Question

Your company has decided to switch from a manual accounting system to a computerized transaction based system with a March 31 fiscal year-end. The system your company is adopting utilizes increases and decreases rather than debits and credits. Your boss has asked you to analyze each of the following events by determining which master files would be affected and whether they would be increased or decreased by the event and the year-end adjusting/closing process.
A. On January 1 your company paid its insurance premiums for the next two years, $2,400.
B. On February 1 your company accepted an advance payment from a customer for services to be provided uniformly over the next nine months, $7,200.
C. On March 1 your company borrowed $100,000 on a simple interest loan with an 8 percent annual rate. The lean and the interest will be repaid on March l of next year.
D. On January 1 your company loaned $50,000 to a shareholder on a simple interest loan with a 10 percent animal rate. The loan and the interest will be repaid by the shareholder on January 1 of next year.
E. On January 1 your company bought equipment costing $80,000 with an eight-year useful life. The equipment will be expensed uniformly over its life.


$1.99
Sales0
Views51
Comments0
  • CreatedMarch 25, 2015
  • Files Included
Post your question
5000