Jill Crown earned a salary of $ 500 for the last week of October. She will be paid on November 1. The adjusting entry for Jill employer October 31 is:
Answer
a.No entry is required.
b.Salaries Expense500
Salary payable 500
c.Salaries Expense500
Cash500
d.Salaries Payable500
Cash500
Maple Tree Inc. purchased a 12-month insurance policy on March 1, 2010 for $ 1,200. At March 31, 2010, the adjusting journal entry to record expiration of this asset will include:
Answer
a.a debit to Prepaid Insurance and a credit to Cash for $ 1,200.
b.a debit to Prepaid Insurance and a credit to Insurance Expense for $ 120.
c.a debit to Insurance Expense and a credit to Prepaid Insurance for $ 100
d.a debit to Insurance Expense and a credit to Cash for $ 100.
Which statement is correct?
Answer
a.Accumulated Depreciation should always have a debit balance in the Adjusted Trial Balance.
b.Accumulated Depreciation is added to the long-term liabilities on the Balance Sheet.
c.Accumulated Depreciation, Office Equipment represents the total cost of office equipment that has expired up to the date of the Balance Sheet.
d.Accumulated Depreciation is used to reveal the value of the related asset on the date of the Balance Sheet.
Which of the following would not result in unearned revenue?
Answer
a.Rent collected in advance from tenants.
b.Services performed on account.
c.Sale of season tickets to football games.
d.Sale of two-year magazine subscriptions.
Net income will result if gross profit exceeds
Answer
a.cost of goods sold.
b.operating expenses.
c.purchases.
d.cost of goods sold plus operating expenses.
Inventory becomes part of cost of goods sold when a company
Answer
a.pays for the inventory.
b.purchases the inventory.
c.sells the inventory.
d.receives payment from the customer.
Which statement is incorrect?
Answer
a.Periodic inventory systems provide better control over inventories than perpetual inventory systems.
b.Computers and electronic scanners allow more companies to use a perpetual inventory system.
c.Freight-in is debited to merchandise inventory when a perpetual inventory system is used.
d.Regardless of the inventory system that is used, companies should take a physical inventory count.
Conway Company purchased merchandise inventory with an invoice price of $ 6,000 and credit terms of 2/10, n/30. What is the net cost of the goods if Conway Company pays within the discount period?
Answer
a. $ 6,000
b.$ 5,880
c.$ 5,400
d. $ 5,520
A credit sale of $ 900 is made on July 15, terms 2/10, net/30, on which a return of $ 50 is granted on July 18. What amount is received as payment in full on July 24?
Answer
a.$ 900
b.$ 833
c. $ 850
d.$ 882
discount magazine subscription service inc.
JKRB:1)
b. Salaries Expense 500
Salary payable 500
2)
Answer
c. a debit to Insurance Expense and a credit to Prepaid Insurance for $ 100
3)
Answer
This one depends on how you interpret the answers. Accumulated Depreciation represents the total amount of depreciation that has expired. If you subtract Accumulated Depreciation from the cost, it is used to reveal the book value.
c. Accumulated Depreciation, Office Equipment represents the total cost of office equipment that has expired up to the date of the Balance Sheet.
d. Accumulated Depreciation is used to reveal the value of the related asset on the date of the Balance Sheet.
4)
Answer
b. Services performed on account.
5)
Answer
d. cost of goods sold plus operating expenses.
6)
Answer
b. purchases the inventory.
7)
Answer
a. Periodic inventory systems provide better control over inventories than perpetual inventory systems.
Answer
b. $ 5,880
9)
Answer
b. $ 833
