Question $6$ Question $7$

Effy at Effy Construction builds custom homes in new neighbourhood

developments. Each home takes $8$ to $10$ months to complete and

construction often crosses a fiscal year. Last year, Effy began taking

deposits to help with cash flow. When reviewing the year end, she

noticed the balance in the Deferred Revenue account was much higher

than she expected.

What step was missed from the Unearned Income workflow to cause this

scenario?

Mapping the Customer Deposit product$/$service item to the correct income

account

Recording the customer deposit into the Customer Deposits liability account

Writing a cheque to refund the overpayment

Recording the deposit as a negative amount on invoices

Issuing a statement to the customer Question $8$

What are the methods of recording supplier prepayments? Select all that

apply.

Use a current liability account

Use a current asset account

Negative accounts payable

Use a barter account

Negative accounts receivable Question $9$

When using a separate account to track supplier prepayments, what is a

critical step to take when reporting?

Tag paid in full transactions

Reconcile the account periodically

Move paid in full transactions to another bank account

Void paid in full transactions

Delete paid in full transactionsQuestion $10$

Your client receives an NSF cheque from a customer.

Which three of the following steps would you take to record NSF

payments?

Delete the customer; all transactions involving that customer will be reversed

Delete the customer's original invoice and payment, and record them again

when the actual payment is received

Create an item called NSF and link it to a bank account. Then use an invoice to

record the NSF amount

Create a second item called NSF Charges, link it to an expense account such as

bank charges, and add it to the invoice above, to charge the customer for the

bank's fees

Tag the customer with the tag $"$NSF$"$

Record the bank's NSF fees to an expense account

Which of these options for recording customer prepayments is in

accordance with Generally Accepted Accounting Principles $($GAAP$)?$

Recognizing the prepayment as Unearned Income

Using the Deposit field on invoices in QuickBooks Online

Recognizing the prepayment as income as soon as funds are received

Receiving a payment with no invoice created yet