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linda_us
linda_us, Master's Degree
Category: Multiple Problems
Satisfied Customers: 7018
Experience:  Business Analyst and Solution Consultant with over 9 years of experience.
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For Linda: Good evening,are you available for some ques

Resolved Question:

For Linda:

Good evening,are you available for some questions
Submitted: 2 years ago.
Category: Multiple Problems
Expert:  linda_us replied 2 years ago.
Yes, I am.
Customer: replied 2 years ago.
For Linda

A newspaper ad submitted and published this week, with the agreement to pay for it next week would, in the newspaper's records:

Increase assets and increase revenues.

Increase assets and decrease liabilities.

Increase assets and increase expenses.

Have no effect on total assets.

The accountant at Abco, Inc. made an adjusting entry at the end of February to accrue interest on a note receivable from a customer. The effect of this entry is to:

Decrease ROI for February.

Increase ROI for February.

Decrease working capital at February 28.

Decrease the acid-test ratio at February 28.

In the buyer's records, the purchase of merchandise on account would:

Increase assets and increase expenses.

Increase assets and increase liabilities.

Increase liabilities and increase paid-in capital.

Have no effect on total assets.

The effect of an adjustment is:

To correct an entry that was not in balance.

To increase the accuracy of the financial statements.

To record transactions not previously recorded.

To close the books.

Wisdom Co. has a note payable to its bank. An adjustment is likely to be required on Wisdom's books at the end of every month that the loan is outstanding to record the:

Amount of interest paid during the month.

Amount of total interest to be paid when the note is paid off.

Amount of principal payable at the maturity date of the note.

Accrued interest expense for the month.

When a firm purchases supplies for its business:

The supplies account should always be debited.

The supplies expense account should always be debited.

Either the supplies account or the supplies expense account should be credited.

An adjustment will probably be required as supplies are used.

Expert:  linda_us replied 2 years ago.
Working on it.
Customer: replied 2 years ago.
for linda

ok
Expert:  linda_us replied 2 years ago.
linda_us, Master's Degree
Satisfied Customers: 7018
Experience: Business Analyst and Solution Consultant with over 9 years of experience.
linda_us and 2 other Multiple Problems Specialists are ready to help you
Customer: replied 2 years ago.
For Linda: (please confirm receipt of this second batch of questions)

The Interest Receivable account for February showed transactions totaling $8,500 and an adjustment of $11,200.All of the following responses are correct except:

The transactions probably resulted from accruing interest income earned.

The transactions were probably entered on the credit side of the account.

The adjustment was probably for cash receipts of interest receivable accrued in prior months.

The balance in the interest receivable account decreased $2,700.

In the seller's records, the sale of merchandise on account would:

Increase assets and increase expenses.

Increase assets and decrease liabilities.

Increase assets and increase paid-in capital.

Increase assets and decrease revenues.

The balance in the Accrued Wages Payable account increased from $12,200 at the beginning of the month to $15,000 at the end of the month. Wages accrued during the month totaled $61,000.

Wages paid during the month totaled $58,200.

Wages paid during the month totaled $64,800.

Wages expense for the month totaled $58,200.

Wages expense for the month totaled $76,000.

The effect of an adjustment on the financial statements is usually to:

make the balance sheet balance.

increase net income.

increase the accuracy of both the balance sheet and income statement.

match revenues and assets.

When a firm purchases supplies for use in its business, and the cost of the supplies purchased is recorded as an asset, the following adjustment to recognize the cost of supplies used will probably be required:

A. Dr. Supplies

Cr Accounts Payable

B. Dr Supplies

Cr Supplies Expense

C. Dr Supplies Expense

Cr. Supplies

D. No adjustment will probably be required

Expert:  linda_us replied 2 years ago.
Got it.
Customer: replied 2 years ago.
thanks
Expert:  linda_us replied 2 years ago.
linda_us, Master's Degree
Satisfied Customers: 7018
Experience: Business Analyst and Solution Consultant with over 9 years of experience.
linda_us and 2 other Multiple Problems Specialists are ready to help you
Customer: replied 2 years ago.
For Linda:

(Last one for tonight)

To accrue $5,500 of employee salaries for the last week of February, the employer's journal entry is:


Dr Salaries Expense 5500

Cr Cash 5500




Dr Saleries payable 5500
Cr Cash 5500

Dr. Salaries expense 5500
Cr fee revenue 5500
Expert:  linda_us replied 2 years ago.
Dr Salaries Expense 5500
Cr Salaries payable 5500

(Is this the second choice)

Customer: replied 2 years ago.
For Linda

last choice for above question is
Dr Salaries expense 5500
Cr Salaries payable 5500

Yes, what you wrote above is the second choice
Expert:  linda_us replied 2 years ago.
The answer is

Dr Salaries Expense 5500
Cr Salaries payable 5500

Regards

Linda
linda_us, Master's Degree
Satisfied Customers: 7018
Experience: Business Analyst and Solution Consultant with over 9 years of experience.
linda_us and 2 other Multiple Problems Specialists are ready to help you
Customer: replied 2 years ago.
For Linda:

in the buyer's records, the purchase of merchandise on account would:
increase assets and increase liabilities

Im not clear on tis one,

Why does it increase assets? the buyer is incurring a cost.
Expert:  linda_us replied 2 years ago.
Inventory is an asset for the buyer (as buyer will derive future benefits from it when sold) and the since he purchasing it on Account hence liabilites will increase. When this purchased inventory will be sold only then it would become cost but till then its an asset.

Customer: replied 2 years ago.
for linda:

I understand the first part of your response but you also say when it is sold it becomes a cost, is it also catagorized as revenue or owners equity once it is sold and a profit is realized?
Expert:  linda_us replied 2 years ago.
See here you are talking in terms of accouting equation.

Let assume you purchased invetory for $200. (The asset is $200)

Now you sold it for $250 cash. (Here you received cash of $250 but your other asset is reduced by $200 but there is difference of $50 ...read further)

Now to calculate profit we subtract expenses from revenue. From above the revenue is $250 and inventory sold for $200 would be treated as cost.
(Hence now inventory sold is treated as cost)

So profit = 250- 200 = $50 (This $50 would be the part of owner equity)

I hope this help.
Customer: replied 2 years ago.
For Linda:

Excellent, got it. I have to do some reading during the next few days, will probably contact you toward the middle or end of the week. Thanks for your help.
Have a good night! Smile
Expert:  linda_us replied 2 years ago.
Good night.
Customer: replied 2 years ago.
thank you

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