Practice Questions with Solutions

1 Mr. Mop sells several different types of household cleaners. Mr. Mop has just received a cash payment for the full amount that this customer owed to the company for all of their purchases to date. The outstanding balance which has now been paid was $36000.
A)
DR Cash $3,000
   CR Accounts Receivable $3,000
B)
DR Accounts Receivable $36,000
   CR Cash $36,000
C)
DR Accounts Receivable $3,000
   CR Cash $3,000
D)
DR Cash $36,000
   CR Accounts Receivable $36,000
2 Mount Tessory Academy offers their customers a wide range of private school education. This month, Mount Tessory Academy must amortize 1 month worth of utility bills which they had prepaid at the beginning of the year. The amount that they had paid upfront for the year was $28800.
A)
DR Prepaid Expense $28,800
   CR Utilities expense $28,800
B)
DR Utilities expense $28,800
   CR Prepaid Expense $28,800
C)
DR Utilities expense $2,400
   CR Prepaid Expense $2,400
D)
DR Prepaid Expense $2,400
   CR Utilities expense $2,400
3 Jameson & Jameson sells various soap products. Today, Jameson & Jameson received an upfront payment for 4470 truckloads of bars of soap which will be provided to the customer 6 months from now. The payment for each was $1500.
A)
DR Cash $6,705,000
   CR Unearned Revenue $6,705,000
B)
DR Unearned Revenue $1,500
   CR Cash $1,500
C)
DR Unearned Revenue $6,705,000
   CR Cash $6,705,000
D)
DR Cash $1,500
   CR Unearned Revenue $1,500
4 AC&C Ltd. is a corporation which sells cell phone plans. This January, AC&C Ltd. has made an advance payment to cover the next 12 months of utility bills, which have a monthly cost of $2300.
A)
DR Prepaid Expense $27,600
   CR Cash $27,600
B)
DR Cash $2,300
   CR Prepaid Expense $2,300
C)
DR Cash $27,600
   CR Prepaid Expense $27,600
D)
DR Prepaid Expense $2,300
   CR Cash $2,300
5 David & Johnson is a market leader that is well-known for their brand of legal services. This year, David & Johnson has provided 1100 billable hours each of which earned revenues of $2740.
A)
DR Sales $3,014,000
   CR Accounts Receivable $3,014,000
B)
DR Accounts Receivable $3,014,000
   CR Sales $3,014,000
C)
DR Accounts Receivable $2,740
   CR Sales $2,740
D)
DR Sales $2,740
   CR Accounts Receivable $2,740
6 Paytech Ltd is a privately-held corporation which focuses on their niche of premium payroll transaction processing services. Today Paytech Ltd signed up for a loan with a 5% interest rate, and so the bank immediately transferred cash to the company in the amount of $93000.
A)
DR Loan Payable $4,650
   CR Cash $4,650
B)
DR Cash $4,650
   CR Loan Payable $4,650
C)
DR Cash $93,000
   CR Loan Payable $93,000
D)
DR Loan Payable $93,000
   CR Cash $93,000
7 Hogtown Records is a company which offers their customers a wide selection of audio services for local musicians to record their music albums. Hogtown Records has just purchased a building using cash, which has an expected useful life of 30 years, and which had a total cost of $948000.
A)
DR Cash $948,000
   CR Building $948,000
B)
DR Building $948,000
   CR Cash $948,000
C)
DR Building $31,600
   CR Cash $31,600
D)
DR Cash $31,600
   CR Building $31,600
8 Fairway Malls is a privately-held corporation which focuses on their niche of premium retail spaces in their shopping centers. This January, Fairway Malls has made an advance payment to cover the next 12 months of utility bills, which have a monthly cost of $2700.
A)
DR Prepaid Expense $2,700
   CR Cash $2,700
B)
DR Cash $32,400
   CR Prepaid Expense $32,400
C)
DR Cash $2,700
   CR Prepaid Expense $2,700
D)
DR Prepaid Expense $32,400
   CR Cash $32,400
9 Sprike Inc sells various athletic apparel. This month, Sprike Inc has estimated that 15% of the accounts receivable might not end up being collectable, based on past experience. The accounts receivable will need to be adjusted from its current balance of $80000.
A)
DR Bad Debt expense $80,000
   CR Allowance for Doubtful Accounts $80,000
B)
DR Allowance for Doubtful Accounts $12,000
   CR Bad Debt expense $12,000
C)
DR Allowance for Doubtful Accounts $80,000
   CR Bad Debt expense $80,000
D)
DR Bad Debt expense $12,000
   CR Allowance for Doubtful Accounts $12,000
10 Hogtown Records is a corporation which sells audio services for local musicians to record their music albums. Today Hogtown Records signed up for a loan with a 5% interest rate, and so the bank immediately transferred cash to the company in the amount of $69000.
A)
DR Cash $3,450
   CR Loan Payable $3,450
B)
DR Loan Payable $69,000
   CR Cash $69,000
C)
DR Loan Payable $3,450
   CR Cash $3,450
D)
DR Cash $69,000
   CR Loan Payable $69,000
11 Paytech Ltd provides their customers with payroll transaction processing services. This December, Paytech Ltd recognized 1 year of depreciation on equipment which had a total useful life of 10 years, and which had originally cost $80000.
A)
DR Depreciation expense $8,000
   CR Accumulated Depreciation $8,000
B)
DR Accumulated Depreciation $80,000
   CR Depreciation expense $80,000
C)
DR Accumulated Depreciation $8,000
   CR Depreciation expense $8,000
D)
DR Depreciation expense $80,000
   CR Accumulated Depreciation $80,000
12 David & Johnson provides their customers with legal services. Today, David & Johnson bought equipment which has a 5 year useful life, and which had a cost of $14000.
A)
DR Equipment $14,000
   CR Accounts Payable $14,000
B)
DR Accounts Payable $2,800
   CR Equipment $2,800
C)
DR Accounts Payable $14,000
   CR Equipment $14,000
D)
DR Equipment $2,800
   CR Accounts Payable $2,800
13 Jameson & Jameson sells several different types of soap products. Today, Jameson & Jameson received an upfront payment for 3240 truckloads of bars of soap which will be provided to the customer 6 months from now. The payment for each was $1200.
A)
DR Unearned Revenue $1,200
   CR Cash $1,200
B)
DR Cash $1,200
   CR Unearned Revenue $1,200
C)
DR Cash $3,888,000
   CR Unearned Revenue $3,888,000
D)
DR Unearned Revenue $3,888,000
   CR Cash $3,888,000
14 AC&C Ltd. sells several different types of cell phone plans. This December, AC&C Ltd. recognized 1 year of depreciation on equipment which had a total useful life of 10 years, and which had originally cost $210000.
A)
DR Depreciation expense $210,000
   CR Accumulated Depreciation $210,000
B)
DR Accumulated Depreciation $21,000
   CR Depreciation expense $21,000
C)
DR Accumulated Depreciation $210,000
   CR Depreciation expense $210,000
D)
DR Depreciation expense $21,000
   CR Accumulated Depreciation $21,000
15 A to Z Event Guru Ltd is a market leader that is well-known for their brand of start-to-finish event planning services for large gatherings. A to Z Event Guru Ltd has just provided 1500 large orders which had been paid for in advance last year. Each order was in the amount of $1600.
A)
DR Sales $2,400,000
   CR Unearned Revenue $2,400,000
B)
DR Unearned Revenue $2,400,000
   CR Sales $2,400,000
C)
DR Unearned Revenue $1,600
   CR Sales $1,600
D)
DR Sales $1,600
   CR Unearned Revenue $1,600
16 Grand Convention Ltd is a privately-held corporation which focuses on their niche of premium banquet hall rentals for corporate meetings. Grand Convention Ltd has just provided 2200 large orders which had been paid for in advance last year. Each order was in the amount of $1500.
A)
DR Unearned Revenue $3,300,000
   CR Sales $3,300,000
B)
DR Sales $1,500
   CR Unearned Revenue $1,500
C)
DR Sales $3,300,000
   CR Unearned Revenue $3,300,000
D)
DR Unearned Revenue $1,500
   CR Sales $1,500
17 Grand Convention Ltd provides their customers with banquet hall rentals for corporate meetings. This December, Grand Convention Ltd recognized 1 year of depreciation on a building which had a total useful life of 25 years, and which had originally been bought for $510000.
A)
DR Depreciation expense $510,000
   CR Accumulated Depreciation $510,000
B)
DR Accumulated Depreciation $20,400
   CR Depreciation expense $20,400
C)
DR Accumulated Depreciation $510,000
   CR Depreciation expense $510,000
D)
DR Depreciation expense $20,400
   CR Accumulated Depreciation $20,400
18 Mr. Mop is an organization which specializes in providing their customers with household cleaners. Today, Mr. Mop received an upfront payment for 3880 tons of cleaning solution which will be provided to the customer 6 months from now. The payment for each was $1800.
A)
DR Cash $1,800
   CR Unearned Revenue $1,800
B)
DR Unearned Revenue $6,984,000
   CR Cash $6,984,000
C)
DR Unearned Revenue $1,800
   CR Cash $1,800
D)
DR Cash $6,984,000
   CR Unearned Revenue $6,984,000
19 Toyonda is an organization which specializes in providing their customers with cars. Today, Toyonda has paid cash to their supplier to fully pay off their account payable balance, which was $64000.
A)
DR Cash $64,000
   CR Accounts Payable $64,000
B)
DR Accounts Payable $64,000
   CR Cash $64,000
C)
DR Accounts Payable $5,333
   CR Cash $5,333
D)
DR Cash $5,333
   CR Accounts Payable $5,333
20 NBG Media Corporation sells several different types of broadcasting services for advertising agencies. This month, NBG Media Corporation must amortize 1 month worth of utility bills which they had prepaid at the beginning of the year. The amount that they had paid upfront for the year was $16800.
A)
DR Utilities expense $1,400
   CR Prepaid Expense $1,400
B)
DR Prepaid Expense $16,800
   CR Utilities expense $16,800
C)
DR Prepaid Expense $1,400
   CR Utilities expense $1,400
D)
DR Utilities expense $16,800
   CR Prepaid Expense $16,800
21 Cirque du Lune sells several different types of circus performances. This December, Cirque du Lune recognized 1 year of depreciation on a building which had a total useful life of 25 years, and which had originally been bought for $214000.
A)
DR Accumulated Depreciation $8,560
   CR Depreciation expense $8,560
B)
DR Depreciation expense $8,560
   CR Accumulated Depreciation $8,560
C)
DR Depreciation expense $214,000
   CR Accumulated Depreciation $214,000
D)
DR Accumulated Depreciation $214,000
   CR Depreciation expense $214,000
22 Hogtown Records is a corporation which sells audio services for local musicians to record their music albums. This January, Hogtown Records has made an advance payment to cover the next 12 months of utility bills, which have a monthly cost of $1400.
A)
DR Prepaid Expense $1,400
   CR Cash $1,400
B)
DR Cash $16,800
   CR Prepaid Expense $16,800
C)
DR Cash $1,400
   CR Prepaid Expense $1,400
D)
DR Prepaid Expense $16,800
   CR Cash $16,800
23 Air America is a privately-held corporation which focuses on their niche of premium global flights. Today Air America signed up for a loan with a 5% interest rate, and so the bank immediately transferred cash to the company in the amount of $50000.
A)
DR Loan Payable $50,000
   CR Cash $50,000
B)
DR Cash $50,000
   CR Loan Payable $50,000
C)
DR Cash $2,500
   CR Loan Payable $2,500
D)
DR Loan Payable $2,500
   CR Cash $2,500
24 Kola-Nut Ltd sells several different types of soft drinks. This month, Kola-Nut Ltd accepted 6400 batches of soda bottles which were returned by customers. These products had been marked up by 35% and they had originally been bought at a per-unit cost of $2800.
A)
DR Sales Returns $3,640
DR Inventory $2,800
   CR Accounts Receivable $3,640
   CR Cost of Goods Sold $2,800
B)
DR Accounts Receivable $24,192,000
DR Accounts Receivable $17,920,000
   CR Sales Returns $24,192,000
   CR Inventory $17,920,000
C)
DR Accounts Receivable $3,640
DR Accounts Receivable $2,800
   CR Sales Returns $3,640
   CR Inventory $2,800
D)
DR Sales Returns $24,192,000
DR Inventory $17,920,000
   CR Accounts Receivable $24,192,000
   CR Cost of Goods Sold $17,920,000
25 McGerald’s is a corporation which sells fast food meals. This week, McGerald’s paid each of the 1590 staff members their bi-weekly wages, which per person had a cost of $2500.
A)
DR Wage expense $2,500
   CR Accounts Payable $2,500
B)
DR Accounts Payable $3,975,000
   CR Wage expense $3,975,000
C)
DR Accounts Payable $2,500
   CR Wage expense $2,500
D)
DR Wage expense $3,975,000
   CR Accounts Payable $3,975,000
26 Pharma Drug Company Ltd. sells various medications. This December, Pharma Drug Company Ltd. has paid each of the company’s 1800 owners an annual dividend in the amount of $19000.
A)
DR Retained Earnings $19,000
   CR Cash $19,000
B)
DR Cash $34,200,000
   CR Retained Earnings $34,200,000
C)
DR Cash $19,000
   CR Retained Earnings $19,000
D)
DR Retained Earnings $34,200,000
   CR Cash $34,200,000
27 Air America provides their customers with global flights. Today, Air America bought equipment which has a 5 year useful life, and which had a cost of $10000.
A)
DR Equipment $2,000
   CR Accounts Payable $2,000
B)
DR Accounts Payable $10,000
   CR Equipment $10,000
C)
DR Accounts Payable $2,000
   CR Equipment $2,000
D)
DR Equipment $10,000
   CR Accounts Payable $10,000
28 Jameson & Jameson sells several different types of soap products. This month, Jameson & Jameson accepted 24600 truckloads of bars of soap which were returned by customers. These products had been marked up by 35% and they had originally been bought at a per-unit cost of $1800.
A)
DR Accounts Receivable $59,778,000
DR Accounts Receivable $44,280,000
   CR Sales Returns $59,778,000
   CR Inventory $44,280,000
B)
DR Sales Returns $59,778,000
DR Inventory $44,280,000
   CR Accounts Receivable $59,778,000
   CR Cost of Goods Sold $44,280,000
C)
DR Sales Returns $2,340
DR Inventory $1,800
   CR Accounts Receivable $2,340
   CR Cost of Goods Sold $1,800
D)
DR Accounts Receivable $2,340
DR Accounts Receivable $1,800
   CR Sales Returns $2,340
   CR Inventory $1,800
29 Sprike Inc sells several different types of athletic apparel. This month, Sprike Inc must amortize 1 month worth of utility bills which they had prepaid at the beginning of the year. The amount that they had paid upfront for the year was $25200.
A)
DR Utilities expense $25,200
   CR Prepaid Expense $25,200
B)
DR Prepaid Expense $2,100
   CR Utilities expense $2,100
C)
DR Prepaid Expense $25,200
   CR Utilities expense $25,200
D)
DR Utilities expense $2,100
   CR Prepaid Expense $2,100
30 Mr. Mop is an organization which specializes in providing their customers with household cleaners. Today Mr. Mop sold 40400 tons of cleaning solution which had a 30% mark-up. They had originally been bought from their suppliers for a unit cost of $2170.
A)
DR Sales $113,968,400
DR Sales $87,668,000
   CR Accounts Receivable $113,968,400
   CR Cost of Goods Sold $87,668,000
B)
DR Accounts Receivable $113,968,400
DR Cost of Goods Sold $87,668,000
   CR Sales $113,968,400
   CR Inventory $87,668,000
C)
DR Accounts Receivable $2,821
DR Cost of Goods Sold $2,170
   CR Sales $2,821
   CR Inventory $2,170
D)
DR Sales $2,821
DR Sales $2,170
   CR Accounts Receivable $2,821
   CR Cost of Goods Sold $2,170
31 Cirque du Lune provides their customers with circus performances. Today Cirque du Lune signed up for a loan with a 5% interest rate, and so the bank immediately transferred cash to the company in the amount of $99000.
A)
DR Cash $4,950
   CR Loan Payable $4,950
B)
DR Loan Payable $99,000
   CR Cash $99,000
C)
DR Loan Payable $4,950
   CR Cash $4,950
D)
DR Cash $99,000
   CR Loan Payable $99,000
32 Fairway Malls sells several different types of retail spaces in their shopping centers. Fairway Malls has just purchased a building using cash, which has an expected useful life of 30 years, and which had a total cost of $238000.
A)
DR Building $7,933
   CR Cash $7,933
B)
DR Cash $238,000
   CR Building $238,000
C)
DR Cash $7,933
   CR Building $7,933
D)
DR Building $238,000
   CR Cash $238,000
33 David & Johnson is a privately-held corporation which focuses on their niche of premium legal services. This year, David & Johnson has provided 1400 billable hours each of which earned revenues of $2260.
A)
DR Sales $3,164,000
   CR Accounts Receivable $3,164,000
B)
DR Accounts Receivable $3,164,000
   CR Sales $3,164,000
C)
DR Accounts Receivable $2,260
   CR Sales $2,260
D)
DR Sales $2,260
   CR Accounts Receivable $2,260
34 LA Met Theatre Company sells various live theatrical performances. Today, LA Met Theatre Company bought equipment which has a 5 year useful life, and which had a cost of $16000.
A)
DR Equipment $3,200
   CR Accounts Payable $3,200
B)
DR Accounts Payable $16,000
   CR Equipment $16,000
C)
DR Accounts Payable $3,200
   CR Equipment $3,200
D)
DR Equipment $16,000
   CR Accounts Payable $16,000
35 Kola-Nut Ltd is a corporation which sells soft drinks. This week, Kola-Nut Ltd paid each of the 3580 staff members their bi-weekly wages, which per person had a cost of $2300.
A)
DR Wage expense $2,300
   CR Accounts Payable $2,300
B)
DR Accounts Payable $8,234,000
   CR Wage expense $8,234,000
C)
DR Accounts Payable $2,300
   CR Wage expense $2,300
D)
DR Wage expense $8,234,000
   CR Accounts Payable $8,234,000
36 Paytech Ltd sells several different types of payroll transaction processing services. Today, Paytech Ltd received payment upfront for 1300 large orders which will not be provided until early next year. Each order was in the amount of $1600.
A)
DR Unearned Revenue $2,080,000
   CR Cash $2,080,000
B)
DR Cash $2,080,000
   CR Unearned Revenue $2,080,000
C)
DR Cash $1,600
   CR Unearned Revenue $1,600
D)
DR Unearned Revenue $1,600
   CR Cash $1,600
37 Mr. Mop provides their customers with household cleaners. Today Mr. Mop sold 16500 tons of cleaning solution which had a 30% mark-up. They had originally been bought from their suppliers for a unit cost of $2520.
A)
DR Accounts Receivable $3,276
DR Cost of Goods Sold $2,520
   CR Sales $3,276
   CR Inventory $2,520
B)
DR Sales $54,054,000
DR Sales $41,580,000
   CR Accounts Receivable $54,054,000
   CR Cost of Goods Sold $41,580,000
C)
DR Sales $3,276
DR Sales $2,520
   CR Accounts Receivable $3,276
   CR Cost of Goods Sold $2,520
D)
DR Accounts Receivable $54,054,000
DR Cost of Goods Sold $41,580,000
   CR Sales $54,054,000
   CR Inventory $41,580,000
38 Kola-Nut Ltd provides their customers with soft drinks. Today, Kola-Nut Ltd received an upfront payment for 5400 batches of soda bottles which will be provided to the customer 6 months from now. The payment for each was $1800.
A)
DR Cash $1,800
   CR Unearned Revenue $1,800
B)
DR Unearned Revenue $9,720,000
   CR Cash $9,720,000
C)
DR Unearned Revenue $1,800
   CR Cash $1,800
D)
DR Cash $9,720,000
   CR Unearned Revenue $9,720,000
39 LA Met Theatre Company is a company which offers their customers a wide selection of live theatrical performances. This month, LA Met Theatre Company must amortize 1 month worth of utility bills which they had prepaid at the beginning of the year. The amount that they had paid upfront for the year was $13200.
A)
DR Prepaid Expense $1,100
   CR Utilities expense $1,100
B)
DR Utilities expense $1,100
   CR Prepaid Expense $1,100
C)
DR Utilities expense $13,200
   CR Prepaid Expense $13,200
D)
DR Prepaid Expense $13,200
   CR Utilities expense $13,200
40 NY Fitness is a market leader that is well-known for their brand of gym memberships for professional sports teams. This year, NY Fitness has provided 1100 team memberships each of which earned revenues of $2820.
A)
DR Sales $3,102,000
   CR Accounts Receivable $3,102,000
B)
DR Accounts Receivable $3,102,000
   CR Sales $3,102,000
C)
DR Accounts Receivable $2,820
   CR Sales $2,820
D)
DR Sales $2,820
   CR Accounts Receivable $2,820
41 Pharma Drug Company Ltd. is a corporation which sells medications. Today Pharma Drug Company Ltd. sold 8700 batches of pills which had a 30% mark-up. They had originally been bought from their suppliers for a unit cost of $1720.
A)
DR Accounts Receivable $2,236
DR Cost of Goods Sold $1,720
   CR Sales $2,236
   CR Inventory $1,720
B)
DR Sales $19,453,200
DR Sales $14,964,000
   CR Accounts Receivable $19,453,200
   CR Cost of Goods Sold $14,964,000
C)
DR Sales $2,236
DR Sales $1,720
   CR Accounts Receivable $2,236
   CR Cost of Goods Sold $1,720
D)
DR Accounts Receivable $19,453,200
DR Cost of Goods Sold $14,964,000
   CR Sales $19,453,200
   CR Inventory $14,964,000
42 Cirque du Lune is an organization which specializes in providing their customers with circus performances. Today, Cirque du Lune bought equipment which has a 5 year useful life, and which had a cost of $13000.
A)
DR Accounts Payable $13,000
   CR Equipment $13,000
B)
DR Equipment $13,000
   CR Accounts Payable $13,000
C)
DR Equipment $2,600
   CR Accounts Payable $2,600
D)
DR Accounts Payable $2,600
   CR Equipment $2,600
43 NY Fitness is a company which offers their customers a wide selection of gym memberships for professional sports teams. This December, NY Fitness has paid each of the company’s 2000 owners an annual dividend in the amount of $10000.
A)
DR Cash $20,000,000
   CR Retained Earnings $20,000,000
B)
DR Retained Earnings $20,000,000
   CR Cash $20,000,000
C)
DR Retained Earnings $10,000
   CR Cash $10,000
D)
DR Cash $10,000
   CR Retained Earnings $10,000
44 Air America sells several different types of global flights. This year, Air America has provided 2400 flights each of which earned revenues of $2770.
A)
DR Accounts Receivable $2,770
   CR Sales $2,770
B)
DR Sales $6,648,000
   CR Accounts Receivable $6,648,000
C)
DR Sales $2,770
   CR Accounts Receivable $2,770
D)
DR Accounts Receivable $6,648,000
   CR Sales $6,648,000
45 Kola-Nut Ltd is a market leader that is well-known for their brand of soft drinks. This month, Kola-Nut Ltd paid for 1 monthof rent for the warehouse room, which has a monthly costs of $2700.
A)
DR Accounts Payable $2,700
   CR Rent expense $2,700
B)
DR Rent expense $2,700
   CR Accounts Payable $2,700
C)
DR Rent expense $32,400
   CR Accounts Payable $32,400
D)
DR Accounts Payable $32,400
   CR Rent expense $32,400
46 David & Johnson provides their customers with legal services. Today, David & Johnson has paid cash to their supplier to fully pay off their account payable balance, which was $28000.
A)
DR Accounts Payable $2,333
   CR Cash $2,333
B)
DR Cash $28,000
   CR Accounts Payable $28,000
C)
DR Cash $2,333
   CR Accounts Payable $2,333
D)
DR Accounts Payable $28,000
   CR Cash $28,000
47 Kola-Nut Ltd is a company which offers their customers a wide selection of soft drinks. This week, Kola-Nut Ltd purchased 5020 batches of soda bottles which were placed into the warehouse, and which had a per unit cost of $1200.
A)
DR Accounts Payable $1,200
   CR Inventory $1,200
B)
DR Inventory $1,200
   CR Accounts Payable $1,200
C)
DR Inventory $6,024,000
   CR Accounts Payable $6,024,000
D)
DR Accounts Payable $6,024,000
   CR Inventory $6,024,000
48 Jameson & Jameson is an organization which specializes in providing their customers with soap products. Today, Jameson & Jameson received an upfront payment for 4070 truckloads of bars of soap which will be provided to the customer 6 months from now. The payment for each was $2300.
A)
DR Cash $2,300
   CR Unearned Revenue $2,300
B)
DR Unearned Revenue $9,361,000
   CR Cash $9,361,000
C)
DR Unearned Revenue $2,300
   CR Cash $2,300
D)
DR Cash $9,361,000
   CR Unearned Revenue $9,361,000
49 Cirque du Lune is a corporation which sells circus performances. This month, Cirque du Lune made 1 monthly loan repayment towards their long-term note payable. The interest portion was 60% of the payment. The total amount paid in cash was $16000.
A)
DR Interest Expense $9,600
DR Loan Payable $6,400
   CR Cash $16,000
B)
DR Cash $16,000
   CR Interest Expense $6,400
   CR Loan Payable $9,600
C)
DR Cash $16,000
   CR Interest Expense $9,600
   CR Loan Payable $6,400
D)
DR Interest Expense $6,400
DR Loan Payable $9,600
   CR Cash $16,000
50 Air America is a company which offers their customers a wide selection of global flights. This month, Air America has estimated that 30% of the accounts receivable might not end up being collectable, based on past experience. The accounts receivable will need to be adjusted from its current balance of $27000.
A)
DR Bad Debt expense $27,000
   CR Allowance for Doubtful Accounts $27,000
B)
DR Allowance for Doubtful Accounts $8,100
   CR Bad Debt expense $8,100
C)
DR Allowance for Doubtful Accounts $27,000
   CR Bad Debt expense $27,000
D)
DR Bad Debt expense $8,100
   CR Allowance for Doubtful Accounts $8,100
SOLUTIONS
1 Mr. Mop sells several different types of household cleaners. Mr. Mop has just received a cash payment for the full amount that this customer owed to the company for all of their purchases to date. The outstanding balance which has now been paid was $36000.
D)
DR Cash $36,000
   CR Accounts Receivable $36,000
The cash (asset) account has increased, and the accounts receivable (asset) account has decreased by $36,000.
2 Mount Tessory Academy offers their customers a wide range of private school education. This month, Mount Tessory Academy must amortize 1 month worth of utility bills which they had prepaid at the beginning of the year. The amount that they had paid upfront for the year was $28800.
C)
DR Utilities expense $2,400
   CR Prepaid Expense $2,400
The utilities (expense) account has increased and the prepaid expense (asset) account has decreased by: $28,800 for the year, divided by 12 months = $2,400
3 Jameson & Jameson sells various soap products. Today, Jameson & Jameson received an upfront payment for 4470 truckloads of bars of soap which will be provided to the customer 6 months from now. The payment for each was $1500.
A)
DR Cash $6,705,000
   CR Unearned Revenue $6,705,000
The cash (asset) and the unearned revenue (liability) accounts have both increased by: 4470 truckloads of bars of soap x $1,500 = $6,705,000
4 AC&C Ltd. is a corporation which sells cell phone plans. This January, AC&C Ltd. has made an advance payment to cover the next 12 months of utility bills, which have a monthly cost of $2300.
A)
DR Prepaid Expense $27,600
   CR Cash $27,600
The prepaid expense (asset) account has increased, and the cash (asset) account has decreased by: 12 months x $2,300 per month = $27,600 for the year.
5 David & Johnson is a market leader that is well-known for their brand of legal services. This year, David & Johnson has provided 1100 billable hours each of which earned revenues of $2740.
B)
DR Accounts Receivable $3,014,000
   CR Sales $3,014,000
The accounts receivable (asset) and the sales (revenue) accounts have both increased by: 1100 billable hours x $2,740 = $3,014,000
6 Paytech Ltd is a privately-held corporation which focuses on their niche of premium payroll transaction processing services. Today Paytech Ltd signed up for a loan with a 5% interest rate, and so the bank immediately transferred cash to the company in the amount of $93000.
C)
DR Cash $93,000
   CR Loan Payable $93,000
The cash (asset) and the loan payable (liablity) accounts have both increased by: $93,000. The interest rate does not affect this initial accounting entry, but it will be used for the calculation of interest expense when repayments are made in the future toward this loan.
7 Hogtown Records is a company which offers their customers a wide selection of audio services for local musicians to record their music albums. Hogtown Records has just purchased a building using cash, which has an expected useful life of 30 years, and which had a total cost of $948000.
B)
DR Building $948,000
   CR Cash $948,000
The building (asset) account has increased, and the cash (asset) account has decreased by: $948,000. The useful life does not affect this original accounting entry, but it will be used to calculate depreciation of the asset in the future.
8 Fairway Malls is a privately-held corporation which focuses on their niche of premium retail spaces in their shopping centers. This January, Fairway Malls has made an advance payment to cover the next 12 months of utility bills, which have a monthly cost of $2700.
D)
DR Prepaid Expense $32,400
   CR Cash $32,400
The prepaid expense (asset) account has increased, and the cash (asset) account has decreased by: 12 months x $2,700 per month = $32,400 for the year.
9 Sprike Inc sells various athletic apparel. This month, Sprike Inc has estimated that 15% of the accounts receivable might not end up being collectable, based on past experience. The accounts receivable will need to be adjusted from its current balance of $80000.
D)
DR Bad Debt expense $12,000
   CR Allowance for Doubtful Accounts $12,000
The bad debts (expense) and the allowance for doubtful accounts (contra-asset) have both increased by: 15% x $80,000 = $12,000
10 Hogtown Records is a corporation which sells audio services for local musicians to record their music albums. Today Hogtown Records signed up for a loan with a 5% interest rate, and so the bank immediately transferred cash to the company in the amount of $69000.
D)
DR Cash $69,000
   CR Loan Payable $69,000
The cash (asset) and the loan payable (liablity) accounts have both increased by: $69,000. The interest rate does not affect this initial accounting entry, but it will be used for the calculation of interest expense when repayments are made in the future toward this loan.
11 Paytech Ltd provides their customers with payroll transaction processing services. This December, Paytech Ltd recognized 1 year of depreciation on equipment which had a total useful life of 10 years, and which had originally cost $80000.
A)
DR Depreciation expense $8,000
   CR Accumulated Depreciation $8,000
The depreciation (expense) account and the accumulated depreciation (contra-asset) accounts have both increased by: $80,000 divided by 10 years = $8,000 depreciation per year.
12 David & Johnson provides their customers with legal services. Today, David & Johnson bought equipment which has a 5 year useful life, and which had a cost of $14000.
A)
DR Equipment $14,000
   CR Accounts Payable $14,000
The equipment (asset) and the accounts payable (liability) accounts have both increased by: $14,000. The useful life does not affect this original accounting entry, but it will be used to calculate depreciation of the asset in the future.
13 Jameson & Jameson sells several different types of soap products. Today, Jameson & Jameson received an upfront payment for 3240 truckloads of bars of soap which will be provided to the customer 6 months from now. The payment for each was $1200.
C)
DR Cash $3,888,000
   CR Unearned Revenue $3,888,000
The cash (asset) and the unearned revenue (liability) accounts have both increased by: 3240 truckloads of bars of soap x $1,200 = $3,888,000
14 AC&C Ltd. sells several different types of cell phone plans. This December, AC&C Ltd. recognized 1 year of depreciation on equipment which had a total useful life of 10 years, and which had originally cost $210000.
D)
DR Depreciation expense $21,000
   CR Accumulated Depreciation $21,000
The depreciation (expense) account and the accumulated depreciation (contra-asset) accounts have both increased by: $210,000 divided by 10 years = $21,000 depreciation per year.
15 A to Z Event Guru Ltd is a market leader that is well-known for their brand of start-to-finish event planning services for large gatherings. A to Z Event Guru Ltd has just provided 1500 large orders which had been paid for in advance last year. Each order was in the amount of $1600.
B)
DR Unearned Revenue $2,400,000
   CR Sales $2,400,000
The unearned revenue (liablity) account has decreased and the and the sales (revenue) account has increased by: 1500 large orders x $1,600 = $2,400,000
16 Grand Convention Ltd is a privately-held corporation which focuses on their niche of premium banquet hall rentals for corporate meetings. Grand Convention Ltd has just provided 2200 large orders which had been paid for in advance last year. Each order was in the amount of $1500.
A)
DR Unearned Revenue $3,300,000
   CR Sales $3,300,000
The unearned revenue (liablity) account has decreased and the and the sales (revenue) account has increased by: 2200 large orders x $1,500 = $3,300,000
17 Grand Convention Ltd provides their customers with banquet hall rentals for corporate meetings. This December, Grand Convention Ltd recognized 1 year of depreciation on a building which had a total useful life of 25 years, and which had originally been bought for $510000.
D)
DR Depreciation expense $20,400
   CR Accumulated Depreciation $20,400
The depreciation (expense) account and the accumulated depreciation (contra-asset) accounts have both increased by: $510,000 divided by 25 years = $20,400 depreciation per year.
18 Mr. Mop is an organization which specializes in providing their customers with household cleaners. Today, Mr. Mop received an upfront payment for 3880 tons of cleaning solution which will be provided to the customer 6 months from now. The payment for each was $1800.
D)
DR Cash $6,984,000
   CR Unearned Revenue $6,984,000
The cash (asset) and the unearned revenue (liability) accounts have both increased by: 3880 tons of cleaning solution x $1,800 = $6,984,000
19 Toyonda is an organization which specializes in providing their customers with cars. Today, Toyonda has paid cash to their supplier to fully pay off their account payable balance, which was $64000.
B)
DR Accounts Payable $64,000
   CR Cash $64,000
The accounts payable (liability) and cash (asset) accounts have both increased by $64,000.
20 NBG Media Corporation sells several different types of broadcasting services for advertising agencies. This month, NBG Media Corporation must amortize 1 month worth of utility bills which they had prepaid at the beginning of the year. The amount that they had paid upfront for the year was $16800.
A)
DR Utilities expense $1,400
   CR Prepaid Expense $1,400
The utilities (expense) account has increased and the prepaid expense (asset) account has decreased by: $16,800 for the year, divided by 12 months = $1,400
21 Cirque du Lune sells several different types of circus performances. This December, Cirque du Lune recognized 1 year of depreciation on a building which had a total useful life of 25 years, and which had originally been bought for $214000.
B)
DR Depreciation expense $8,560
   CR Accumulated Depreciation $8,560
The depreciation (expense) account and the accumulated depreciation (contra-asset) accounts have both increased by: $214,000 divided by 25 years = $8,560 depreciation per year.
22 Hogtown Records is a corporation which sells audio services for local musicians to record their music albums. This January, Hogtown Records has made an advance payment to cover the next 12 months of utility bills, which have a monthly cost of $1400.
D)
DR Prepaid Expense $16,800
   CR Cash $16,800
The prepaid expense (asset) account has increased, and the cash (asset) account has decreased by: 12 months x $1,400 per month = $16,800 for the year.
23 Air America is a privately-held corporation which focuses on their niche of premium global flights. Today Air America signed up for a loan with a 5% interest rate, and so the bank immediately transferred cash to the company in the amount of $50000.
B)
DR Cash $50,000
   CR Loan Payable $50,000
The cash (asset) and the loan payable (liablity) accounts have both increased by: $50,000. The interest rate does not affect this initial accounting entry, but it will be used for the calculation of interest expense when repayments are made in the future toward this loan.
24 Kola-Nut Ltd sells several different types of soft drinks. This month, Kola-Nut Ltd accepted 6400 batches of soda bottles which were returned by customers. These products had been marked up by 35% and they had originally been bought at a per-unit cost of $2800.
D)
DR Sales Returns $24,192,000
DR Inventory $17,920,000
   CR Accounts Receivable $24,192,000
   CR Cost of Goods Sold $17,920,000 This transaction increases the sales returns (contra-revenue) account, and the inventory (asset) account.
The accounts receivable (asset) account and the cost of goods sold (expense) account have both decreased. 6400 batches of soda bottles x $2,800 = $17,920,000. The 35% markup applies to the sales returns and accounts receivable amounts, i.e. $17,920,000 x 1.35 = $24,192,000
25 McGerald’s is a corporation which sells fast food meals. This week, McGerald’s paid each of the 1590 staff members their bi-weekly wages, which per person had a cost of $2500.
D)
DR Wage expense $3,975,000
   CR Accounts Payable $3,975,000
The wage (expense) and the accounts payable (liability) accounts have both increased by: 1590 staff members x $2,500 = $3,975,000
26 Pharma Drug Company Ltd. sells various medications. This December, Pharma Drug Company Ltd. has paid each of the company’s 1800 owners an annual dividend in the amount of $19000.
D)
DR Retained Earnings $34,200,000
   CR Cash $34,200,000
The retained earnings (equity) and the cash accounts have both decreased by: 1800 owners x $19,000 = $34,200,000
27 Air America provides their customers with global flights. Today, Air America bought equipment which has a 5 year useful life, and which had a cost of $10000.
D)
DR Equipment $10,000
   CR Accounts Payable $10,000
The equipment (asset) and the accounts payable (liability) accounts have both increased by: $10,000. The useful life does not affect this original accounting entry, but it will be used to calculate depreciation of the asset in the future.
28 Jameson & Jameson sells several different types of soap products. This month, Jameson & Jameson accepted 24600 truckloads of bars of soap which were returned by customers. These products had been marked up by 35% and they had originally been bought at a per-unit cost of $1800.
B)
DR Sales Returns $59,778,000
DR Inventory $44,280,000
   CR Accounts Receivable $59,778,000
   CR Cost of Goods Sold $44,280,000 This transaction increases the sales returns (contra-revenue) account, and the inventory (asset) account.
The accounts receivable (asset) account and the cost of goods sold (expense) account have both decreased. 24600 truckloads of bars of soap x $1,800 = $44,280,000. The 35% markup applies to the sales returns and accounts receivable amounts, i.e. $44,280,000 x 1.35 = $59,778,000
29 Sprike Inc sells several different types of athletic apparel. This month, Sprike Inc must amortize 1 month worth of utility bills which they had prepaid at the beginning of the year. The amount that they had paid upfront for the year was $25200.
D)
DR Utilities expense $2,100
   CR Prepaid Expense $2,100
The utilities (expense) account has increased and the prepaid expense (asset) account has decreased by: $25,200 for the year, divided by 12 months = $2,100
30 Mr. Mop is an organization which specializes in providing their customers with household cleaners. Today Mr. Mop sold 40400 tons of cleaning solution which had a 30% mark-up. They had originally been bought from their suppliers for a unit cost of $2170.
B)
DR Accounts Receivable $113,968,400
DR Cost of Goods Sold $87,668,000
   CR Sales $113,968,400
   CR Inventory $87,668,000 This transaction increases the accounts receivable (asset) account, the sales (revenue) account, and the cost of goods sold (expense) account.
The inventory (asset) account has decreased. 40400 tons of cleaning solution x $2,170 = $87,668,000. The 30% markup applies to the sales and accounts receivable amounts, i.e. $87,668,000 x 1.30 = $113,968,400
31 Cirque du Lune provides their customers with circus performances. Today Cirque du Lune signed up for a loan with a 5% interest rate, and so the bank immediately transferred cash to the company in the amount of $99000.
D)
DR Cash $99,000
   CR Loan Payable $99,000
The cash (asset) and the loan payable (liablity) accounts have both increased by: $99,000. The interest rate does not affect this initial accounting entry, but it will be used for the calculation of interest expense when repayments are made in the future toward this loan.
32 Fairway Malls sells several different types of retail spaces in their shopping centers. Fairway Malls has just purchased a building using cash, which has an expected useful life of 30 years, and which had a total cost of $238000.
D)
DR Building $238,000
   CR Cash $238,000
The building (asset) account has increased, and the cash (asset) account has decreased by: $238,000. The useful life does not affect this original accounting entry, but it will be used to calculate depreciation of the asset in the future.
33 David & Johnson is a privately-held corporation which focuses on their niche of premium legal services. This year, David & Johnson has provided 1400 billable hours each of which earned revenues of $2260.
B)
DR Accounts Receivable $3,164,000
   CR Sales $3,164,000
The accounts receivable (asset) and the sales (revenue) accounts have both increased by: 1400 billable hours x $2,260 = $3,164,000
34 LA Met Theatre Company sells various live theatrical performances. Today, LA Met Theatre Company bought equipment which has a 5 year useful life, and which had a cost of $16000.
D)
DR Equipment $16,000
   CR Accounts Payable $16,000
The equipment (asset) and the accounts payable (liability) accounts have both increased by: $16,000. The useful life does not affect this original accounting entry, but it will be used to calculate depreciation of the asset in the future.
35 Kola-Nut Ltd is a corporation which sells soft drinks. This week, Kola-Nut Ltd paid each of the 3580 staff members their bi-weekly wages, which per person had a cost of $2300.
D)
DR Wage expense $8,234,000
   CR Accounts Payable $8,234,000
The wage (expense) and the accounts payable (liability) accounts have both increased by: 3580 staff members x $2,300 = $8,234,000
36 Paytech Ltd sells several different types of payroll transaction processing services. Today, Paytech Ltd received payment upfront for 1300 large orders which will not be provided until early next year. Each order was in the amount of $1600.
B)
DR Cash $2,080,000
   CR Unearned Revenue $2,080,000
The cash (asset) and the unearned revenue (liability) accounts have both increased by: 1300 large orders x $1,600 = $2,080,000
37 Mr. Mop provides their customers with household cleaners. Today Mr. Mop sold 16500 tons of cleaning solution which had a 30% mark-up. They had originally been bought from their suppliers for a unit cost of $2520.
D)
DR Accounts Receivable $54,054,000
DR Cost of Goods Sold $41,580,000
   CR Sales $54,054,000
   CR Inventory $41,580,000 This transaction increases the accounts receivable (asset) account, the sales (revenue) account, and the cost of goods sold (expense) account.
The inventory (asset) account has decreased. 16500 tons of cleaning solution x $2,520 = $41,580,000. The 30% markup applies to the sales and accounts receivable amounts, i.e. $41,580,000 x 1.30 = $54,054,000
38 Kola-Nut Ltd provides their customers with soft drinks. Today, Kola-Nut Ltd received an upfront payment for 5400 batches of soda bottles which will be provided to the customer 6 months from now. The payment for each was $1800.
D)
DR Cash $9,720,000
   CR Unearned Revenue $9,720,000
The cash (asset) and the unearned revenue (liability) accounts have both increased by: 5400 batches of soda bottles x $1,800 = $9,720,000
39 LA Met Theatre Company is a company which offers their customers a wide selection of live theatrical performances. This month, LA Met Theatre Company must amortize 1 month worth of utility bills which they had prepaid at the beginning of the year. The amount that they had paid upfront for the year was $13200.
B)
DR Utilities expense $1,100
   CR Prepaid Expense $1,100
The utilities (expense) account has increased and the prepaid expense (asset) account has decreased by: $13,200 for the year, divided by 12 months = $1,100
40 NY Fitness is a market leader that is well-known for their brand of gym memberships for professional sports teams. This year, NY Fitness has provided 1100 team memberships each of which earned revenues of $2820.
B)
DR Accounts Receivable $3,102,000
   CR Sales $3,102,000
The accounts receivable (asset) and the sales (revenue) accounts have both increased by: 1100 team memberships x $2,820 = $3,102,000
41 Pharma Drug Company Ltd. is a corporation which sells medications. Today Pharma Drug Company Ltd. sold 8700 batches of pills which had a 30% mark-up. They had originally been bought from their suppliers for a unit cost of $1720.
D)
DR Accounts Receivable $19,453,200
DR Cost of Goods Sold $14,964,000
   CR Sales $19,453,200
   CR Inventory $14,964,000 This transaction increases the accounts receivable (asset) account, the sales (revenue) account, and the cost of goods sold (expense) account.
The inventory (asset) account has decreased. 8700 batches of pills x $1,720 = $14,964,000. The 30% markup applies to the sales and accounts receivable amounts, i.e. $14,964,000 x 1.30 = $19,453,200
42 Cirque du Lune is an organization which specializes in providing their customers with circus performances. Today, Cirque du Lune bought equipment which has a 5 year useful life, and which had a cost of $13000.
B)
DR Equipment $13,000
   CR Accounts Payable $13,000
The equipment (asset) and the accounts payable (liability) accounts have both increased by: $13,000. The useful life does not affect this original accounting entry, but it will be used to calculate depreciation of the asset in the future.
43 NY Fitness is a company which offers their customers a wide selection of gym memberships for professional sports teams. This December, NY Fitness has paid each of the company’s 2000 owners an annual dividend in the amount of $10000.
B)
DR Retained Earnings $20,000,000
   CR Cash $20,000,000
The retained earnings (equity) and the cash accounts have both decreased by: 2000 owners x $10,000 = $20,000,000
44 Air America sells several different types of global flights. This year, Air America has provided 2400 flights each of which earned revenues of $2770.
D)
DR Accounts Receivable $6,648,000
   CR Sales $6,648,000
The accounts receivable (asset) and the sales (revenue) accounts have both increased by: 2400 flights x $2,770 = $6,648,000
45 Kola-Nut Ltd is a market leader that is well-known for their brand of soft drinks. This month, Kola-Nut Ltd paid for 1 monthof rent for the warehouse room, which has a monthly costs of $2700.
B)
DR Rent expense $2,700
   CR Accounts Payable $2,700
The rent (expense) and the accounts payable (liability) accounts are both increased by one month’s worth of rent, which is $2,700.
46 David & Johnson provides their customers with legal services. Today, David & Johnson has paid cash to their supplier to fully pay off their account payable balance, which was $28000.
D)
DR Accounts Payable $28,000
   CR Cash $28,000
The accounts payable (liability) and cash (asset) accounts have both increased by $28,000.
47 Kola-Nut Ltd is a company which offers their customers a wide selection of soft drinks. This week, Kola-Nut Ltd purchased 5020 batches of soda bottles which were placed into the warehouse, and which had a per unit cost of $1200.
C)
DR Inventory $6,024,000
   CR Accounts Payable $6,024,000
There was an increase in the inventory (asset) account, and also an increase in the accounts payable (liability) account. 5020 batches of soda bottles x $1,200 = $6,024,000
48 Jameson & Jameson is an organization which specializes in providing their customers with soap products. Today, Jameson & Jameson received an upfront payment for 4070 truckloads of bars of soap which will be provided to the customer 6 months from now. The payment for each was $2300.
D)
DR Cash $9,361,000
   CR Unearned Revenue $9,361,000
The cash (asset) and the unearned revenue (liability) accounts have both increased by: 4070 truckloads of bars of soap x $2,300 = $9,361,000
49 Cirque du Lune is a corporation which sells circus performances. This month, Cirque du Lune made 1 monthly loan repayment towards their long-term note payable. The interest portion was 60% of the payment. The total amount paid in cash was $16000.
A)
DR Interest Expense $9,600
DR Loan Payable $6,400
   CR Cash $16,000
The interest (expense) account has increased by $16,000 x 0.6 = $9,600. The loan payable (liability) has decreased by $16,000 x 0.4 = $6,400. The cash (asset) account has decreased by the full amount of the payment, which is $16,000
50 Air America is a company which offers their customers a wide selection of global flights. This month, Air America has estimated that 30% of the accounts receivable might not end up being collectable, based on past experience. The accounts receivable will need to be adjusted from its current balance of $27000.
D)
DR Bad Debt expense $8,100
   CR Allowance for Doubtful Accounts $8,100
The bad debts (expense) and the allowance for doubtful accounts (contra-asset) have both increased by: 30% x $27,000 = $8,100