Question

6. The net income reported on the income statement is $90,000. However, adjusting entries have not...

6. The net income reported on the income statement is $90,000. However, adjusting entries have not been made at the end of the period for supplies expense of $2,700 and accrued salaries of $1,300. Net income, as corrected, is

a. $87,300

b. $90,000

c. $88,700

d. $86,000

7. The type of account and normal balance of Unearned Rent is

a. revenue, credit

b. expense, debit

c. liability, credit

d. liability, debit

8. Supplies are recorded as assets when purchased. Therefore, the credit to supplies in the adjusting entry is for the amount of supplies

a. that are in the ending balance

b. purchased

c. used

d. either used or remaining

9. Which of the following is an example of a prepaid expense?

a. Supplies

b. Accounts Receivable

c. Unearned Subscriptions

d. Unearned Fees

10. Fees receivable would appear on the balance sheet as a(n)

a. asset

b. liability

c. fixed asset

d. unearned revenue

Homework Answers

Answer #1

Answers :

6) Option D ($86,000)

Explanation : Net income - Supplies Expense - Accrued Salary

= 90000-2700-1300

= $86,000

7) Option C (Liability,credit)

Explanation : Unearned revenue in general has the credit balance and it is a liability account.

8) Option C (Used)

Explanation : The credit to supplies in the adjusting entry is for the amount of supplies which were used for production.

9) Option D (Unearned Fees)

Explanation : Unearned Fees is an example of a prepaid expense.

10) Option A (as an Asset)

Explanation : Fees receivable would appear on the balance sheet as an Asset.

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