List the three steps, in order of occurrence, of the operating cycle of a merchandising business. What will be an ideal response ANSWER 1. The operating cycle begins when the company purchases inventory from an individual or business, called a vendor. 2. The company then sells the inventory to a customer. 3. Finally, the company […]
Healthy Living, a diet magazine, collected $240,000 in subscription revenue on May 31. Each subscriber will receive an issue of the magazine in each of the next 12 months, beginning with the June issue. The company uses the accrual method of accounting What is the amount of Subscription Revenue that has been earned by the […]
Get in Shape, a healthy living magazine, collected $528,000 in subscription revenue on May 31. Each subscriber will receive an issue of the magazine in each of the next 12 months, beginning with the June issue The company uses the accrual method of accounting. What is the balance in the Unearned Revenue account as of […]
Assets are listed in the order of their ________ on the balance sheet. A) magnitude B) dates of purchase C) liquidity D) durability ANSWER C
In the case of deferred revenue, the adjusting entry at the end of the period includes a debit to Service Revenue. Assume the deferred revenue is initially recorded as a liability. Indicate whether the statement is true or false ANSWER FALSE
Luminous Electrical, Inc. performed services of $8,000 on January 24 and invoiced the customer. Luminous received the $8,000 on January 31. Provide the journal entry on January 24 when services were performed. (Ignore explanation.) What will be an ideal response ANSWER Accounts Receivable 8,000 Service Revenue 8,000
Bright Lights Electrical, Inc. performed services of $8,000 on January 24 and invoiced the customer. Bright Lights received the $8,000 on January 31. Provide the journal entry on January 31 when the cash was received. (Ignore explanation.) What will be an ideal response ANSWER Cash 8,000 Accounts Receivable 8,000
The accounting records of Marcus Service Company include the following selected, unadjusted balances at June 30: Accounts Receivable, $2,700; Office Supplies, $1,800; Prepaid Rent, $3,600; Equipment, $15,000; Accumulated Depreciation – Equipment, $1,800 What will be an ideal response ANSWER Accounts Debit Credit a Accounts Receivable Service Revenue 1,400 1,400 b Unearned Revenue Service Revenue 800 […]
The last two columns generally found on the right side of the worksheet are the income statement columns. Indicate whether the statement is true or false ANSWER FALSE
In the case of deferred revenue, the cash is received first, and the revenue is earned later. Indicate whether the statement is true or false ANSWER TRUE
