Exam (elaborations)
Financial Accounting - D102 WGU- 165 Q’s and A’s
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- Financial Accounting - D102 WGU- 165 Q’s And A’s
Financial Accounting - D102 WGU- 165 Q’s and A’s
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Financial Accounting - D102 WGU-165 Q’s and A’s
Account - -An accounting record in which the results of transactions are
accumulated; shows increases, decreases, and a balance
-Accounts Receivable - -A current asset representing money due for
services performed or merchandise sold on credit
-On August 1 of Year 1, a company paid $7,200 for two years' rent. The
rental period starts on August 1 of Year 1.
Which debit or credit is correctly included in the adjusting journal entry
necessary on December 31 of Year 1? - -1. Credit to rent expense for
$1,500.
2. Credit to prepaid rent for $5,100.
3. Debit to rent expense for $1,500.
4. Debit to rent expense for $5,100.
Correct: 3
-On October 1 of Year 1, a company made a $60,000 cash loan to another
company. The interest rate on the loan is 5%. No cash payments will be
collected on the loan until September 30 of Year 2.
Which debit or credit is correctly included in the adjusting journal entry
necessary on the company's books (the lender) on December 31 with respect
to this loan? - -1. Credit to interest revenue for $750.
2. Debit to interest revenue for $2,250.
3. Credit to interest revenue for $2,250.
4. Debit to interest revenue for $750.
Correct: 2
-On January 1, a company had office supplies costing $4,600. During the
year, the company bought (and recorded) additional office supplies costing
$9,900. On December 31, a physical count of office supplies revealed that
supplies costing $2,900 remained.
Which debit or credit is correctly included in the adjusting journal entry
necessary on December 31 to record the supplies that the company used
during the year? - -1. Credit to office supplies expense for $11,600.
2. Debit to office supplies for $11,600.
3. Credit to office supplies for $11,600.
4. Debit to cash for $11,600.
, Correct: 3
-At the end of the year, before any closing entries are made, which account
has a debit balance? - -Cost of goods sold
-Revenues: Credit or Debit on the book? - -Credits; they represent increases
of equity
-Expenses and Dividends: Credit or Debit on the books? - -Debits; they
represent decreases in equity
-Steps to closing Entries: - -1. Separate Nominal accounts from real
accounts
2. Debit or credit each nominal account to make the balance = 0
3. Corresponding debit or credit to Retained Earnings
-How is the ending retained earnings calculated? - -Beginning retained
earnings + Net Income - Dividends
-Net Income - -the difference between total revenue and total expenses
-On January 6, a credit sale was made for $1,000. Terms for the sale were
4/10, n/30. Cash for the sale was collected on January 25.
Which debit or credit should be included in the journal entry to record the
cash collection on January 25? - -1. Debit accounts receivable for $1,000
2. Debit sales discounts for $960
3. Debit cash for $1,000
4. Debit sales discounts for $40
Correct: 2
-A company's controller estimated bad debt expense using the percentage
of accounts receivable method. Total sales for the year were $1,500,000.
The ending balance in accounts receivable was $300,000. An examination of
the outstanding accounts at the end of the year indicates that approximately
7% of these accounts will ultimately prove to be uncollectible. Before any
adjustment, the balance in the allowance for bad debts is $4,000 (credit).
Total accounts written off as uncollectible during the year were $15,000.
Which debit or credit is included in the adjusting entry to record bad debt
expense for the year? - -1. Credit allowance for bad debts for $21,000
2. Debit allowance for bad debts for $25,000
3. Debit allowance for bad debts for $15,000
4. Credit allowance for bad debts for $17,000
Correct: 3
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