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Module 3 Graded Quiz

10questions

1
point

1.
An Illinois consulting rm had accounts receivable of $70,000 on December
31, 2015. During year 2016, the consulting rm collected $30,000 in fees
from its clients. On December 31, 2016, it had accounts receivable of
$100,000. On an accrual basis, what was the consulting rm's revenue for
the year 2016?
$40,000
$60,000
$130,000
$100,000

1
point

2.
People magazine sells annual subscriptions. The magazine subscription fees
are collected in advance and had a balance of $ 5,000,000 on December 31,
2015. The magazine received $3,500,000 in cash from subscribers in year
2016. Also, magazine subscription revenue reached $6,000,000 in the same
year. How much should People magazine report as the balance for magazine
subscriptions collected in advance (i.e., unearned revenue) in its December
31, 2016 balance sheet?
$5,500,000
$8,500,000

$9,000,000
$2,500,000

1
point

3.
Champaign LLC paid $15,000 to renew its insurance policy for ve years on
March 1, 2016, the eective start date of the policy. What amounts should be
reported for prepaid insurance and insurance expenses in Champaign LLC 's
nancial statements for the month ending on March 31, 2016?

Prepaid Insurance

Insurance Expense

$15,000

$3000

Prepaid Insurance

Insurance Expense

$15,000

$250

Prepaid Insurance

Insurance Expense

$14,750

$250

Prepaid Insurance

Insurance Expense

$14,750

$0

1
point

4.
On December 31, 2016, Divers LLC provided diving instructions to 30

On December 31, 2016, Divers LLC provided diving instructions to 30


customers who will be paying $1,000 each in January 2017. What should
Divers LLC record in its 2016 balance sheet for this transaction?
Accounts receivable
Accounts payable
Unearned Revenue
Prepaid expense

1
point

5.
GE borrows $3,000,000 at 10% annual interest rate from Chase bank on
March 31, 2016. Annual interest is payable on March 31 for the next ve
years. How much should GE record as interest payable on December 31,
2016?
$300,000
$0
$225,000
$3,000,000

1
point

6.
A rm rented a basement space to a retail shop for $900 per month. The
retail shop did not pay the rent for November and December 2016 and plans
to make a payment for these two months on January 25, 2017. How much
accounts receivable should the rm record in its December 31, 2016 balance
sheet?
$10,800
$900
$0

$0
$1800

1
point

7.
Illini Supermarket pays $6,000 for a 2-year insurance policy on June 30, 2016.
Insurance coverage begins on July 1, 2016. How much should the company
record as prepaid insurance on its December 31, 2016 balance sheet?
$0
$4,500
$6,000
$3,000

1
point

8.
A retail store collects 6 months rent in advance in the amount of $18,000 on
October 1, 2016. How much unearned revenue should the retail store record
in its balance sheet on December 31, 2016 as a result of this transaction?
$18,000
$0
$9,000
$12,000

1
point

9.
Which accounting principle dictates using accounting rules that will result in

Which accounting principle dictates using accounting rules that will result in
less revenues/assets, or higher liability when choosing among acceptable
accounting rules?
Going concern
Consistency
Conservatism
Matching

1
point

10.
Changing accounting principles every year violates the __________principle.
Consistency
Matching
Going concern
Conservatism

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