Acctstuff
On April 1, 2011, the premium on a one-year insurance policy was purchased for $3,000 cash with the insurance coverage beginning on that date. Which of the following correctly describes the effect of the December 31, 2011 adjusting entry on the financial statements? (Assume that no adjusting entries have been made during the year.)
Prepaid insurance will increase $2,250.
Prepaid insurance will decrease $750.
Insurance expense will increase $2,250.
Insurance expense will increase $750.
A customer purchased and received $5,000 of goods on credit from Discount Paper Supply on September 1. The customer received the bill on September 13 and mailed a $5,000 check on September 30. Discount Paper Supply received the check on October 4. On which of the following dates should Discount Paper Supply record sales revenue?
October 4
September 30
September 1
September 13
Sparty Corporation has provided the following information for its most recent year of operation: Revenues earned were $74,000, of which $7,000 were uncollectible at the end of the year. Operating expenses incurred were $32,000, of which $6,000 were unpaid at the end of the year. Dividends declared were $14,000, of which $4,000 were unpaid at the end of the year. Income tax expense is 36% of pretax income. How much net income was reported on Sparty's income statement?
$19,840
$26,880
$26,340
$17,920
Which of the following transactions results in an increase in liabilities and a decrease in net income?
Collecting cash from a customer for services to be provided in the future.
Adjustment of the unearned revenue account for revenue earned during the period.
The accrual of revenue earned at year-end.
The accrual of salaries expense at year-end.
On January 1, 2011, Ryan Company paid the premium on a four-year insurance policy in the amount of $6,800. At that time, the full amount paid was recorded as prepaid insurance. After recording the adjusting entry for the insurance policy on
Prepaid insurance will increase $2,250.
Prepaid insurance will decrease $750.
Insurance expense will increase $2,250.
Insurance expense will increase $750.
A customer purchased and received $5,000 of goods on credit from Discount Paper Supply on September 1. The customer received the bill on September 13 and mailed a $5,000 check on September 30. Discount Paper Supply received the check on October 4. On which of the following dates should Discount Paper Supply record sales revenue?
October 4
September 30
September 1
September 13
Sparty Corporation has provided the following information for its most recent year of operation: Revenues earned were $74,000, of which $7,000 were uncollectible at the end of the year. Operating expenses incurred were $32,000, of which $6,000 were unpaid at the end of the year. Dividends declared were $14,000, of which $4,000 were unpaid at the end of the year. Income tax expense is 36% of pretax income. How much net income was reported on Sparty's income statement?
$19,840
$26,880
$26,340
$17,920
Which of the following transactions results in an increase in liabilities and a decrease in net income?
Collecting cash from a customer for services to be provided in the future.
Adjustment of the unearned revenue account for revenue earned during the period.
The accrual of revenue earned at year-end.
The accrual of salaries expense at year-end.
On January 1, 2011, Ryan Company paid the premium on a four-year insurance policy in the amount of $6,800. At that time, the full amount paid was recorded as prepaid insurance. After recording the adjusting entry for the insurance policy on