6. An NBA basketball team sells season ticketsworth $48 million before the baske
ID: 2433805 • Letter: 6
Question
6. An NBA basketball team sells season ticketsworth $48 million before the basketball season starts late in theyear. Assume this $48 million is debited to Cash and credited toUnearned Ticket Revenue. By the end of the calendar year, whichalso happens to be the team's accounting period end, 25% of thegames have been played. What adjusting journal entry should be madeat the end of the year?
A) Unearned Ticket Revenue, debit, $12 million;Cash, credit, $12 million
B) Ticket Revenue, debit, 12 million; UnearnedTicket Revenue, credit, $12 million
C) Unearned Ticket Revenue, debit, $12 million;Ticket Revenue, credit, $12 million
D) Ticket Revenue, debit, $12 million; Cash,credit, $12 million
E) None of the above
7. The J. Godfrey, Capital account has a creditbalance of $17,000 before closing entries are made. If totalrevenues for the period are $55,200, total expenses are $39,800,and withdrawals are $9,000, what is the ending balance in the J.Godfrey, Capital account after all closing entries aremade?
A) $ 8,000.
B) $15,400.
C) $23,400.
D) $17,000.
E) $32,400.
8. The selected accounts and balances for MammothMart appear as follows:
Advertising Expense $14,000
Freight In 7,000
Freight Out Expense 10,000
Interest Income 24,000
John Dugan, Capital 140,000
John Dugan, Withdrawals 21,000
Merchandise Inventory (Jan. 1) 70,000
Merchandise Inventory (Dec. 31) 56,000
Purchases 60,000
Purchases Returns and Allowances 4,000
Rent Expense 9,000
Sales 150,000
Sales Discounts 6,000
Sales Returns and Allowances 13,000
Wages Expense 32,000
Reference: Ref 5-4
Cost of goods available for sale would appear onthe income statement as
A) $63,000.
B) $77,000.
C) $126,000.
D) $133,000.
9. The collection of a $400 account within the 2percent discount period would result in a
A) debit to Sales Discounts for $8.
B) credit to Accounts Receivable for$392.
C) credit to Cash for $392.
D) debit to Accounts Receivable for$392.
10. The entry to record a sale of $750 with termsof 2/10, n/30 would include a
A) credit to Sales for $750.
B) debit to Sales for $735.
C) debit to Sales Discounts for $15.
D) credit to Accounts Receivable for$750.
11. The entry to record the return of goods froma customer would include a
A) debit to Sales Returns andAllowances.
B) credit to Sales.
C) debit to Sales.
D) credit to Sales Returns andAllowances.
12. Under the perpetual inventory system, inaddition to making the entry to record a sale, a companywould
A) make no additional entry until the end of theperiod.
B) debit Cost of Goods Sold and creditMerchandise Inventory.
C) debit Cost of Goods Sold and creditPurchases.
D) debit Merchandise Inventory and credit Cost ofGoods Sold.
13. Under the perpetual inventory system, inaddition to making the entry to record a sales return, a companywould
A) debit Merchandise Inventory and credit Cost ofGoods Sold.
B) make no additional entry until the end of theperiod.
C) debit Cost of Goods Sold and creditMerchandise Inventory.
D) debit Cost of Goods Sold and creditPurchases.
14. Under the perpetual inventory system, theentry to record a purchase return would include a creditto
A) Accounts Payable.
B) Purchases Returns and Allowances.
C) Cost of Goods Sold.
D) Merchandise Inventory.
15. Which of the following goods would not beincluded in merchandise inventory for a purchasingcompany?
A) Goods in transit shipped FOBdestination
B) Goods ordered and received from thesupplier
C) Goods in transit shipped FOB shippingpoint
D) Goods on hand in the showroom
16. Which of the following is not considered anoperating expense?
A) Advertising expense
B) General office expenses
C) Freight out expense
D) Cost of goods sold
17. Which of the following should not be includedin the count of ending merchandise inventory?
A) Goods in transit to which a company hastitle
B) Damaged goods to be sold at a reducedprice
C) Goods sold but not yet delivered
D) Goods in warehouses
Explanation / Answer
7. C 8. B 9. B 10. A 11. C 12. B 13. A 14. D 15.A 16. B 17. ARelated Questions
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