2010-05-02_091625_kunede_acct_281-4-30-101 - Can you help...

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Can you help me with the accounting problems; so far I’ve done some of the work which is highlighted in Yellow. The others that are highlighted in red it needs your attention. Also, if you don’t mind, can you check and see if all of my answers are correct? 1. On January 1, Altillo borrowed $10,000 at 6% interest for 1 year. Altillo accrues interest on the note monthly. If no adjusting entry is made at the end of January, what will be the impact on the financial statements? a. Revenues will be overstated by $50 b. Expenses will be understated by $600 [b] c. Liabilities will be understated by $1,000 d. Net Income will be overstated by $50 2. On February 2, Reedy’s Printing Service received a payment of $6,000 for contracted printing work that will completed over the next 3 months. As of the end of February, the company had completed 1/3 of the work. The adjusting journal entry at the end of February for prepaid revenue will include a. a debit to Unearned Revenue for $6,000 b. a credit to Unearned Revenue for $4,000 c. a credit to Printing Revenues for $2,000 d. a debit to Cash for $2,000 3. In accordance with the revenue recognition principle, sales revenues are recorded when a. [my answer) earned, which typically occurs when the goods are transferred from the seller to the buyer. b. cash is received from the customer for items already delivered. c. an order is received from a customer with delivery of the product expected to take place within the next 30 days. d. the accountant determines which period's income statement "needs" more revenue. 4. Which of the following accounts is not included in the computation of net sales? a. Sales Discounts b. Sales c. Sales Returns and Allowances d. Freight Out 5. Proponents of LIFO, as opposed to FIFO, point out that LIFO results in a. lower income taxes in a period of deflation. b. a more current cost of goods sold .
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c. lower net income in a period of deflation. d. higher net income in periods of inflation. 6. The ending inventory of Larkin Company, which uses a periodic inventory system, was understated $7,000 on December 31, 2007, and overstated $3,000 on December 31, 2008. Because of these errors, 2008 net income was a. overstated $3,000. b. overstated $10,000. c. understated $4,000. d. understated $10,000. 7. Kotsch Textile purchased machinery for $60,000 eight years ago. It was expected to have a useful life of ten years, no salvage value, and was depreciated using the straight-line method. At the end of its eighth year of use, it was retired from service and given to a junk dealer. The entry to record the retirement includes a a. debit to Loss on Disposal for $12,000. b. credit to Depreciation Expense for $6,000. c.
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This note was uploaded on 09/11/2011 for the course ACCOUNTING 323 taught by Professor None during the Spring '10 term at Prince George's Community College, Largo.

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2010-05-02_091625_kunede_acct_281-4-30-101 - Can you help...

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