ADMS 2500 Study Guide - Deferral, Accounts Payable, Retained Earnings

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violeteel391

29 Mar 2014

School

York University

Department

Administrative Studies

Course

ADMS 2500

Professor

all

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ADMS 2500 Full Course Notes

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Document Summary

Subscription cash debit , unearned revenue credit (revenue will be recorded in future period). Shirts >> a/c receivable debit , sales revenue credit. (will be recorded in future). Callaho inc. pays a invoice from a consulting firm for services received and recorded in accounts payable in october. Retained earnings + a/c payable a/ receivable to get cash basis income. To calculate accrual basis income (add all revenues expenses). When does it effects cash and when does it effects retained earnings?? (bills >>>> retained earnings) Billed received today to be paid >>> + a/c payable and - retained earnings. Collected regarding customer"s credit >>> + cash accounts receivable. Bill received and paid >>>> - cash retained earnings. Interest collected >>> + cash + retained earnings. Rent received >>>>> + cash + retained earnings. Collected >>>> + cash + retained earnings. Investment accounts receivable(no effect) = share capital. Billed a customer ,750 as fees for services provided today.

Related Questions

NEED ANSWERS ASAP

Question 23

If a resource has been consumed but a bill hasnot been received at the end of the accountingperiod, 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 isreceived.

3 points

Question 24

Prepaid expenses are

		paid and recorded in an asset account before they are used orconsumed.
		paid and recorded in an asset account after they are used orconsumed.
		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 performedand credits a liability account, the adjusting entry needed afterthe 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 AccountsReceivable.

3 points

Question 26

The preparation of adjusting entries is

		straight forward because the accounts that need adjustment willbe out of balance.
		often an involved process requiring the skills of aprofessional.
		only required for accounts that do not have a normalbalance.
		optional when financial statements are prepared.

3 points

Question 27

On January 1 of the current year, Doolittle Company purchasedfurniture for $7,560. The company expects to use the furniture for3 years. The asset has no salvage value. The book value of thefurniture 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 onMarch 1 of the current year for $1,800. At March 31, the adjustingjournal 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.

Question 11 pts

Which of the following terms describe the types of adjusting entries?

expenses and revenues

prepaid expenses and prepaid revenues

deferrals and accruals

deferrals and depreciation

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Question 21 pts

Unearned Revenue is always

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Question 31 pts

The adjusted trial balance shows

assets, liabilities, and common stock only

revenues and expenses only

amounts that may be out of balance

amounts that are ready for the financial statements

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Question 41 pts

Which of the following accounts is not closed?

Salaries Expense

Dividends

Accumulated Depreciation, Equipment

Service Revenue

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Question 51 pts

Given the following adjusted trial balance:

	Debit	Credit
Cash	$1,562
Accounts receivable	2,098
Inventory	3,124
Prepaid rent	86
Equipment	300
Accumulated depreciation-equipment		52
Accounts payable		82
Unearned service revenue		122
Common stock		206
Retained earnings		6,610
Service revenue		268
Interest revenue		56
Salaries and wages expense	160
Travel expense	66
Total	$7,396	$7,396

Net income for the year is

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Question 61 pts

Wolf Pack Services receives $10,000 cash in advance of services performed and credits a liability account. Which of the following adjusting entries will need to be made after the services are performed?

Accounts		Debit	Credit
Unearned Service Revenue		10,000
	Cash		10,000

Accounts		Debit	Credit
Unearned Service Revenue		10,000
	Service Revenue		10,000

Accounts		Debit	Credit
Unearned Service Revenue		10,000
	Prepaid Expense		10,000

Accounts		Debit	Credit
Unearned Service Revenue		10,000
	Accounts Receivable		10,000

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Question 71 pts

Accumulated Depreciation is a(n)

liability account

stockholderâs equity account

contra asset account

asset account

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Question 81 pts

Kimmel Companyâs accountant makes the following entry to record $2,000 of depreciation expense on the companyâs equipment on December 31, 2013:

	Dr.	Cr.
Depreciation Expense	2,000
Cash		2,000

The effect of this entry is to

adjust the accounts to their proper amounts on December 31, 2013

understate total assets on the balance sheet as of December 31, 2013

overstate the book value of the depreciable assets at December 31, 2013

understate the book value of the depreciable assets as of December 31, 2013

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Question 91 pts

The weekly payrool of Wolverine Corporation is $3,000. Employees work five days per week, Monday through Friday. December 31, 2013, the end of the fiscal year, is a Tuesday. Wolverine Corporation will not pay its employees for the full week until Friday, its normal payday. Wolverine Corporation will make which of the following adjusting entries on Tuesday, December 31?

Accounts	Debit	Credit
Salaries Payable	1,200

Accounts	Debit	Credit
Salaries Expenses	1,200
Accumulated Salaries		1,200

Accounts	Debit	Credit
Salaries Expense	1,200
Cash		1,200

Accounts	Debit	Credit
Salaries Expense	1,200
Salaries Payable		1,200

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Question 101 pts

Which of the following statements regarding closing entries is true?

Closing entries bring the Retained Earnings account to its correct ending balance.

Closing entries transfer unearned revenues, expenses, and dividends to retained earnings.

Closing entries zero out the assets, expenses, and dividends accounts to prepare them for the next accounting period.

All of these statements are true.

fuchsiamuskrat244

Question 16

Corresponds to CLO 3(d) Hemmingway Corporation paid salaries of$5,000 and advertising expense of $2,000. Which of the followingjournal entries correctly records these expenses?

		Debit: Cash $7,000 Credit: Salaries/Wages Expense$5,000 Credit: Advertising Expense $2,000
		Debit: Salaries/Wages Expense$5,000 Debit: Advertising Expense $2,000 Credit: Cash$7,000
		Debit: Salaries/Wages Expense$5,000 Debit: Advertising Expense $2,000 Credit: Salaries/Wages Payable$5,000 Credit: Accounts Payable$2,000
		Debit: Salaries/Wages Expense$5,000 Debit: Advertising Expense $2,000 Credit: Cash$8,000

3 points

Question 17

Corresponds to CLO 4(a) Which of the following statements iscorrect regarding accrued revenues and unearned revenues, beforeadjusting entries have been made?

		Accrued revenues have not been earned and unearned revenues havebeen earned.
		Accrued revenues have been paid and unearned revenues havenot.
		Accrued revenues have not been recorded and unearned revenueshave been recorded.
		Accrued revenues have been recorded and unearned revenues havebeen recorded.

3 points

Question 18

Corresponds to CLO 4(b) Hudson Law Corporation received $5,500cash for legal services to be rendered in the future. The fullamount was credited to the liability account Unearned ServiceRevenue. At the end of the period, Hudson determines that $3,000 ofthe legal services have been rendered. The appropriate adjustingjournal entry to be made at the end of the period is:

		debit Unearned Service Revenue, $3,000; credit Cash, $3,000.
		debit Unearned Service Revenue, $3,000; credit Service Revenue,$3,000.
		debit Unearned Service Revenue, $2,500; credit Service Revenue,$2,500.
		debit Service Revenue, $2,500; credit Unearned Service Revenue,$2,500.

3 points

Question 19

Corresponds to CLO 4(c) Ace Corporation purchased officesupplies costing $13,000 and debited Office Supplies for the fullamount. At the end of the accounting period, a physical count ofoffice supplies revealed $2,700 still on hand. The appropriateadjusting journal entry to be made at the end of the period is:

		debit Office Supplies Expense, $10,300; credit Office Supplies,$10,300.
		debit Office Supplies, $10,300; credit Office Supplies Expense,$10,300.
		debit Office Supplies Expense, $2,700; credit Office Supplies,$2,700.
		debit Office Supplies, $2,700; credit Office Supplies Expense,$2,700.

3 points

Question 20

Corresponds to CLO 4(d) On September 1, Northgate paid $18,000to Evans Management Company for 12 months of rent beginning onSeptember 1. The appropriate journal entry was made to record thistransaction. If financial statements are prepared for the 9 monthsended September 30, the adjusting entry to be made by Northgateis:

		debit Rent Expense, $13,500; credit Prepaid Rent, $13,500.
		debit Prepaid Rent, $1,500; credit Rent Revenue, $1,500.
		debit Prepaid Rent, $1,500; credit Rent Expense, $1,500.
		debit Rent Expense, $1,500; credit Prepaid Rent, $1,500.

3 points

Question 21

Corresponds to CLO 5(a) Lennox Corporation purchased a newdelivery truck for 35,000. The sales taxes are $2,700. The logo ispainted on the side of the truck for $800. The truck's annuallicense is $200. Annual insurance on the truck is $1,300. Whatshould Lennox record as the cost of the new truck?

		$40,000
		$38,500
		$37,700
		$35,000

3 points

Question 22

Corresponds to CLO 5(b) On April 1, 2013, Ballard Corporationpurchased equipment for $65,000. It is estimated that the equipmentwill have a $5,000 salvage value at the end of its 5 year usefullife. If Ballard uses the straight-line method of depreciation,what is the accumulated depreciation at December 31, 2013?

		$13,000
		$12,000
		$9,750
		$9,000

3 points

Question 23

Corresponds to CLO 5(c) Tyree Company purchased equipment with acost of $90,000 and an estimated salvage value of $18,000. Theequipment is expected to produce 150,000 units over its estimateduseful life of 10 years. If Tyree uses the units-of-activitymethod, what is the depreciation cost per unit to be used incalculating depreciation?

		$1.67
		$0.48
		$2.08
		$0.60

3 points

Question 24

Corresponds to CLO 5(d) Kerns Company purchased equipment with acost of $200,000 and an estimated salvage value of $10,000. Theequipment has an estimated useful life of 10 years. If Kerns usesthe double-declining balance method, what is the annualdepreciation rate to be used in calculating depreciation?

		5%
		10%
		20%
		40%

3 points

Question 25

Corresponds to CLO 6(a) Marshall Machinery made a sale for$150,000 on March 31. The customer is sent a statement on April 6and payment is received on April 15. Marshall prepares March'smonthly internal financial statements on April 20. Marshall followsGAAP and applies the revenue recognition principle. When is the$150,000 considered to be earned?

		March 31
		April 6
		April 15
		April 20

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ADMS 2500 Study Guide - Deferral, Accounts Payable, Retained Earnings

ADMS 2500 Full Course Notes

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