Please solve all the MCQ with detailed answer for both correct and incorrect answers (Answers to the Self-Study Questions dare available at the end of this chapter.)1. A firm, using the allowance method of recording credit losses, wrote off a customer's accountin the amount of $500. Later, the customer paid the account. The firm reinstated the accountby means of a journal entry and then recorded the collection. What is the result of theseprocedures?a. Increases total assets by S500b. Decreases total assets by $500c. Decreases total assets by S1,000d. Has no effect on total assetsL01, 2LO22. A firm has accounts receivable of $90,000 and a debit balance of $900 in the Allowance forDoubtful Accounts. Two-thirds of the accounts receivable are current and one-third is past due.The firm estimates that two percent of the current accounts and five percent of the past dueaccounts will prove to be uncollectible. The adjusting entry to provide for the bad debts expenseunder the aging method should be for what amount?a. $2,700b. $3,600c. $1,800d. $4,5003. A firm receives a six-month note from a customer. The note has a face amount of $4,000 and aninterest rate of nine percent. What is the total amount of interest to be received?a. $1,080b. $30c. $360d. $180LO4ATRC4. A business has net sales of $60,000, a beginning balance in Accounts Receivable of $5,000, andan ending balance in Accounts Receivable of $7,000. What is the company's accounts receivableturnover?10.0b. 12.0c. 8.6d. 9.2LO5a.5. A business has an accounts receivable turnover of ten. What is the company's average collectionperiod?36.0LOSa.b.30.8c.34.6d. 36.5

Allowance method is referring to record expected bad debts that can be generated from credit revenue…

1. A firm, using the allowance method of recording credit losses, wrote off a customer's account in the amount of $500. Later, the customer paid the account. The firm reinstated the account by means of a journal entry and then recorded the collection. What is the result of these procedures? a. Increases total assets by $500 b. Decreases total assets by $500 Decreases total assets by $1,000 d. Has no effect on total assets C.

1. A firm, using the allowance method of recording credit losses, wrote off a customer's account in the amount of $500. Later, the customer paid the account. The firm reinstated the account by means of a journal entry and then recorded the collection. What is the result of these procedures? a. Increases total assets by $500 b. Decreases total assets by $500 Decreases total assets by $1,000 d. Has no effect on total assets C.

College Accounting (Book Only): A Career Approach

13th Edition

ISBN:9781337280570

Author:Scott, Cathy J.

Publisher:Scott, Cathy J.

Chapter3: The General Journal And The General Ledger

Section: Chapter Questions

Problem 6E: The bookkeeper for Nevado Company has prepared the following trial balance: The bookkeeper has asked...

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On January 24, 20Y8, Niche Consulting collected $5,700 it had hilled its clients for services rendered on December 31, 20Y7. How would you record the January 24 transaction, using the accrual basis? A. Increase Cash, $5,700; decrease Fees Earned, $5,700 B. Increase Accounts Receivable, $5,700; increase Fees Earned, $5,700 C. Increase Cash, $5,700; decrease Accounts Receivable, $5,700 D. Increase Cash, $5,700; increase Fees Earned, $5,700
The bookkeeper for Nevado Company has prepared the following trial balance: The bookkeeper has asked for your help. In examining the companys journal and ledger, you discover the following errors. Use this information to construct a corrected trial balance. a. The debits to the Cash account total 8,000, and the credits total 3,300. b. A 500 payment to a creditor was entered in the journal correctly but was not posted to the Accounts Payable account. c. The first two numbers in the balance of the Accounts Receivable account were transposed when the balance was copied from the ledger to the trial balance. d. The 1,500 amount withdrawn by the owner for personal use was debited to Miscellaneous Expense by mistakeit was correctly credited to Cash.
What Would You Say? A fellow accounting student has difficulty understanding how the fundamental accounting equation stays in balance when a compound entry with one debit and two credits is recorded. Consider, for example, that a business bought equipment for 7,000, paid 3,000 in cash, and placed the remainder on account. This means that there are two credits and one debitone debit and one credit on the left side of the equation and the other credit on the right side of the equation. Explain to your fellow student how the equation stays in balance.
Analyze Trusty Companys trial balance and the additional information provided to determine the following: A. what is causing the trial balance to be out of balance B. any other errors that require corrections that are identified during your analysis C. the effect (if any) that correcting the errors will have on the accounting equation A review of transactions revealed the following facts: A service fee of $18,000 was earned (but not yet collected) by the end of the period but was accidentally not recorded as revenue at that time. A transposition error occurred when transferring the account balances from the ledger to the trial balance. Salaries expense should have been listed on the trial balance as $64,500 but was inadvertently recorded as $46,500. Two machines that cost $9,000 each were purchased on account but were not recorded in company accounting records.
A fellow accounting student has difficulty understanding how the fundamental accounting equation stays in balance when a compound entry with one debit and two credits is recorded. Consider, for example, that a business bought equipment for 15,000, paid 5,000 in cash, and placed the remainder on account. This means that there are two credits and one debitone debit and one credit on the left side of the equation and the other credit on the right side of the equation. Explain to your fellow student how the equation stays in balance.
Post the following February transactions to T-accounts for Accounts Receivable and Cash, indicating the ending balance (assume no beginning balances in these accounts). A. provided legal services to customers for cash, $5,600 B. provided legal services to customers on account, $4,700 C. collected cash from customer accounts, $3,500
The Colby Group has the following unadjusted trial balance as of August 31, 2019: The debit and credit totals are not equal as a result of the following errors: a. The cash entered on the trial balance was understated by 6,000. b. A cash receipt of 5,600 was posted as a debit to Cash of 6,500. c. A debit of 11,000 to Accounts Receivable was not posted. d. A return of 150 of defective supplies was erroneously posted as a 1,500 credit to Supplies. e. An insurance policy acquired at a cost of 1,200 was posted as a credit to Prepaid Insurance. f. The balance of Notes Payable was understated by 20,000. g. A credit of 4,800 in Accounts Payable was overlooked when determining the balance of the account. h. A debit of 7,000 for a withdrawal by the owner was posted as a credit to Terry Colby, Capital. i. The balance of 58,100 in Rent Expense was entered as 51,800 in the trial balance. j. Gas, Electricity, and Water Expense, with a balance of 24,150, was omitted from the trial balance. Instructions 1. Prepare a corrected unadjusted trial balance as of August 31, 2019. 2. Does the fact that the unadjusted trial balance in (1) is balanced mean that there are no errors in the accounts? Explain.
Analyzing the Accounts The controller for Summit Sales Inc. provides the following information on transactions that occurred during the year: a. Purchased supplies on credit, $18,600 b. Paid $14,800 cash toward the purchase in Transaction a c. Provided services to customers on credit1 $46,925 d. Collected $39,650 cash from accounts receivable e. Recorded depreciation expense, $8,175 f. Employee salaries accrued, $15,650 g. Paid $15,650 cash to employees for salaries earned h. Accrued interest expense on long-term debt, $1,950 i. Paid a total of $25,000 on long-term debt, which includes $1.950 interest from Transaction h j. Paid $2,220 cash for l years insurance coverage in advance k. Recognized insurance expense, $1,340, that was paid in a previous period l. Sold equipment with a book value of $7,500 for $7,500 cash m. Declared cash dividend, $12,000 n. Paid cash dividend declared in Transaction m o. Purchased new equipment for $28,300 cash. p. Issued common stock for $60,000 cash q. Used $10,700 of supplies to produce revenues Summit Sales uses the indirect method to prepare its statement of cash flows. Required: 1. Construct a table similar to the one shown at the top of the next page. Analyze each transaction and indicate its effect on the fundamental accounting equation. If the transaction increases a financial statement element, write the amount of the increase preceded by a plus sign (+) in the appropriate column. If the transaction decreases a financial statement element, write the amount of the decrease preceded by a minus sign (-) in the appropriate column. 2. Indicate whether each transaction results in a cash inflow or a cash outflow in the Effect on Cash Flows column. If the transaction has no effect on cash flow, then indicate this by placing none in the Effect on Cash Flows column. 3. For each transaction that affected cash flows, indicate whether the cash flow would be classified as a cash flow from operating activities, cash flow from investing activities, or cash flow from financing activities. If there is no effect on cash flows, indicate this as a non-cash activity.
For each of the transactions, state which special journal (sales journal, cash receipts journal, cash disbursements journal, purchases journal, or general journal) and which subsidiary ledger (Accounts Receivable, Accounts Payable, or neither) would be used in recording the transaction. A. Paid utility bill B. Sold inventory on account C. Received but did not pay phone bill D. Bought inventory on account E. Borrowed money from a bank F. Sold old office furniture for cash G. Recorded depreciation H. Accrued payroll at the end of the accounting period I. Sold inventory for cash J. Paid interest on bank loan
Jetson Corp. performed services for a customer worth $500 and the customer will pay for those services next month. When the transaction was journalized, however, Jetson's accountant debited the "Cash" account and credited the "Service Revenue" account for $500 each. Question: As a result of this error, which of the following statements is/are true? (check all that apply) Select one or more: a. Total debits and total credits will still equal but the balance sheet equation will not be satisfied. b. Total debits and total credits will still equal and the balance sheet equation will be satisfied. c. The "Accounts Receivable" account balance will be too low (understated) while the "Cash" account balance will be too high (overstated). d. The "Accounts Receivable" account balance will be too low (understated) while the "Service Revenue" account balance will be too high (overstated).
You have set up a new company with a correct chart of accounts. For the 4 accounts listed below indicate which accounts require History amounts with a negative sign (-) Rent Expense Bank Loan Payment Accumulated Amortization-Equipment Purchase Returns $100.00
In the trial balance below, total debits do not equal total credits. Find and correct the likely error(s) to bring the totals into balance. Debit Credit Cash 158,000 Office Supplies 25,000 Equipment 180,000 Accum. Depreciation—Equipment 44,000 Accounts Payable 47,700 Wages Payable 13,000 W. Shannon, Capital 20,970 W. Shannon, Withdrawals 25,000 Entertainment Revenue 338,000 Rent Expense 26,800 Gas and Oil Expense 3,000 Wage Expense 219,700 Advertising Expense 12,500 Legal Expense 11,400 Totals 636.400 488,670 Note:- Do not provide handwritten solution. Maintain accuracy and quality in your answer. Take care of plagiarism. Answer completely. You will get up vote for sure.