Quiz AC-7 - 1. Question: Company ABC pays its rent at the...

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1. Question: Company ABC pays its rent at the beginning of the year for the entire year. when does the rent expense appear on the income statement? Your Answer: The entire year's rent expense is on the January income statement because it is paid in January. One month's rent expense is on each month's income statement because one month's rent is used each month. CORRECT The entire year's rent expense is recongized in the Decmeber income statement because all of the rent is expired by the end of December. GAAP allows different companies to recognize rent revenue in different ways. Points Received: 1 of 1 Comments: 2. Question: A corporation pays $10,000 in wages every Friday based on a 5-day workweek. December 31, the end of the accounting period, falls on a Tuesday for the currentyear. Which one of the following is a correct component of the adjusting entry to be made for this item on December 31. Your Answer: Accrued wages payable will be increased by $4,000 Accrued Wages payable will be decreasedby $4,000 Wages Expense will be increase by $6,000 (decreasing owners' equity). CORRECT Cash will be decreased by $4,000. Points Received: 1 of 1 Comments: 3. Question: ABC Company requires its customers to pay in advance and records the cash reeived as Unearned Revenue. What does ABC Co. record when it provides services to its customers? Your Answer: Unearned revenue decrease; revenue increases CORRECT Unearned revenue decreases; cash increases. Revenue increases; cash increases Unearned revenue increases; revenue decreases. Points Received: 1 of 1 Comments: 4. Question: A company has working capital of $500,000 and a current ratio of 3.0. How much are the company's current assets? Your Answer:
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This note was uploaded on 06/20/2010 for the course FINA 6266 taught by Professor Burt during the Spring '10 term at University of Arkansas for Medical Sciences.

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Quiz AC-7 - 1. Question: Company ABC pays its rent at the...

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