Explore

Skip to Main Content

 Manali Bankar

Introduction to Financial Accounting

Week 2

Homework #2

Prev

Next
 Revenues and Expenses
 Relic Spotter Case, Part 3
 Adjusting Entries
 Relic Spotter Case, Part 4
 Financial Statements and Closing Entries
 3M Company: Income Statement and Balance Sheet
 Homework
o

Quiz: Homework #2

10 questions

QUIZ • 20 MIN

Homework #2
,
People are making progress
320 learners have recently completed this assignment
Submit your assignment
DUEDec 2, 1:29 PM IST
ATTEMPTS3 every 8 hours
Try again
Receive grade
TO PASS80% or higher
Grade
50%
View Feedback
We keep your highest score
Homework #2
Graded Quiz • 20 min
Due Dec 2, 1:29 PM IST
Try again once you are ready
TO PASS 80% or higher
Try again
GRADE
50%
Homework #2
LATEST SUBMISSION GRADE

50%
1.Question 1
Which of these transactions would produce $10,000 of revenue in December? (check all
that apply)

BOC Realty leases space to a tenant for December and the tenant pays the $10,000 rent in cash
in December.

Correct
The two revenue recognition criteria are earned and realized. Both criteria are satisfied in
December.

BOC Realty leases space to a tenant for December and sends a bill for the $10,000 rent to be
paid in January.

BOC Bank is owed $10,000 of interest on a loan for December and receives the payment in
January.

BOC Bank receives a check for $10,000 in December for November's interest amount.
BOC Realty leases space to a tenant for December and January. The tenant pre-paid the
$20,000 rent for the two months in November.

Correct
The two revenue recognition criteria are earned and realized. Both criteria are satisfied in
December.

You didn't select all the correct answers

0 / 1 point

2.Question 2
Which of these transactions would produce $10,000 of expenses in December? (check all
that apply)

BOC hires a new COO in December to start work in January. The COO will be paid $10,000 per
month.

BOC receives a $10,000 invoice from its lawyers for services performed in December. The bill is
due in January.

BOC pays its auditor $12,000 in December for all of the work the auditor performed during the
year.

BOC pays $10,000 in cash dividends in December.

BOC pays its advertising agency $10,000 in December for ads that ran in December.

You didn't select all the correct answers

0 / 1 point

3.Question 3
Which journal entry reflects the following transaction?:

BOC receives $2,000 cash from a customer, of which $1,000 was for goods delivered now
and $1,000 was a deposit on custom goods that will be delivered next month.

Dr. Revenue 2,000

 Cr. Cash 2,000

Dr. Cash 2,000

Cr. Revenue 1,000

Cr. Advances from Customers 1,000

Dr. Cash 2,000

Cr. Revenue 2,000

Dr. Cash 2,000

Cr. Inventory 2,000

Dr. Cash 2,000

Cr. Advances from Customers 2,000

Incorrect
This entry is missing a Cr to Revenue.

0 / 1 point

4.Question 4
Which journal entry(s) reflects the following transaction?:

BOC received $5,000 of cash from a customer who took delivery of goods that originally
cost BOC $4,000 to acquire.

Dr. Cash 5,000

Cr. Revenue 5,000

Dr. Cash 5,000

Cr. Inventory 5,000

Dr. Cash 5,000

Cr. Revenue 5,000

Dr. Cost of Goods Sold 4,000

Cr. Inventory 4,000

Dr. Cash 5,000

Cr. Inventory 4,000

Cr. Revenue 1,000

Dr. Cash 5,000

Cr. Revenue 5,000

Dr. Accounts Payable 4,000

Cr. Inventory 4,000

Correct
We need two entries: (1) debit Cash and credit Revenue for the cash received for the delivery of
goods and (2) debit Cost of Goods Sold and credit Inventory for the original cost of the goods
delivered to the customer.

1 / 1 point

5.Question 5
How much annual depreciation expense would be recognized for a truck that originally
cost $30,000 and has an estimated useful life of 5 years with a $5,000 salvage value?

$10,000

$5,000

$3,333
$7,000

$6,000

Correct
Under straight-line depreciation, the annual expense would be:

(30,000 - 5,000) / 5 = 5,000.

1 / 1 point

6.Question 6
Which journal entry reflects the adjusting entry needed on December 31?:

It is December 31, the end of the fiscal year. During December, employees earned
$800,000 in salaries, but paychecks do not get issued until January 2.

Dr. Salary Expense 800,000

Cr. Salaries Payable 800,000

Dr. Salaries Payable 800,000

Cr. Cash 800,000

Dr. Cash 800,000

Cr. Salaries Payable 800,000

Dr. Salary Expense 800,000

Cr. Cash 800,000

No entry is needed.

Correct
We recognize (debit) Salary Expense based on the employees working for us and we credit the
liability Salaries Payable to record our obligation to pay them in January.
1 / 1 point

7.Question 7
Which journal entry reflects the adjusting entry needed on December 31?:

Last year, BOC purchased software for $10,000. The expected life of the software is 2
years and it has no expected salvage value. Now, it is December 31, the end of the fiscal
year. No other entries were recorded for this software during the year.

Dr. Software Amortization Expense 5,000

Cr. Software Revenue 5,000

No entry needed.

Dr. Software Amortization Expense 5,000

Cr. PP&E 5,000

Dr. Software Amortization Expense 5,000

Cr. Software 5,000

Dr. Software Amortization Expense 5,000

Cr. Cash 5,000

Incorrect
The Cr to Cash is incorrect.

0 / 1 point

8.Question 8
Which journal entry reflects the adjusting entry needed on December 31?:

In September, BOC received an order for $500,000 of products that will be delivered and
billed in January. Now, it is December 31, the end of the fiscal year, and no prior entry has
been recorded for this order.
Dr. Accounts Receivable 500,000

Cr Revenue 500,000

Dr. Advances from Customers 500,000

Cr Revenue 500,000

Dr. Accounts Receivable 500,000

Cr Unearned Revenue 500,000

No entry needed.

Dr. Order Backlog 500,000

Cr Revenue 500,000

Correct
There should be no adjusting entry. There has been no transaction yet and no revenue has been
earned.

1 / 1 point

9.Question 9
Which item would not appear on a Balance Sheet?

Retained Earnings

Interest Payable

Prepaid expenses

Gross Profit

Accounts Receivable
Incorrect
You did not choose an option.

0 / 1 point

10.Question 10
Which of the following are permanent accounts? (check all that apply)

Retained Earnings

Correct
Permanent account.

Cost of Goods Sold

Unearned Revenue

Correct
Permanent account.

Common Stock

Correct
Permanent account.

Revenue

1 / 1 point