NEED ASAP PLEASE Question 21 Crue Company had the following transactions during
ID: 2421657 • Letter: N
Question
NEED ASAP PLEASE
Question 21
Crue Company had the following transactions during the calendar year:
Sales of $4,800 on account
Collected $2,000 for services to be performed in the following year
Paid $1,625 cash in salaries
Purchased airline tickets for $250 in December for a trip to take place in the following year
What is Crue's current net income using accrual accounting?
$2,925.
$3,175.
$4,925.
$5,175.
3 points
Question 22
If an adjusting entry is not made for an accrued revenue,
revenues will be overstated.
assets will be overstated.
stockholders' equity will be understated.
expenses will be understated.
3 points
Question 23
If a resource has been consumed but a bill has not been received at the end of the accounting period, then
an expense should be recorded when the bill is received.
an expense should be recorded when the cash is paid out.
an adjusting entry should be made recognizing the expense.
it is optional whether to record the expense before the bill is received.
3 points
Question 24
Prepaid expenses are
paid and recorded in an asset account before they are used or consumed.
paid and recorded in an asset account after they are used or consumed.
incurred but not yet paid or recorded.
incurred and already paid or recorded.
3 points
Question 25
If a business has received cash in advance of services performed and credits a liability account, the adjusting entry needed after the services are performed will be
debit Unearned Service Revenue and credit Cash.
debit Unearned Service Revenue and credit Service Revenue.
debit Unearned Service Revenue and credit Prepaid Expense.
debit Unearned Service Revenue and credit Accounts Receivable.
3 points
Question 26
The preparation of adjusting entries is
straight forward because the accounts that need adjustment will be out of balance.
often an involved process requiring the skills of a professional.
only required for accounts that do not have a normal balance.
optional when financial statements are prepared.
3 points
Question 27
On January 1 of the current year, Doolittle Company purchased furniture for $7,560. The company expects to use the furniture for 3 years. The asset has no salvage value. The book value of the furniture at December 31of this year is
$0.
$2,520.
$5,040.
$7,560.
3 points
Question 28
Husker Du Supplies Inc. purchased a 12-month insurance policy on March 1 of the current year for $1,800. At March 31, the adjusting journal entry to record expiration of this asset will include a
debit to Prepaid Insurance and a credit to Cash for $1,800.
debit to Prepaid Insurance and a credit to Insurance Expense for $200.
debit to Insurance Expense and a credit to Prepaid Insurance for $150.
debit to Insurance Expense and a credit to Cash for $150.
3 points
Question 29
Pixies Inc. pays its rent of $54,000 annually on January 1. If the February 28 monthly adjusting entry for prepaid rent is omitted, which of the following will be true?
Failure to make the adjustment does not affect the February financial statements.
Expenses will be overstated by $4,500 and net income and stockholders' equity will be understated by $4,500.
Assets will be overstated by $9,000 and net income and stockholders' equity will be understated by $9,000.
Assets will be overstated by $4,500 and net income and stockholders' equity will be overstated by $4,500.
3 points
Question 30
Southeastern Louisiana University sold season tickets for the current year football season for $160,000. A total of 8 games will be played during September, October and November. In September, three games were played. The adjusting journal entry at September 30
will include a debit to Ticket Revenue and a credit to Unearned Ticket Revenue for $53,333.
will include a debit to Unearned Ticket Revenue and a credit to Ticket Revenue for $60,000.
will include a debit to Cash and a credit to Ticket Revenue for $40,000.
is not required. No adjusting entries will be made until the end of the season in November.
3 points
Question 31
At March 1, Minutemen Corp. had supplies on hand of $500. During the month, Minutemen purchased supplies of $1,200 and used supplies of $1,500. The March 31 adjusting journal entry should include a
debit to the supplies account for $1,500.
credit to the supplies account for $500.
debit to the supplies account for $1,200.
credit to the supplies account for $1,500.
3 points
Question 32
Clark Real Estate signed a four-month note payable in the amount of $8,000 on September 1. The note requires interest at an annual rate of 9%. The amount of interest to be accrued at the end of September is
$80.
$240.
$60.
$720.
3 points
Question 33
Sebastian Belle has performed $2,000 of CPA services for a client but has not billed the client as of the end of the accounting period. What adjusting entry must Sebastian make?
Debit Cash and credit Unearned Service Revenue
Debit Accounts Receivable and credit Unearned Service Revenue
Debit Accounts Receivable and credit Service Revenue
Debit Unearned Service Revenue and credit Service Revenue
3 points
Question 34
Trent Tables paid employee wages on and through Friday, January 26, and the next payroll will be paid in February. There are three more working days in January (29–31). Employees work 5 days a week and the company pays $900 a day in wages. What will be the adjusting entry to accrue wages expense at the end of January?
No adjusting entry is required.
Salaries and Wages Expense
4,500
Salaries and Wages Payable
4,500
Salaries and Wages Expense
900
Salaries and Wages Payable
900
Salaries and Wages Expense
2,700
Salaries and Wages Payable
2,700
3 points
Question 35
The adjusted trial balance is prepared
after financial statements are prepared.
before the trial balance.
to prove the equality of total assets and total liabilities.
after adjusting entries have been journalized and posted.
3 points
Question 36
The income statement for the current year of Nova Co. contains the following information:
Revenues
$ 70,000
Expenses:
Wages Expense
$ 45,000
Rent Expense
12,000
Advertising
6,000
Supplies Expense
6,000
Utilities Expense
2,500
Insurance Expense
2,000
73,500
Net Income (Loss)
$ (3,500)
The entry to close the expense accounts includes a
credit to Income Summary for $3,500.
debit to Income Summary for $73,500.
debit to Wages Expense for $2,500.
debit to Income Summary for $3,500.
3 points
Question 37
The final closing entry to be journalized is typically the entry that closes the
revenue accounts.
dividends account.
retained earnings account.
expense accounts.
3 points
Question 38
The heading for a post-closing trial balance has a date line that is similar to the one found on
a balance sheet.
an income statement.
a retained earnings statement.
the worksheet.
3 points
Question 39
The step in the accounting cycle that is performed on a periodic basis (i.e., monthly, quarterly) is
analyzing transactions.
journalizing and posting adjusting entries.
preparing a post-closing trial balance.
posting to ledger accounts.
3 points
Question 40
Merriweather Post Pavillion received a $820 check from a customer for the balance due. The transaction was erroneously recorded as a debit to Cash $280 and a credit to Service Revenue $280. The correcting entry is
Cash
820
Accounts Receivable
820
Cash
540
Accounts Receivable
280
Service Revenue
820
Cash
540
Service Revenue
280
Accounts Receivable
820
Accounts Receivable
820
Cash
540
Service Revenue
280
3 points
Question 41
An unacceptable way to make a correcting entry is to
reverse the incorrect entry.
erase the incorrect entry.
compare the incorrect entry with the correct entry and make a correcting entry to correct the accounts.
correct it immediately upon discovery.
3 points
Question 42
The following items are taken from the financial statements of the Postal Service for the year ending December 31:
Accounts payable
18,000
Accounts receivable
11,000
Accumulated depreciation- equipment
28,000
Advertising expense
21,000
Cash
15,000
Common stock
42,000
Dividends
14,000
Depreciation expense
12,000
Equipment
210,000
Insurance expense
3,000
Notes payable, due June 30 of next year
70,000
Prepaid insurance (12-month policy)
6,000
Rent expense
17,000
Retained earnings, beginning
60,000
Salaries and wages expense
32,000
Service revenue
133,000
Supplies
4,000
Supplies expense
6,000
What is the book value of the equipment at December 31?
$170,000
$182,000
$210,000
$238,000
3 points
Question 43
The following items are taken from the financial statements of the Postal Service for the year ending December 31:
Accounts payable
18,000
Accounts receivable
11,000
Accumulated depreciation- equipment
28,000
Advertising expense
21,000
Cash
15,000
Common stock
42,000
Dividends
14,000
Depreciation expense
12,000
Equipment
210,000
Insurance expense
3,000
Notes payable, due June 30 of next year
70,000
Prepaid insurance (12-month policy)
6,000
Rent expense
17,000
Retained earnings, beginning
60,000
Salaries and wages expense
32,000
Service revenue
133,000
Supplies
4,000
Supplies expense
6,000
What is the company's net income for the year ending December 31?
$12,000
$28,000
$42,000
$133,000
3 points
Question 44
Which of the following liabilities are not related to the operating cycle?
Salaries and wages payable
Accounts payable
Utilities payable
Bonds payable
$2,925.
$3,175.
$4,925.
$5,175.
Explanation / Answer
21. Income as per accrual basis is : 4800-1625= $ 3175
22. Revenue will be overstated
23.an adjust ing entry should be made recognizing expense.
24. 1.paid and recorded as asset before they are used.
25. Dr. Unearned service revenue and cr service revenue
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