Question

For each of the following ad justing entries, state whether the entry increases, decreases, or has no effect on the following financial ratios: current ratio, debt-to-equity ratio, profit margin ratio, and return on equity. Assume the current ratio and debt-to-equity ratio are greater than one and the profit margin ratio and return on equity are less than one before each of the adjusting entries is considered. Consider each entry independently.
a. Dr. Depreciation expense................ 10,000
Cr. Accumulated depreciation...... 10,000
b. Dr. Unearned revenue ................ 5,000
Cr. Revenue............... 5,000
c. Dr. Interest receivable................ 2,000
Cr. Interest revenue............ 2,000
d. Dr. Utilities expense................. 500
Cr. Accrued utility expense payable...... 500
e. Dr. Rent expense .................. 1,000
Cr. Prepaid rent............... 1,000



$1.99
Sales0
Views61
Comments0
  • CreatedFebruary 26, 2015
  • Files Included
Post your question
5000