Prepare an answer sheet with the column headings shown here. For each of the following transactions or adjustments, indicate the effect of the transaction or adjustment on the appropriate balance sheet category and on net income by entering for each account affected the account name and amount and indicating whether it is an addition (+) or a subtraction (-). Transaction a has been done as an illustration. Net income is not affected by every transaction. In some cases only one column may be affected because all of the specific accounts affected by the transaction are included in that category. a. Accrued interest revenue of $30 on a note receivable. b. Paid $9,300 in cash as an advance rent payment for a short-term lease that covers the next three months. c. Recorded an adjustment at the end of the first month (in b) to show the amount of rent "used" in the month. d. Inventory was acquired on account and recorded for $4,810. Perpetual inventory is maintained. e. It was later determined…

Prepare an answer sheet with the column headings shown here. For each of the following transactions or adjustments, indicate the effect of the transaction or adjustment on the appropriate balance sheet category and on net income by entering for each account affected the account name and amount and indicating whether it is an addition (+) or a subtraction (-). Transaction a has been done as an illustration. Net income is not affected by every transaction. In some cases only one column may be affected because all of the specific accounts affected by the transaction are included in that category. a. Accrued interest revenue of $30 on a note receivable. b. Determined that the Allowance for Bad Debts account balance should be increased by $2,050. c. Recognized bank service charges of $22 for the month. d. Received $29 cash for interest accrued in a prior month. e. Purchased 3 units of a new item of inventory on account at a cost of $31 each. Perpetual inventory is maintained. f. Purchased…

Prepare an answer sheet with the column headings shown here. For each of the following transactions or adjustments, indicate the effect of the transaction or adjustment on the appropriate balance sheet category and on net income by entering for each account affected the account name and amount and indicating whether it is an addition (+) or a subtraction (-). Transaction a has been done as an illustration. Net income is not affected by every transaction. In some cases only one column may be affected because all of the specific accounts affected by the transaction are included in that category. a. Accrued interest revenue of $30 on a note receivable. b. Determined that the Allowance for Bad Debts account balance should be decreased by $7,200 because expense during the year had been overestimated. c. Wrote off an account receivable of $2,600. d. Received cash from a customer in full payment of an account receivable of $2,500 that was paid within the 2% discount period. A Cash Discount…

Which statement about the worksheet is not correct? A.    Resulting net income or net loss is reflected in the worksheet B.    The difference betwwen the total debits and total credits in the income statement column has to be the same as the difference between the total debits and total credits in the balance sheet columns C.    The adjusting entries are entered in the worksheet D.    The total debits and total credits in the income and income statements columns are not the same before and after the recognition of the net income or net loss

Consider the following transactions associated with accounts receivable and the allowance for uncollectible accounts.Required:For each transaction, indicate whether it would increase (I), decrease (D), or have no effect (NE) on the account totals. (Hint: Make sure the accounting equation, Assets = Liabilities + Stockholders’ Equity, remains in balance after each transaction.)

Listed below are eight technical accounting terms introduced in this chapter:Realization principle CreditTime period principle Accounting periodMatching principle ExpensesNet income Accounting cycleEach of the following statements may (or may not) describe one of these technical terms. Foreach statement, indicate the term described, or answer “None” if the statement does not correctlydescribe any of the terms.a. The span of time covered by an income statement.b. The sequence of accounting procedures used to record, classify, and summarize accountinginformation.c. The traditional accounting practice of resolving uncertainty by choosing the solution thatleads to the lowest amount of income being recognized.d. An increase in owners’ equity resulting from profitable operations.e. The underlying accounting principle that determines when revenue should be recorded in theaccounting records.f. The type of entry used to decrease an asset or increase a liability or owners’ equity account.g. The…

Required: a. Assuming that purchases are recorded at net amounts and that discounts lost are treated as financial expenses:1. Prepare general journal entries to enter the transactions.2. Prepare the adjusting entry necessary on August 31 if financial statements are to be prepared at that time.3. Describe how the various items would be shown in the financial statements.b.  Which of the two methods do you prefer and why?

Accountants use reserve accounts for various reasons, for each of the cases below describe a specific account example that matches the scenario. a.       The use of a reserve account in order to match expenses with revenues. b.      The use of a reserve account in order to keep expenses out of the income statement. c.       The use of a reserve account in order to revalue an asset, but delay the income recognition effect.

Use the following to answer questions 16 - 19 For each transaction indicate whether it should: A. increase, B. decrease, or C. no effect. Credit sales transaction cycle Assets Liabilities Stockholders' equity Revenues Expenses 16. Provide services on account 17. Estimate uncollectible accounts 18. Write off accounts as uncollectible 19. Collect on account previously written off