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The sale of merchandise on credit requires an entry in which two accounts

The sale of merchandise on credit requires an entry in which two accounts?

a.cash and sales revenue

b.accounts receivable and sales revenue

c.accounts receivable and cash

d.sales revenue and accounts payable

 

 

 

12.Which of the following transactions would cause a decrease in the Accounts Receivable account?

a.a credit sale to a customer

b.a collection of cash from a customer to whom a previous sale was made

c.a cash sale to a customer

d.a credit purchase by the company

 

 

 

13.Sanchez Office Supplies collected $500 from a customer from a sale that had previously been recorded as accounts receivable. Recording of this event in the accounting system will result in

a.an increase in assets

b.a decrease in assets

c.no change to total assets

d.an increase in revenue

 

 

 

14.Which of the following accounts would be affected by the sale of a product to a customer?

a.inventory

b.cost of goods sold

c.sales revenue

d.all of the above accounts would be affected

 

 

 

15.Accrued revenues and expenses result when

a.the end of the year has occurred after the transaction has been completed

b.revenues and expenses are recognized after cash is received or paid

c.revenues and expenses are recognized before cash is received or paid

d.the bookkeeper has made an error

 

 

 

16.At December 31, 2007, the end of Smith and Jones Co. fiscal year, there were $470 of office supplies on hand. During 2008, $1,800 of office supplies were purchased and charged to the Office Supplies Expense account. On December 31, 2008, a physical count of office supplies revealed that there was $700 worth on hand. As a result of this information, the bookkeeper will have to

a.increase an asset account by $230

b.increase an expense account by $230

c.increase an asset account by $700

d.increase an expense account by $1570

 

 

 

17.The cost associated with borrowing money during a fiscal period is

a.rent expense

b.depreciation expense

c.interest expense

d.cost of goods sold

 

 

 

18.ACE Company sells insurance policies to customers who pay the entire premium in advance.  Which of the following adjustments is necessary when ACE has earned one-half of a customer's prepaid insurance premium?

a.increase Unearned Revenue

b.increase Cash

c.increase Insurance Revenue

d.increase Insurance Expense

 

 

 

19.Reliance Computers received a bank loan of $50,000 on December 31, 2007. In January, 2008 the company made its monthly interest payment of $500.  Which of the following statements is true?

a.the cash account would be increased for $50,000 in December, 2007

b.expenses would be increased by $500 in January, 2008

c.the bank loan was a financing activity

d.all of the above are true

 

 

 

20.B & F Auto Body purchased equipment costing $60,000. Of this amount, $40,000 was paid in cash and the balance is due in six months. Recording this purchase would have what effect on the firm's accounting system?

a.total assets would increase $60,000

b.total assets would increase $100,000

c.accounts payable would increase $40,000

d.total assets would increase by $20,000

Dec 25 2019 View more View Less

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