Which of the following reflect the balances of prepayment accounts

Which of the following reflect the balances of prepayment accounts prior to adjustment? 

 

Balance sheet accounts are overstated and income statement accounts are overstated. 

Balance sheet accounts are understated and income statement accounts are overstated. 

Balance sheet accounts are overstated and income statement accounts are understated. 

Balance sheet accounts are understated and income statement accounts are understated.

 

 

If an adjustment is needed for unearned revenues, the 

 

liability is overstated and the related revenue is understated before adjustment. 

liability is understated and the related revenue is overstated before adjustment. 

liability and related revenue are understated before adjustment. 

liability and related revenue are overstated before adjustment.

 

 

If a company fails to make an adjusting entry to record supplies expense, then

  

owner’s equity will be understated. 

assets will be understated. 

net income will be understated. 

expense will be understated.

 

 

Which of the following would not result in unearned revenue? 

 

Sale of two-year magazine subscriptions 

Sale of season tickets to football games 

Rent collected in advance from tenants 

Services performed on account

 

 

Fugazi City College sold season tickets for the 2014 football season for $240,000. A total of 8 games will be played during September, October and November. In September, three games were played. The adjusting journal entry at September 30 

 

is not required. 

No adjusting entries will be made until the end of the season in November. 

will include a debit to Unearned Ticket Revenue and a credit to Ticket Revenue for $90,000.              

will include a debit to Ticket Revenue and a credit to Unearned Ticket Revenue for $80,000. 

 

The income statement and balance sheet columns of Iron and Wine Company’s worksheet reflect the following totals:

 

 

      Income Statement                          Balance Sheet

                Dr.          Cr.                                Dr.             Cr.

Totals    $72,000$44,000                 $60,000            $88,000

 

The net income (or loss) for the period is 

 

$28,000 loss         

$28,000 income. 

not determinable. 

$44,000 income.

 

 

Which of the following is a true statement about closing the books of a proprietorship?

  

Expenses are closed to the Expense Summary account. 

Only revenues are closed to the Income Summary account. 

Revenues and expenses are closed to the Income Summary account. 

Revenues, expenses, and the owner’s drawings account are closed to the Income Summary account.

 

 

The income statement for the year 2014 of Fugazi Co. contains the following information:

 

Revenues                                            $70,000

Expenses:

Salaries and Wages Expense   $45,000

Rent Expense                   12,000

Advertising Expense10,000

Supplies Expense         6,000

Utilities Expense       2,500

Insurance Expense       2,000

Total expenses                    77,500

Net income (loss)                                   ($7,500)

 

After the revenue and expense accounts have been closed, the balance in Income Summary will be 

 

$0. 

a credit balance of $7,500. 

a debit balance of $7,500. 

a credit balance of $70,000.

 

 

The income statement for the year 2014 of Fugazi Co. contains the following information:

 

Revenues$70,000

Expenses:

Salaries and Wages Expense$45,000

Rent Expense12,000

Advertising Expense10,000

Supplies Expense6,000

Utilities Expense2,500

Insurance Expense2,000

Total expenses77,500

Net income (loss)($7,500)

 

At January 1, 2014, Fugazi reported owner’s equity of $50,000. Owner drawings for the year totalled $10,000. At December 31, 2014, the company will report owner’s equity of 

 

$17,500. 

$32,500.         

$42,500.

$40,000.

 

All of the following statements about the post-closing trial balance are correct except it 

 

shows that the accounting equation is in balance.

proves that all transactions have been recorded. 

provides evidence that the journalizing and posting of closing entries have been properly completed. 

contains only permanent accounts.

 

 

 

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