WGU D102 FINANCIAL ACCOUNTING | OA |
OBJECTIVE ASSESSMENT | QUESTIONS AND
ANSWERS | GRADED A+
Account - Answers - An accounting record in which the results of transactions are
accumulated; shows increases, decreases, and a balance
Accounts Receivable - Answers - A current asset representing money due for services
performed or merchandise sold on credit
On August 1 of Year 1, a company paid $7,200 for two years' rent. The rental period
starts on August 1 of Year 1.
Which debit or credit is correctly included in the adjusting journal entry necessary on
December 31 of Year 1? - Answers - 1. Credit to rent expense for $1,500.
2. Credit to prepaid rent for $5,100.
3. Debit to rent expense for $1,500.
4. Debit to rent expense for $5,100.
Correct: 3
On October 1 of Year 1, a company made a $60,000 cash loan to another company.
The interest rate on the loan is 5%. No cash payments will be collected on the loan until
September 30 of Year 2.
Which debit or credit is correctly included in the adjusting journal entry necessary on the
company's books (the lender) on December 31 with respect to this loan? - Answers - 1.
Credit to interest revenue for $750.
2. Debit to interest revenue for $2,250.
3. Credit to interest revenue for $2,250.
4. Debit to interest revenue for $750.
Correct: 2
On January 1, a company had office supplies costing $4,600. During the year, the
company bought (and recorded) additional office supplies costing $9,900. On December
31, a physical count of office supplies revealed that supplies costing $2,900 remained.
Which debit or credit is correctly included in the adjusting journal entry necessary on
December 31 to record the supplies that the company used during the year? - Answers
- 1. Credit to office supplies expense for $11,600.
2. Debit to office supplies for $11,600.
3. Credit to office supplies for $11,600.
4. Debit to cash for $11,600.
Correct: 3
, At the end of the year, before any closing entries are made, which account has a debit
balance? - Answers - Cost of goods sold
Revenues: Credit or Debit on the book? - Answers - Credits; they represent increases of
equity
Expenses and Dividends: Credit or Debit on the books? - Answers - Debits; they
represent decreases in equity
Steps to closing Entries: - Answers - 1. Separate Nominal accounts from real accounts
2. Debit or credit each nominal account to make the balance = 0
3. Corresponding debit or credit to Retained Earnings
How is the ending retained earnings calculated? - Answers - Beginning retained
earnings + Net Income - Dividends
Net Income - Answers - the difference between total revenue and total expenses
On January 6, a credit sale was made for $1,000. Terms for the sale were 4/10, n/30.
Cash for the sale was collected on January 25.
Which debit or credit should be included in the journal entry to record the cash collection
on January 25? - Answers - 1. Debit accounts receivable for $1,000
2. Debit sales discounts for $960
3. Debit cash for $1,000
4. Debit sales discounts for $40
Correct: 2
A company's controller estimated bad debt expense using the percentage of accounts
receivable method. Total sales for the year were $1,500,000. The ending balance in
accounts receivable was $300,000. An examination of the outstanding accounts at the
end of the year indicates that approximately 7% of these accounts will ultimately prove
to be uncollectible. Before any adjustment, the balance in the allowance for bad debts is
$4,000 (credit). Total accounts written off as uncollectible during the year were $15,000.
Which debit or credit is included in the adjusting entry to record bad debt expense for
the year? - Answers - 1. Credit allowance for bad debts for $21,000
2. Debit allowance for bad debts for $25,000
3. Debit allowance for bad debts for $15,000
4. Credit allowance for bad debts for $17,000
Correct: 3
The following are payroll data for the employees of a company:
Salaries Withholding Taxes Payable$20,000
OBJECTIVE ASSESSMENT | QUESTIONS AND
ANSWERS | GRADED A+
Account - Answers - An accounting record in which the results of transactions are
accumulated; shows increases, decreases, and a balance
Accounts Receivable - Answers - A current asset representing money due for services
performed or merchandise sold on credit
On August 1 of Year 1, a company paid $7,200 for two years' rent. The rental period
starts on August 1 of Year 1.
Which debit or credit is correctly included in the adjusting journal entry necessary on
December 31 of Year 1? - Answers - 1. Credit to rent expense for $1,500.
2. Credit to prepaid rent for $5,100.
3. Debit to rent expense for $1,500.
4. Debit to rent expense for $5,100.
Correct: 3
On October 1 of Year 1, a company made a $60,000 cash loan to another company.
The interest rate on the loan is 5%. No cash payments will be collected on the loan until
September 30 of Year 2.
Which debit or credit is correctly included in the adjusting journal entry necessary on the
company's books (the lender) on December 31 with respect to this loan? - Answers - 1.
Credit to interest revenue for $750.
2. Debit to interest revenue for $2,250.
3. Credit to interest revenue for $2,250.
4. Debit to interest revenue for $750.
Correct: 2
On January 1, a company had office supplies costing $4,600. During the year, the
company bought (and recorded) additional office supplies costing $9,900. On December
31, a physical count of office supplies revealed that supplies costing $2,900 remained.
Which debit or credit is correctly included in the adjusting journal entry necessary on
December 31 to record the supplies that the company used during the year? - Answers
- 1. Credit to office supplies expense for $11,600.
2. Debit to office supplies for $11,600.
3. Credit to office supplies for $11,600.
4. Debit to cash for $11,600.
Correct: 3
, At the end of the year, before any closing entries are made, which account has a debit
balance? - Answers - Cost of goods sold
Revenues: Credit or Debit on the book? - Answers - Credits; they represent increases of
equity
Expenses and Dividends: Credit or Debit on the books? - Answers - Debits; they
represent decreases in equity
Steps to closing Entries: - Answers - 1. Separate Nominal accounts from real accounts
2. Debit or credit each nominal account to make the balance = 0
3. Corresponding debit or credit to Retained Earnings
How is the ending retained earnings calculated? - Answers - Beginning retained
earnings + Net Income - Dividends
Net Income - Answers - the difference between total revenue and total expenses
On January 6, a credit sale was made for $1,000. Terms for the sale were 4/10, n/30.
Cash for the sale was collected on January 25.
Which debit or credit should be included in the journal entry to record the cash collection
on January 25? - Answers - 1. Debit accounts receivable for $1,000
2. Debit sales discounts for $960
3. Debit cash for $1,000
4. Debit sales discounts for $40
Correct: 2
A company's controller estimated bad debt expense using the percentage of accounts
receivable method. Total sales for the year were $1,500,000. The ending balance in
accounts receivable was $300,000. An examination of the outstanding accounts at the
end of the year indicates that approximately 7% of these accounts will ultimately prove
to be uncollectible. Before any adjustment, the balance in the allowance for bad debts is
$4,000 (credit). Total accounts written off as uncollectible during the year were $15,000.
Which debit or credit is included in the adjusting entry to record bad debt expense for
the year? - Answers - 1. Credit allowance for bad debts for $21,000
2. Debit allowance for bad debts for $25,000
3. Debit allowance for bad debts for $15,000
4. Credit allowance for bad debts for $17,000
Correct: 3
The following are payroll data for the employees of a company:
Salaries Withholding Taxes Payable$20,000
