Accounting Questions and Graded Answers.
A dress shop makes a large sale for $1,000 on November 30. The customer is sent a bill on
December 5 and a check is received on December 10. The dress shop follows GAAP and applies
the revenue recognition principle. When is the $1,000 considered to be revenue?
a. December 5
b. December 10
c. November 30
d. December 1 - c. November 30
Quirk Company purchased office supplies costing $4,000 and debited an asset for the full
amount. At the end of the accounting period, a physical count of office supplies revealed $1,600
still on hand. The appropriate adjusting journal entry to be made at the end of the period would
be
a. Debit Office Supplies Expense, $1,600; Credit Office Supplies, $1,600.
b. Debit Office Supplies, $2,400; Credit Office Supplies Expense, $2,400.
c. Debit Office Supplies Expense, $2,400; Credit Office Supplies, $2,400.
d. Debit Office Supplies, $1,600; Credit Office Supplies Expense, $1,600. - C. Debit
Office Supplies Expense, $2,400; Credit Office Supplies, $2,400.
Southeastern Louisiana University sold season tickets for the 2013 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 receipt of cash was properly recorded as Unearned
Ticket Revenue. The company issues financial statements on a monthly basis. The adjusting
journal entry on September 30
a. is not required. No adjusting entries will be made until the end of the season in
November.
b. will include a debit to Cash and a credit to Ticket Revenue for $160,000.
, c. will include a debit to Unearned Ticket Revenue and a credit to Ticket Revenue for
$60,000.
d. will include a debit to Ticket Revenue and a credit to Unearned Ticket Revenue for
$100,000.
e. will include a debit to Ticket Revenue and a credit to Unearned Ticket Revenue for
$60,000. - C. will include a debit to Unearned Ticket Revenue and a credit to Ticket
Revenue for
$60,000.
Maple Tree Inc. purchased a 12-month insurance policy on March 1, 2013 for $900 and
recorded it properly as an asset. Coverage is effective immediately. At March 31, 2013, the
adjusting journal entry needed will include
a. a debit to Prepaid Insurance and a credit to Cash for $900.
b. a debit to Prepaid Insurance and a credit to Insurance Expense for $825.
c. a debit to Insurance Expense and a credit to Prepaid Insurance for $75
d. a debit to Insurance Expense and a credit to Cash for $75.
e. a debit to Prepaid Insurance and a credit to Insurance Expense for $75. - C. a debit to
Insurance Expense and a credit to Prepaid Insurance for $75
Deb Smiley, CPA, has billed her clients for services performed. She subsequently receives
payments from her clients. What entry will she make upon receipt of the cash from the clients?
a. Debit Unearned Revenue and credit Service Revenue
b. Debit Cash and credit Accounts Receivable
c. Debit Accounts Receivable and credit Service Revenue
d. Debit Cash and credit Service Revenue
e. Debit Cash and credit Unearned Revenue. - B. Debit Cash and credit Accounts
Receivable
Cathy Cline, an employee of Merlin Company, will not receive her paycheck until April 2, 2013.
A dress shop makes a large sale for $1,000 on November 30. The customer is sent a bill on
December 5 and a check is received on December 10. The dress shop follows GAAP and applies
the revenue recognition principle. When is the $1,000 considered to be revenue?
a. December 5
b. December 10
c. November 30
d. December 1 - c. November 30
Quirk Company purchased office supplies costing $4,000 and debited an asset for the full
amount. At the end of the accounting period, a physical count of office supplies revealed $1,600
still on hand. The appropriate adjusting journal entry to be made at the end of the period would
be
a. Debit Office Supplies Expense, $1,600; Credit Office Supplies, $1,600.
b. Debit Office Supplies, $2,400; Credit Office Supplies Expense, $2,400.
c. Debit Office Supplies Expense, $2,400; Credit Office Supplies, $2,400.
d. Debit Office Supplies, $1,600; Credit Office Supplies Expense, $1,600. - C. Debit
Office Supplies Expense, $2,400; Credit Office Supplies, $2,400.
Southeastern Louisiana University sold season tickets for the 2013 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 receipt of cash was properly recorded as Unearned
Ticket Revenue. The company issues financial statements on a monthly basis. The adjusting
journal entry on September 30
a. is not required. No adjusting entries will be made until the end of the season in
November.
b. will include a debit to Cash and a credit to Ticket Revenue for $160,000.
, c. will include a debit to Unearned Ticket Revenue and a credit to Ticket Revenue for
$60,000.
d. will include a debit to Ticket Revenue and a credit to Unearned Ticket Revenue for
$100,000.
e. will include a debit to Ticket Revenue and a credit to Unearned Ticket Revenue for
$60,000. - C. will include a debit to Unearned Ticket Revenue and a credit to Ticket
Revenue for
$60,000.
Maple Tree Inc. purchased a 12-month insurance policy on March 1, 2013 for $900 and
recorded it properly as an asset. Coverage is effective immediately. At March 31, 2013, the
adjusting journal entry needed will include
a. a debit to Prepaid Insurance and a credit to Cash for $900.
b. a debit to Prepaid Insurance and a credit to Insurance Expense for $825.
c. a debit to Insurance Expense and a credit to Prepaid Insurance for $75
d. a debit to Insurance Expense and a credit to Cash for $75.
e. a debit to Prepaid Insurance and a credit to Insurance Expense for $75. - C. a debit to
Insurance Expense and a credit to Prepaid Insurance for $75
Deb Smiley, CPA, has billed her clients for services performed. She subsequently receives
payments from her clients. What entry will she make upon receipt of the cash from the clients?
a. Debit Unearned Revenue and credit Service Revenue
b. Debit Cash and credit Accounts Receivable
c. Debit Accounts Receivable and credit Service Revenue
d. Debit Cash and credit Service Revenue
e. Debit Cash and credit Unearned Revenue. - B. Debit Cash and credit Accounts
Receivable
Cathy Cline, an employee of Merlin Company, will not receive her paycheck until April 2, 2013.
