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AIPB book 1 sect 4
AIPB certified bookkeeper, mastering adjusting entries,
| Question | Answer |
|---|---|
| 1) PREPARE AJE: You collect a $12,000 advancefor 1 year's rentand credit rent revenue. At year end,3 months have elaspsed. | 1) Dr. Rent revenue 9,000 - Cr. Unearned rent revenue 9,000 - To record unearned revenue |
| 2) PREPARE AJE: You collect $12,000 advance for 1 year's rent and credit unearnedrent revenue. At year end, 3 months have elapsed. | 2) Dr. Unearned revenue 3,000 - Cr. Rent revenue 3,000 - To record revenue earned |
| 3) PREPARE AJE: Your company collects $20,000 advance for $100,000 order to produce widgets and credits revenue. At year end, your company has completed 12% of the job. | 3) Dr. Revenue 8,000 - Cr. Unearned revenue 8,000 - To record unearned revenue |
| 4) PREPARE AJE: Your company collects a $20,000 advance for a $100,000 job and credits unearned revenue. At year end, your company has completed 12% of the job. | 4) Dr. Unearned revenue 12,000 - Cr. Revenue 12,000 - To record revenue earned |
| 5)Your firm signs a contract to sell widget, products for a 20% commission on sales. During the year, widget pays your firm $7,000 in commissions, which you credit to unearned commission revenue. By year end, your firm achieves $25,000 in sales. | |
| 5) What AJE do you record on December 31? | 5) Dr. Unearned commissions revenue 5,000 - Cr. Commission revenue 5,000 - To record revenue earned |
| 6) On May 15, your company accepts a $28,000 advance on a 2-year, $70,000 painting job. On December 31, management tells you that it has completed 30% of the work. What original transaction entry do you record on May 15 if the amount recieved is recorded | |
| 6) as revenue? What adjusting entry do you record at year end? | 6) ORIGINAL ENTRY: Dr. Cash 28,000 - Cr. Painting revenue 28,000 - To record revenue AJE: Dr. Painting revenue 7,000 - Cr. Unearned painting revenue 7,000 - To reduce revenue to amount earned |
| 7)Three possible names for a revenue liability account are ______, _______ and ________ | 7) Unearned revenue, Revenue collected in advance, Revenue received in advance, Deferred revenue |
| 8) Unearned revenue appears on a balance sheet as a(n) ______ | 8) Liability |
| 9) Revenue is recorded when ________ | 9) Earned |
| 10) For cash collected in advance, debit ______ and credit ______ | 10) Cash, Revenue or Unearned revenue or Deferred revenue |
| 11) TRUE OR FALSE: If you collect 3 months rent on December 1 and your year ends December 31, the revenue earned will be less than the cash collectds. | 11) True |
| 12) A company collects cash in advance for a job and credits revenue. It earns part of the advance completing work durin the year. if it omits the proper AJE at year end, liabilities will be >>>>> | 12)Understated |
| 13) A company collects cash in advance for a job, credits deferred revenue, then completes part of the work. If it fails to record an AJE a year end, liabilities will be ........ | 13) Overstated |
Created by:
cidhart
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