Question

.) What are the four types of adjusting entries? Provide an example of each one.

6.) What are the journal entries for the seller of inventory (for the sale, for a return, and payment within the discount period)?

7.) Describe the difference between current and long-term liabilities.

8.) What is the journal entry to record cash received in advance of performing a service or delivering a product?

9.) What are the three important dates for a cash dividend? What is the journal entry required for each date? What is the overall impact of a cash dividend on the accounting equation (assets = liabilities + stockholders' equity)?

10.) Calculate net cash provided by operating activities.

11.) Name the 3 major business activities and be able to identify which activities belong to each category.

12.) Prepare an Income Statement, Statement of Stockholders' Equity, Balance Sheet and Statement of Cash Flows.

Answer 1

As per policy, only four parts of a question is allowed to answer at a time, so answering first four parts here:

5) The accounting adjustment entries could be of four types : accrued revenues, accrued expenses, deferred revenues and deferred expenses.

The Accrued revenue occurs where sale is made in one accounting year and payment is received in future accounting year. For example, sales made on credit with the terms following in the next accounting year.

The Accrued expenses are those which are paid in the future years to the current accounting year. For example, salary payable which are expenses for current years but payable in next year.

The Deferred revenues are that part of the sale whose money has been received in the current year but sale/services are to be executed in forthcoming years. For example, deferred revenues or payment received in advance for future services.

The Deferred expenses are those expenses which we have paid in advance in the current year but their benefits and expense booking take place in future years. For example, Prepaid Insurance, the premium payment is in current year but benefits spread over the year.

6)

Journal entries:
Date	Accounts Title	Debit $	Credit $
1	Accounts Receivable	xxxx
	Sales revenue		xxxx
	(being sale made on credit with term 2/30, n/45)
2	Sales return	xxxx
	Accounts Receivable		xxxx
	(being return of sales within discount period)
3	Cash	xxxx
	Trade discount	xxxx
	Accounts Receivable		xxxx
	(being balance payment received within discount period)

7) The current liabilities are those liabilities which are payable within next one year. No mortgage is applicable on such current liabilities.

The Long-term liabilities are those liabilities which are payable over one accounting year with some mortgage or security against the debt.

8)

Journal entries:
Date	Accounts Title	Debit $	Credit $
1	Cash	xxxx
	Deferred Revenue/Service revenue		xxxx
	(being payment received in advance on revenues generated in future)