

equipment

cash

accumulated depreciation, equipment

Question 14  

Use the following adjusted trial balance compiled for our company on December 31 of the current year to answer these questions.

	Debit	Credit
Cash	$1,000
Accounts receivable	$3,000
Equipment	$5,000
Accounts payable		$3,500
Common stock		$2,000
Retained earnings		?
Dividends	$500
Service revenue		$8,500
Salaries expense	$2,500
Advertising expense	$2,000

Select the correct closing entry for revenues from thetable below:

		Debit	Credit
A	Service revenue	$6,000
	Income summary		$6,000
B	Income summary	$8,500
	Service revenue		$8,500
C	Income summary	$6,000
	Service revenue		$6,000
D	Service revenue	$8,500
	Income summary		$8,500

Select the correct closing entry for expenses from thetable below:

		Debit	Credit
A	Salaries expense	$2,500
	Advertising expense	$2,000
	Income summary		$4,500
B	Income summary	$4,500
	Salaries expense		$2,500
	Advertising expense		$2,000
C	Expenses	$4,500
	Income summary		$4,500
D	Income summary	$4,500
	Expenses		$4,500

Select the correct entry to close income summary from thetable below:

		Debit	Credit
A	Retained earnings	$4,000
	Income summary		$4,000
B	Income summary	$4,000
	Retained earnings		$4,000
C	Income summary	$8,500
	Revenue		$8,500
D	Net income	$6,000
	Retained earnings		$6,000

Select the correct closing entry for dividends from thetable below:

		Debit	Credit
A	Dividends	$500
	Income summary		$500
B	Dividends	$500
	Retained earnings		$500
C	Income summary	$500
	Dividends		$500
D	Retained earnings	$500
	Dividends		$500

Question 15 

What is gross profit for a merchandiser calculated as?

net sales minus cost of goods sold

gross sales minus cost of goods sold

net sales minus merchandise inventory

gross sales minus merchandise inventory

Answer 1

Solution 11:

Since $3000 has been earned, Therefore Unearned Revenue will be debited with $3,000.

Hence third option is correct.

Solution 12:

"Office supplies" will be credited with $10000- $2000 = "$8,000"

Hence third option is correct.

Solution 13:

"Depreciation expenses" would be debited for recording adjusting entry for Depreciation.

Hence first option is correct.

Solution 14- 1:

Closing entry for Revenues will be :

Service Revenue Dr $8,500

To Income Summary $8,500

Hence option "D" is correct.

Solution 14-2 :

Closing Entry for Expenses:

Income Summary Dr $4500

To Salaries expense $2500

To Advertising Expense $2000

Hence option "B" is correct.

Solution 14-3:

Closing entry for to close income summary account:

Income Summary Dr $4000

To Retained earnings $4000

Hence option "B" Is correct.

Solution 14-4:

Closing entry for Dividends:

Retained earnings Dr $500

To dividends $500

Hence Option "D" is correct.

Solution 15:

Gross profit = Net sales - Cost of goods sold

Hence first option is correct.