What's required when creating an adjusting entry when amounts were previously recorded as deferred revenues?

A. A debit to a liability
B. A credit to an asset
C. A credit to a liability
D. A debit to an asset

2. Andy's Dry Cleaners maintains its records on the cash basis. During 2015, Andy's collected $72,000 from customers and paid $21,000 in expenses. Depreciation expense of $5,000 would have been recorded on the accrual basis. Over the course of the year, accounts receivable increased $4,000, prepaid expenses decreased $2,000, and accrued liabilities decreased $1,000. Andy's accrual basis net income would be

A. $42,000
B. $38,000
C. $49,000
D. $54,000

3. Sunset Rentals received $12,000 for 24 months' rent in advance. How should Sunset record this transaction?

A.

Interest expense 12,000
Interest payable 12,000

B.

Prepaid rent 12,000
Rent expense 12,000

C.

Salaries expense 12,000
Salaries payable 12,000

D.

Cash 12,000
Deferred revenue 12,000

4. Amy's Computers is preparing an annual report for the current fiscal year. The company's controller has asked for your help in determining how best to disclose information about the inventory costing method. Where should this information be disclosed?

A. In a separate disclosure note
B. In the summary of significant accounting policies note
C. On the face of the balance sheet
D. It doesn't need to be disclosed

5. What can be said about the results of efforts to converge US and international accounting standards between 2002 and 2012?

A. The SEC staff concluded that there aren't any important differences between US and international accounting standards.

B. No material efforts were made to converge the two standards.

C. The SEC staff concluded that it's feasible for the United States to adopt IFRS.

D. The SEC staff concluded that it's not feasible for the United States to adopt IFRS

6. On November 1, 2015, Toys-R-Us borrows $30,000,000 at 9% to finance the holiday sales season.
The note is for a six-month term and both principal and interest are payable at maturity. What should be
the balance of interest payable for the loan as of December 31, 2015?

A. $225,000
B. $1,350,000
C. $450,000
D. $112,500

Answer rating: 100% (QA)

Solution 1 The correct answer is a ie A debit to a liability Ex... View the full answer