Question 1

Lucent Electrical Repair performs services costing $3,000 on January 12 and invoices the customer.
-Lucent receives the $3,000 on January 31.What entry is made on January 31 when the cash was received?
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Accepted Answer

The answer of Lucent Electrical Repair performs services costing $3,000...

Question 2

Hank's Tax Planning Service bought computer equipment for $19,200 on January 1,2012.It has an estimated useful life of 4 years.Hank records depreciation monthly.As of September 30,2012,Hank has recorded total depreciation expense for this equipment of:
A) $2,400.
B) $3,600.
C) $400.
D) $14,400.

Accepted Answer

B) Calculations: $19,200/48 = $400 × 9 = $3,600

Question 3

What type of account is Accumulated depreciation and what is its normal balance?
A) Revenue and debit
B) Expense and debit
C) Contra asset and credit
D) Liability and credit

Accepted Answer

Accumulated Depreciation is a contra asset account and has a credit balance. This account offsets the asset account it is associated with, reducing the net book value of the asset.

Question 4

Hank's Tax Planning Service has the following plant assets: Communications equipment: Cost,$4,800; useful life 8 years
Furniture: Cost,$15,840; useful life 12 years
Computer equipment: Cost,$10,080; useful life 4 years
-
Hank's monthly depreciation expense is:
A) $2,560.
B) $4,440.
C) $210.
D) $370.

Accepted Answer

D) Calculations: $4,800/96 = $50
$15,840/144 = $110
$10,080/48 = $210
$50 + $110 + $210 = $370

Question 5

Hank's Tax Planning Service has a beginning balance in the Supplies account of $800.During the current month,he purchased an additional $2,000 of supplies.At the end of the month,he had $250 of supplies left.The amount of supply expense to be recorded for the month is:
A) $1,750.
B) $2,000.
C) $250.
D) $2,550.

Accepted Answer

D) Calculations: $800 + $2,000 - $250 = $2,550

Question 6

Hank's Tax Planning Service started business in January,2012.He rented an office for $900 a month starting January 1.He prepaid the rentals through June 30.He makes accrual adjustments monthly.As of April 30,Hank's ledger shows a balance in Prepaid Rent of how much?
A) $1,800
B) $900
C) $2,700
D) $5,400

Accepted Answer

A) Calculations: $900 × 6 = $5,400 × 2/6 = $1,800

Question 7

A company received $5,000 for 100 one-year subscriptions on July 1.The journal entry to record this cash receipt would include a:
A) debit to Unearned revenue.
B) debit to Prepaid expenses.
C) credit to Unearned revenue.
D) credit to Cash.

Accepted Answer

The company received cash for subscriptions, which are an obligation to deliver goods or services in the future, so it should be recorded as unearned revenue until the services are provided. Therefore, the journal entry would include a credit to Unearned revenue.

Question 8

On July 1,Alpha Company prepaid rent for a small equipment storage area.They paid $12,000 to rent the area for the period of July 1 through the end of the year.Please provide the journal entry needed on July 1 when the payment is made.
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Accepted Answer

The answer of On July 1,Alpha Company prepaid rent for...

Question 9

Lucent Electrical Repair performs services costing $3,000 on January 12 and invoices the customer.Lucent receives the $3,000 on January 31.
-What entry is made on January 12 when services were rendered?
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Accepted Answer

The answer of Lucent Electrical Repair performs services costing $3,000...

Question 10

Real Losers,a diet magazine,collected $360,000 in subscription revenue in May.Each subscriber will receive an issue of the magazine for each of the next 12 months,beginning with the June issue.
-The company uses the accrual method of accounting.What entry is recorded when the cash is collected in May?
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Accepted Answer

The answer of Real Losers,a diet magazine,collected $360,000 in subscription...

Question 11

Hank's Tax Planning Service has the following plant assets: Communications equipment: Cost,$4,800; useful life 8 years
Furniture: Cost,$15,840; useful life 12 years
Computer equipment: Cost,$10,080; useful life 4 years
-
Hank's monthly depreciation entry will include a:
A) debit to depreciation expense of $210.
B) credit to depreciation expense of $370.
C) debit to Accumulated Depreciation of $210.
D) credit to Accumulated Depreciation of $370.

Accepted Answer

D) Calculations: $4,800/96 = $50
$15,840/144 = $110
$10,080/48 = $210
$50 + $110 + $210 = $370

Question 12

What is the term for the difference between the Equipment account and the Accumulated depreciation account?
A) Contra asset
B) Market value
C) Historical cost
D) Book value

Accepted Answer

The term for the difference between the Equipment account and the Accumulated depreciation account is book value. Book value represents the net amount of an asset that is recorded on the balance sheet, calculated by subtracting the accumulated depreciation from the equipment account.

Question 13

Hank's Tax Planning Service bought communications equipment for $7,200 on January 1,2012.It has an estimated useful life of 5 years.Hank records depreciation monthly.
-As of June 30,2012,the balance in the Accumulated depreciation account for this equipment is:
A) $1,440.
B) $600.
C) $120.
D) $720.

Accepted Answer

D) Calculations: $7,200/60 = $120 × 6 = $720

Question 14

Hank's Tax Planning Service bought communications equipment for $7,200 on January 1,2012.It has an estimated useful life of 5 years.Hank records depreciation monthly
-.As of June 30,2012,Hank's balance sheet will show book value for this equipment of:
A) $6,480.
B) $7,200.
C) $120.
D) $720.

Accepted Answer

A) Calculations: $7,200/60 = $120 × 6 =$720; $7,200 - $720 = $6480

Question 15

Chelsea Services Company pays its staff their wages every Friday.The staff works a five-day work week and the payroll amounts to $25,000 per week.The last day of January falls on a Tuesday,and an adjustment entry is needed to accrue wage expense as of January 31.Please provide that entry.
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Accepted Answer

The answer of Chelsea Services Company pays its staff their...

Question 16

Real Losers,a diet magazine,collected $360,000 in subscription revenue in May.Each subscriber will receive an issue of the magazine for each of the next 12 months,beginning with the June issue.
-The company uses the accrual method of accounting.What adjusting entry is needed at June 30?
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Accepted Answer

The answer of Real Losers,a diet magazine,collected $360,000 in subscription...

Question 17

What type of account is Unearned revenue and what is its normal balance?
A) Liability and credit
B) Asset and credit
C) Revenue and debit
D) Asset and debit

Accepted Answer

Unearned revenue is a liability account, as it represents income that has been received but not yet earned. Furthermore, the normal balance for a liability account is a credit.

Question 18

What type of account is Prepaid rent and what is its normal balance?
A) Expense and debit
B) Liability and credit
C) Revenue and credit
D) Asset and debit

Accepted Answer

Prepaid rent is an asset account because it represents a future economic benefit (i.e. rent that has been paid in advance). The normal balance for asset accounts is debit, so the correct answer is D.

Question 19

On July 1,Alpha Company prepaid rent for a small equipment storage area in the amount of $12,000 for the period of July 1 through the end of the year.At the end of July,an adjustment entry is needed.Please provide that adjustment entry.
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Accepted Answer

The answer of On July 1,Alpha Company prepaid rent for...

Question 20

On April 1,Balsa Company purchased $800 of office supplies.At the end of April,they took a count of the remaining supplies and found that there were $150 of supplies left.Please provide the adjusting entry needed at the end of April.
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Accepted Answer

The answer of On April 1,Balsa Company purchased $800 of...

Quiz 3: The Adjusting Process

Lucent Electrical Repair performs services costing $3,000 on January 12 and invoices the customer. -Lucent receives the $3,000 on January 31.What entry is made on January 31 when the cash was received? $\begin{array} { | l | r | r | } \hline \quad\quad\quad&\quad&\quad \\\hline \\\hline\end{array}$

Hank's Tax Planning Service bought computer equipment for $19,200 on January 1,2012.It has an estimated useful life of 4 years.Hank records depreciation monthly.As of September 30,2012,Hank has recorded total depreciation expense for this equipment of: A) $2,400. B) $3,600. C) $400. D) $14,400.

What type of account is Accumulated depreciation and what is its normal balance? A) Revenue and debit B) Expense and debit C) Contra asset and credit D) Liability and credit

Hank's Tax Planning Service has the following plant assets: Communications equipment: Cost,$4,800; useful life 8 years Furniture: Cost,$15,840; useful life 12 years Computer equipment: Cost,$10,080; useful life 4 years - Hank's monthly depreciation expense is: A) $2,560. B) $4,440. C) $210. D) $370.

A company received $5,000 for 100 one-year subscriptions on July 1.The journal entry to record this cash receipt would include a: A) debit to Unearned revenue. B) debit to Prepaid expenses. C) credit to Unearned revenue. D) credit to Cash.

Lucent Electrical Repair performs services costing $3,000 on January 12 and invoices the customer.Lucent receives the $3,000 on January 31. -What entry is made on January 12 when services were rendered? $\begin{array} { | l | r | r | } \hline \quad\quad\quad&\quad&\quad \\\hline \\\hline\end{array}$

What is the term for the difference between the Equipment account and the Accumulated depreciation account? A) Contra asset B) Market value C) Historical cost D) Book value

Hank's Tax Planning Service bought communications equipment for $7,200 on January 1,2012.It has an estimated useful life of 5 years.Hank records depreciation monthly. -As of June 30,2012,the balance in the Accumulated depreciation account for this equipment is: A) $1,440. B) $600. C) $120. D) $720.

Hank's Tax Planning Service bought communications equipment for $7,200 on January 1,2012.It has an estimated useful life of 5 years.Hank records depreciation monthly -.As of June 30,2012,Hank's balance sheet will show book value for this equipment of: A) $6,480. B) $7,200. C) $120. D) $720.

What type of account is Unearned revenue and what is its normal balance? A) Liability and credit B) Asset and credit C) Revenue and debit D) Asset and debit

What type of account is Prepaid rent and what is its normal balance? A) Expense and debit B) Liability and credit C) Revenue and credit D) Asset and debit