accounting ch 4
Unearned revenue is classified as a
liability
On January 1, 2016, Leardon Inc. purchased equipment for $25,000. The company is depreciating the equipment at the rate of $1,000 per month. At January 31, 2017, the balance in Book Value is: (10b)
$12,000 debit.$12,000 debit.
On January 1, 2016, Leardon Inc. purchased equipment for $25,000. The company is depreciating the equipment at the rate of $1,000 per month. At January 31, 2017, the balance in Accumulated Depreciation is: (10)
$13,000 credit.
Fleet Services Company purchased equipment for $12,000 on January 1, 2017. The company expects to use the equipment for 5 years. It has no salvage value. What balance would be reported on the December 31, 2017 balance sheet for Accumulated Depreciation? (15)
$2,400
At December 31, 2017, before any year-end adjustments, Janus Company's Prepaid Insurance account had a balance of $4,200. It was determined that $1,800 of the Prepaid Insurance had expired. The adjusted balance for Prepaid Insurance for the year would be: (11)
$2,400.
On January 1, 2017, M Johanson Company Purchased equipment for $54,000. The company is depreciating the equipment at the rate $750 per month the book value of the equipment at december 31 2017 is (3)
$45,000
What is net PPE for Apple in 2019?
$37 billion
La more company had the following transactions during 2016 - sales of $9,000 on account - collected $4,000 for Services to be performed in 2017 - purchased airline tickets for $500 in december for a trip to take place in 2017 What is La More's 2016 net income using accural accounting? (2)
$5,250
The balance in the prepaid rent account before adjustment at the end of the year is $12,000, which represents four months' rent paid on December 1. The adjusting entry required on December 31 is (6)
Debit rent Expense, 4,000; credit prepaid rent, $4,000
Greese Company purchased office supplies costing $7,000 and debited Supplies for the full amount. At the end of the accounting period, a physical count of office supplies revealed $2,500 still on hand. The appropriate adjusting journal entry to be made at the end of the period would be: (4)
Debit supplies expense, $4,500; credit supplies, 4,500
if a business has received cash in advance of services performed and credits a liability account the adjusting entry needed after the services are performed will be
Debit unearned service revenue and credit service revenue
Baden Industries borrows $20,000 at 7% annual interest for six months on October 1st, 2017. Which is the appropriate entry to accrue interest if Baden employs a December 31st, 2017, fiscal year? (18)
Interest Expense $350 Interest Payable $350
Ye Olde Christmas shop signs a three-month note payable to help finance increases in inventory for the Christmas shopping season. The note is signed on October 1 in the amount of $30,000 with annual interest of 6%. What is the adjusting entry to be made on December 31 for the interest expense accrued to that date, if no entries have been made previously for the interest? (20)
Interest Expense 450 Interest Payable 450
Which of the following would not result in unearned revenue? (14)
Services performed on account.
Oakville Inc. purchased a 12-month insurance policy on March 1, 2017 for $2,400. At March 31, 2017, the adjusting journal entry to record expiration of this asset will include: (16)
a debit to Insurance Expense and a credit to Prepaid Insurance for $200.
The difference between the balance of a plant asset account and the related accumulated depreciation account is termed:
book value.
The Harris Company purchased equipment for $15,000 on December 1. It is estimated that annual depreciation on the computer will be $3,000. If financial statements are to be prepared on December 31, the company should make the following adjusting entry: (8)
debit Depreciation Expense, $250; credit Accumulated Depreciation, $250.
Raxon Company borrowed $50,000 from the bank signing a 6%, 3-month note on September 1. Principal and interest are payable to the bank on December 1. If the company prepares monthly financial statements, the adjusting entry that the company should make for interest on September 30, would be: (19)
debit Interest Expense, $250; credit Interest Payable, $250.
Leyland Realty Company received a check for $18,000 on July 1, which represents a 6-month advance payment of rent on a building it rents to a client. Unearned Rent Revenue was credited for the full $18,000. Financial statements will be prepared on July 31. Leyland Realty should make the following adjusting entry on July 31: (9)
debit Unearned Rent Revenue, $3,000; credit Rent Revenue, $3,000.
Under the accrual basis of accounting
events that change a company's financial statements are recognized in the period they occur rather than in the period in which cash is paid or received.