Accounting help

[rejosu]

Thanks bro

The only one I think I fukced up on is the Gamma Company problem, time was down to :56 seconds

No prob, misc brah, I tutor people with accounting every day, I wish I could help more misc brahs with it.

Shoot me a PM if you ever need help again!

[Ace Thedics]

No prob, misc brah, I tutor people with accounting every day, I wish I could help more misc brahs with it.

Shoot me a PM if you ever need help again!

Thanks brah, come to think of it, I'm gonna go ahead and knock all of them out in one sitting. Might need help again in these few minutes

[letsgetlosttt]

A company shows a $900 balance in Prepaid Insurance in the Unadjusted Trial Balance columns of the work sheet. The Adjustments columns show expired insurance of $400. This adjusting entry results in:
$400 more in net income.
$400 less in net income.
$400 difference between the debit and credit columns of the Unadjusted Trial Balance.
$400 of prepaid insurance.
An error in the financial statements.

Which of the following statements is incorrect?
Permanent accounts is another name for nominal accounts.
Temporary accounts carry a zero balance at the beginning of each accounting period.
The Income Summary account is a temporary account.
Real accounts remain open as long as the asset, liability, or equity items recorded in the accounts continue in existence.
The closing process applies only to temporary accounts.


An error is indicated if the following account has a balance appearing on the post-closing trial balance: (Points : 1)
John Meyer, Capital
Building
Accumulated Depreciation--Building
Supplies Expense
Salaries Payable

At the beginning of 2007, Gamma Company's balance sheet reported Total Assets of $175,000 and Total Liabilities of $85,000. During 2007, the company reported total revenues of $241,000 and expenses of $150,000. Also, owner withdrawals during 2007 totaled $46,000. Assuming no other changes to owner's capital, the balance in the owner's capital account at the end of 2007 would be:
$135,000.
$90,000.
$196,000.
cannot be determined from the information provided.
$175,000.

I did amazingly well in accounting/may pursue CMA... I'm pretty sure my answers are correct, definitely sure that they're more correct than some of the other answers youve been given.. so here goes..


1) $400 of prepaid insurance
Okay so when you're doing a general ledger you need to a debit and credit for each entry. Since you've used 400$ of you're prepaid insurance you're going to need to credit your prepaid insurance and debit your insurance expense. I can explain reasons why it shouldn't be the other ones if you need me to

2) Temporary accounts require a zero balance...
I'm not 100% on this one but it makes sense that you'd want to close out your "temporary accounts" because they're just that, temporary. I'm almost positive that you need to report for, adjust and close any temporary accounts at the end of each period which would give you a zero balance in the next!

3) Accumulated Depreciation - Building
You should have accounted for this by subsequently debiting your depreciation expense which would make it a zero balance

4) 90,000
I didn't really look at this one too long but I'm pretty sure you dont even need to worry about the other numbers and just focus on assets - liabilities here!

Hope I'm not too wrong
edit: ooops.

ps: this really isn't my first post.

[Ace Thedics]

What is the proper adjusting entry at December 31, the end of the accounting period, if the balance in the prepaid insurance account is $7,750 before adjustment, and the unexpired amount per analysis of policies is, $3,250?
Debit Insurance Expense, $3,250; credit Prepaid Insurance, $3,250.
Debit Insurance Expense, $4,500; credit Prepaid Insurance, $4,500.
Debit Prepaid Insurance, $4,500; credit Insurance Expense, $4,500.
Debit Insurance Expense, $7,750; credit Prepaid Insurance, $7,750.
Debit Cash, $7,750; Credit Prepaid Insurance, $7,750.

On March 1, 2007, Mnc, Inc. paid Xenon Publishing Company $16,920 for a 3-year subscription for five different magazines. The subscriptions are starting immediately. What is the adjusting entry that should be recorded by Xenon on December 31, 2007? (
debit Unearned Fees, $16,920; credit Fees Earned, $16,920.
debit Unearned Fees, $5,640; credit Fees Earned, $5,640.
debit Unearned Fees, $4,700; credit Fees Earned, $4,700.
debit Fees Earned, $16,920; credit Unearned Fees, $16,920.
debit Fees Earned, $4,700; credit Unearned Fees, $4,700.

PPW Co. leased a portion of its store to another company for eight months beginning on October 1, 2007, at a monthly rate of $800. This other company paid the entire $6,400 cash on October 1, which PPW Co. recorded as unearned revenue. The journal entry made by PPW Co. at year- end on December 31, 2007 would include:
A debit to Rent Earned for $2,400.
A credit to Unearned Rent for $2,400.
A debit to Cash for $6,400.
A credit to Rent Earned for $2,400.
A debit to Unearned Rent for $4,000.

A company made no adjusting entry for accrued and unpaid employee wages of $28,000 on December 31. This oversight would:
Understate net income by $28,000.
Overstate net income by $28,000.
Have no effect on net income.
Overstate assets by $28,000.
Understate assets by $28,000.

[G8GXP]

I did amazingly well in accounting/may pursue CMA... I'm pretty sure my answers are correct, definitely sure that they're more correct than some of the other answers youve been given.. so here goes..


1) $400 of prepaid insurance
Okay so when you're doing a general ledger you need to a debit and credit for each entry. Since you've used 400$ of you're prepaid insurance you're going to need to credit your prepaid insurance and debit your insurance expense. I can explain reasons why it shouldn't be the other ones if you need me to

2) Temporary accounts require a zero balance...
I'm not 100% on this one but it makes sense that you'd want to close out your "temporary accounts" because they're just that, temporary. I'm almost positive that you need to report for, adjust and close any temporary accounts at the end of each period which would give you a zero balance in the next!

3) Accumulated Depreciation - Building
You should have accounted for this by subsequently debiting your depreciation expense which would make it a zero balance

4) 90,000
I didn't really look at this one too long but I'm pretty sure you dont even need to worry about the other numbers and just focus on assets - liabilities here!

Hope I'm not too wrong

ps: this really isn't my first post.

WOW, good thing he didn't see your answers first!

[G8GXP]

What is the proper adjusting entry at December 31, the end of the accounting period, if the balance in the prepaid insurance account is $7,750 before adjustment, and the unexpired amount per analysis of policies is, $3,250?
Debit Insurance Expense, $3,250; credit Prepaid Insurance, $3,250.
Debit Insurance Expense, $4,500; credit Prepaid Insurance, $4,500.
Debit Prepaid Insurance, $4,500; credit Insurance Expense, $4,500.
Debit Insurance Expense, $7,750; credit Prepaid Insurance, $7,750.
Debit Cash, $7,750; Credit Prepaid Insurance, $7,750.

On March 1, 2007, Mnc, Inc. paid Xenon Publishing Company $16,920 for a 3-year subscription for five different magazines. The subscriptions are starting immediately. What is the adjusting entry that should be recorded by Xenon on December 31, 2007? (
debit Unearned Fees, $16,920; credit Fees Earned, $16,920.
debit Unearned Fees, $5,640; credit Fees Earned, $5,640.
debit Unearned Fees, $4,700; credit Fees Earned, $4,700.
debit Fees Earned, $16,920; credit Unearned Fees, $16,920.
debit Fees Earned, $4,700; credit Unearned Fees, $4,700.

PPW Co. leased a portion of its store to another company for eight months beginning on October 1, 2007, at a monthly rate of $800. This other company paid the entire $6,400 cash on October 1, which PPW Co. recorded as unearned revenue. The journal entry made by PPW Co. at year- end on December 31, 2007 would include:
A debit to Rent Earned for $2,400.
A credit to Unearned Rent for $2,400.
A debit to Cash for $6,400.
A credit to Rent Earned for $2,400.
A debit to Unearned Rent for $4,000.

A company made no adjusting entry for accrued and unpaid employee wages of $28,000 on December 31. This oversight would:
Understate net income by $28,000.
Overstate net income by $28,000.
Have no effect on net income.
Overstate assets by $28,000.
Understate assets by $28,000.

Debit Insurance Expense, $4,500; credit Prepaid Insurance, $4,500.
debit Fees Earned, $4,700; credit Unearned Fees, $4,700. (I am wrong on this!) Rejosu is correct.
A credit to Rent Earned for $2,400.
Overstate net income by $28,000.

[rejosu]

What is the proper adjusting entry at December 31, the end of the accounting period, if the balance in the prepaid insurance account is $7,750 before adjustment, and the unexpired amount per analysis of policies is, $3,250?
Debit Insurance Expense, $3,250; credit Prepaid Insurance, $3,250.
Debit Insurance Expense, $4,500; credit Prepaid Insurance, $4,500.
Debit Prepaid Insurance, $4,500; credit Insurance Expense, $4,500.
Debit Insurance Expense, $7,750; credit Prepaid Insurance, $7,750.
Debit Cash, $7,750; Credit Prepaid Insurance, $7,750.

On March 1, 2007, Mnc, Inc. paid Xenon Publishing Company $16,920 for a 3-year subscription for five different magazines. The subscriptions are starting immediately. What is the adjusting entry that should be recorded by Xenon on December 31, 2007? (
debit Unearned Fees, $16,920; credit Fees Earned, $16,920.
debit Unearned Fees, $5,640; credit Fees Earned, $5,640.
debit Unearned Fees, $4,700; credit Fees Earned, $4,700.
debit Fees Earned, $16,920; credit Unearned Fees, $16,920.
debit Fees Earned, $4,700; credit Unearned Fees, $4,700.

PPW Co. leased a portion of its store to another company for eight months beginning on October 1, 2007, at a monthly rate of $800. This other company paid the entire $6,400 cash on October 1, which PPW Co. recorded as unearned revenue. The journal entry made by PPW Co. at year- end on December 31, 2007 would include:
A debit to Rent Earned for $2,400.
A credit to Unearned Rent for $2,400.
A debit to Cash for $6,400.
A credit to Rent Earned for $2,400.
A debit to Unearned Rent for $4,000.

A company made no adjusting entry for accrued and unpaid employee wages of $28,000 on December 31. This oversight would:
Understate net income by $28,000.
Overstate net income by $28,000.
Have no effect on net income.
Overstate assets by $28,000.
Understate assets by $28,000.

If you would like work, I can provide it real quick.. let me know.

[letsgetlosttt]

What is the proper adjusting entry at December 31, the end of the accounting period, if the balance in the prepaid insurance account is $7,750 before adjustment, and the unexpired amount per analysis of policies is, $3,250?
Debit Insurance Expense, $3,250; credit Prepaid Insurance, $3,250.
Debit Insurance Expense, $4,500; credit Prepaid Insurance, $4,500.
Debit Prepaid Insurance, $4,500; credit Insurance Expense, $4,500.
Debit Insurance Expense, $7,750; credit Prepaid Insurance, $7,750.
Debit Cash, $7,750; Credit Prepaid Insurance, $7,750.

On March 1, 2007, Mnc, Inc. paid Xenon Publishing Company $16,920 for a 3-year subscription for five different magazines. The subscriptions are starting immediately. What is the adjusting entry that should be recorded by Xenon on December 31, 2007? (
debit Unearned Fees, $16,920; credit Fees Earned, $16,920.
debit Unearned Fees, $5,640; credit Fees Earned, $5,640.
debit Unearned Fees, $4,700; credit Fees Earned, $4,700.
debit Fees Earned, $16,920; credit Unearned Fees, $16,920.
debit Fees Earned, $4,700; credit Unearned Fees, $4,700.

PPW Co. leased a portion of its store to another company for eight months beginning on October 1, 2007, at a monthly rate of $800. This other company paid the entire $6,400 cash on October 1, which PPW Co. recorded as unearned revenue. The journal entry made by PPW Co. at year- end on December 31, 2007 would include:
A debit to Rent Earned for $2,400.
A credit to Unearned Rent for $2,400.
A debit to Cash for $6,400.
A credit to Rent Earned for $2,400.
A debit to Unearned Rent for $4,000.

A company made no adjusting entry for accrued and unpaid employee wages of $28,000 on December 31. This oversight would:
Understate net income by $28,000.
Overstate net income by $28,000.
Have no effect on net income.
Overstate assets by $28,000.
Understate assets by $28,000.

1) b
2) b
3) b
4) not really sure on this one but maybe c because it would overstate your cash balance i think...

[T2TL]

Your whole test is trial balances and closing entries? I did this stuff a while back, everything seems worded weird though. Probably just how it translates from the test onto here though. They are mult. choice?

[letsgetlosttt]

Debit Insurance Expense, $4,500; credit Prepaid Insurance, $4,500.
debit Fees Earned, $4,700; credit Unearned Fees, $4,700.
A credit to Rent Earned for $2,400.
Overstate net income by $28,000.

explain d please.
i was about to argue C but then I realized you were right. I figured Rent Earned would more likely have a debit balance but then I realized that its actually Unearned revenue that would have it... Is this American standards? I've never seen "Rent Earned" used?

[T2TL]

explain d please.
i was about to argue C but then I realized you were right. I figured Rent Earned would more likely have a debit balance but then I realized that its actually Unearned revenue that would have it... Is this American standards? I've never seen "Rent Earned" used?

I think you're right with the last one

[rejosu]

A company made no adjusting entry for accrued and unpaid employee wages of $28,000 on December 31. This oversight would:
Understate net income by $28,000.
Overstate net income by $28,000.
Have no effect on net income.
Overstate assets by $28,000.
Understate assets by $28,000.

The question means you didn't record your employees making wages, even though they did... you would normally record an expense at the end of a period computing all of the units of labor worked at their respective rates..


I.E.
Debit Salary/Wage Expense
Credit Salary/Wage Payable

[rejosu]

Rent Earned seems to just mean Rent Revenue in this case.

[Ace Thedics]

Thanks guys, this one seems fairly easy

A company earned $5,000 in net income for October. Its net sales for October were $100,000. Its profit margin is:

50 percent
5 percent
500 percent
$95,000
20 percent


The accounting principle that requires revenue to be reported when earned is the:
Objectivity principle.
Revenue recognition principle.
Time period principle.
Accrual reporting principle.
Going-concern principle.

i think this is accrual

Prior to recording adjusting entries, the Office Supplies account had a $359 debit balance. A physical count of the supplies showed $105 of unused supplies available. The required adjusting entry is: (Points : 1)
Debit Office Supplies $105 and credit Office Supplies Expense $105.
Debit Office Supplies Expense $105 and credit Office Supplies $105.
Debit Office Supplies Expense $254 and credit Office Supplies $254.
Debit Office Supplies $254 and credit Office Supplies Expense $254.
Debit Office Supplies $105 and credit Supplies Expense $254.


A company made no adjusting entry for accrued and unpaid employee salaries of $9,000 on December 31. The entry to record the adjusting entry should have been: (Points : 1)
debit Salary Expense, $9,000; credit Cash, $9,000
debit Salary Expense, $9,000; credit Fees Earned, $9,000
debit Salary Expense, $9,000; credit Prepaid Salary, $9,000
debit Salary Expense, $9,000; credit Salaries Payable, $9,000
debit Salaries Payable, $9,000; credit Salary Expense

[rejosu]

Thanks guys, this one seems fairly easy

A company earned $5,000 in net income for October. Its net sales for October were $100,000. Its profit margin is:

50 percent
5 percent
500 percent
$95,000
20 percent


The accounting principle that requires revenue to be reported when earned is the:
Objectivity principle.
Revenue recognition principle.
Time period principle.
Accrual reporting principle.
Going-concern principle.


Prior to recording adjusting entries, the Office Supplies account had a $359 debit balance. A physical count of the supplies showed $105 of unused supplies available. The required adjusting entry is: (Points : 1)
Debit Office Supplies $105 and credit Office Supplies Expense $105.
Debit Office Supplies Expense $105 and credit Office Supplies $105.
Debit Office Supplies Expense $254 and credit Office Supplies $254.
Debit Office Supplies $254 and credit Office Supplies Expense $254.
Debit Office Supplies $105 and credit Supplies Expense $254.


A company made no adjusting entry for accrued and unpaid employee salaries of $9,000 on December 31. The entry to record the adjusting entry should have been: (Points : 1)
debit Salary Expense, $9,000; credit Cash, $9,000
debit Salary Expense, $9,000; credit Fees Earned, $9,000
debit Salary Expense, $9,000; credit Prepaid Salary, $9,000
debit Salary Expense, $9,000; credit Salaries Payable, $9,000
debit Salaries Payable, $9,000; credit Salary Expense

Those are right.

[T2TL]

I think it's revenue recognition not accrual

edit- guy above me is too fast lol

[letsgetlosttt]

I think you're right with the last one

I dont know I thought I was too but I tend to doubt myself and talk myself out of my answers.. If only the summer time didn't see an exponential drop in my brain cell production maybe I'd actually remember....

[rejosu]

I think it's revenue recognition not accrual

edit- guy above me is too fast lol

Its all good, Brah, reps for people helping with accouting!

[Ace Thedics]

I think it's revenue recognition not accrual

edit- guy above me is too fast lol

this, thankfully.

I think the powerpoint i read through is fubared, I immediately hit accrual for that one.

last one

Adjusting entries are journal entries made at the end of an accounting period for the purpose of:
Updating liability and asset accounts to their proper balances.
Assigning revenues to the periods in which they are earned.
Assigning expenses to the periods in which they are incurred.
Assuring that financial statements reflect the of revenues earned and the expenses incurred.
All of the above.

[T2TL]

Its all good, Brah, reps for people helping with accouting!

repped back. I just had some intense hw questions to do last week and came on the misc for help. It was last minute and big questions, but one guy helped a bit lol

[rejosu]

this.

I think the powerpoint i read through is fubared, I immediately hit accrual for that one.

last one

Adjusting entries are journal entries made at the end of an accounting period for the purpose of:
Updating liability and asset accounts to their proper balances.
Assigning revenues to the periods in which they are earned.
Assigning expenses to the periods in which they are incurred.
Assuring that financial statements reflect the of revenues earned and the expenses incurred.
All of the above.

Classic all of the above.

[letsgetlosttt]

Its all good, Brah, reps for people helping with accouting!

why are you just tutoring and not pursuing a career in accounting as a CA if you don't mind me asking? Not that I'm assuming you have all the credentials, just that you have an affinity for it and most people don't. I'm still in school and trying to decide whether to go the accounting route or the finance route or the human resources route so it helps to hear others opinions of the industries.

[Ace Thedics]

Thanks guys.

Had to juggle this and 4 java programs due Saturday.

Then the GWT this same Saturday. Got this taken care of.

[rejosu]

why are you just tutoring and not pursuing a career in accounting as a CA if you don't mind me asking? Not that I'm assuming you have all the credentials, just that you have an affinity for it and most people don't. I'm still in school and trying to decide whether to go the accounting route or the finance route or the human resources route so it helps to hear others opinions of the industries.

Also still in school, misc brah, I have internship with Ernst & Young in Chicago next Winter during busy season. I feel the misc is the only thing that will keep me going during work.

Definitely don't go HR- If you want to do that one day, you can get in a rotational program and learn everything you need to do it in the company, don't need the "education & classes" for it.

Finance/Accounting are both respectable. I prefer accounting, and have heard accounting is more marketable major primarily because accounting majors can generally do all the work a finance major can do (because they have to be able to, so they can represent that company's cash flows properly -- accounting has a lot of rules that must be learned and can't be derived, like equations can be in finance. You simply have to spend the time learning the accounting rules, you can't just learn the basics and be expected to do it)

[letsgetlosttt]

Also still in school, misc brah, have internship with Ernst & Young in Chicago next Winter during busy season. I feel the misc is the only thing that will keep me going.

Definitely don't go HR- If you want to do that one day, you can get in a rotational program and learn everything you need to do it in the company, don't need the "education & classes" for it.

Finance/Accounting are both respectable, I prefer accounting, and have heard accounting is more marketable major primarily because accounting majors can generally do all the work a finance major can do.

It's not really that important what I choose to do because either way my degree will be Bachelor of Commerce, __(insert specialization here)___ but on a resume I could easily tailor that to include or not include specialization relative to the job.

Do you have a CGA/CMA/CA program in the states or are you on a different system?
My biggest problem is:

Do I take 13 more classes and graduate with B.Comm, HRM or take 20 more classes and graduate with either B.Comm HRM OR Accounting and then work toward both specialist designations?

Gah, life...

Thats cool that you like accounting though. My accounting profs have been some of the best academic influences I've had! Good luck in your internship man

[rejosu]

My degree will be the same thing-- "Bachelor of Science - Business Administration; Specialization: Accounting"

In business, you will only receive a general degree with a specialization and while you could try to tailor it, it would still show, Accounting and Finance are the hardest specializations, but they do end up allowing you to do anything in a business, whereas another specialization might end up hurting you by limiting the scope of what you can do (not always true).

In the U.S. we have a very similar system, instead of "Certified General Accountant" its "Certified Public Accountant" - allowing you to state Financial Statements of Publicly traded companies to the United States Securities & Exchange Commission.

I really recommend you go Finance or Accounting, honestly, it will set you up much better.

[letsgetlosttt]

My degree will be the same thing-- "Bachelor of Science - Business Administration; Specialization: Accounting"

In business, you will only receive a general degree with a specialization and while you could try to tailor it, it would still show, Accounting and Finance are the hardest specializations, but they do end up allowing you to do anything in a business, whereas another specialization might end up hurting you by limiting the scope of what you can do (not always true).

In the U.S. we have a very similar system, instead of "Certified General Accountant" its "Certified Public Accountant" - allowing you to state Financial Statements of Publicly traded companies to the United States Securities & Exchange Commission.

I really recommend you go Finance or Accounting, honestly, it will set you up much better.

Interesting. Thanks for the advice, I appreciate it. My only worry with the Finance and accounting fields are the work life balance. I mean at year end and even month end there's some pretty nasty overtime involved. I'm not one who wants to live to work, but work to live.

[G8GXP]

I have hired finance majors and accounting majors.

I end up firing many more finance types and keeping the accounting types.

I can't comment on HR other than they make be build up an enormous file before I fire the finance people.

[Ace Thedics]

So far, think these are the ones I need help on

A buyer failed to take advantage of the vendor's credit terms of 5/15, n/45, but instead paid the invoice in full at the end of 60 days. By not taking advantage of the cash discount, the buyer lost the equivalent of ____________ annual interest on the amount of the purchase.

70.83%
1.22%
60.83%
11.22%
40.56%

A company's current assets were $17,810, its quick assets were $12,030 and its current liabilities were $13,230. Its quick ratio equals:

.91
1.35
.74
1.45
1.1

A company had sales of $375,000 and its gross profit was $157,500. Its cost of goods sold equals:
$(217,000).
$ 375,000.
$ 157,500.
$ 217,500.
$ 532,500.

A company had sales of $685,000 and cost of goods sold of $294,000. Its gross margin equals:

$685,000
$391,000
$294,000
$(391,000)
$979,000

[rejosu]

Not sure on the first one, I believe 40.56 %
.91
$ 217,500
$391,000