1)

A) Accrued revenues at the end of one accounting period result in cash receipts in a future period. True or false

B) Profit margin can also be called return on sales. True or false

C) The accrual basis of accounting recognizes revenues when cash is received from customers, regardless of when the goods or services are provided. True or false

2) Holman Company owns equipment with an original cost of $98,600 and an estimated salvage value of $6,800 that is being depreciated at $15,300 per year using the straight-line depreciation method, and only prepares adjustments at year-end. The adjusting entry needed to record annual depreciation is:

Multiple Choice

• Debit Depreciation Expense, $15,300; credit Equipment, $15,300.

• Debit Equipment, $15,300; credit Accumulated Depreciation, $15,300.

• Debit Depreciation Expense, $8,500; credit Accumulated Depreciation, $8,500.

• Debit Depreciation Expense, $8,500; credit Equipment, $8,500.

• Debit Depreciation Expense, $15,300; credit Accumulated Depreciation, $15,300.

3) Under the alternative method for accounting for unearned revenue, which of the following pairs of journal entry formats is correct?

Multiple Choice

• Initial Entry	Adjusting Entry
  Cash	Unearned Revenue
  Unearned Revenue	Consulting Revenue

• Initial Entry	Adjusting Entry
  Cash	Consulting Revenue
  Consulting Revenue	Unearned Revenue

• Initial Entry	Adjusting Entry
  Cash	Unearned Revenue
  Unearned Revenue	Cash

• Initial Entry	Adjusting Entry
  Consulting Revenue	Unearned Revenue
  Cash	Consulting Revenue

• Initial Entry	Adjusting Entry
  Cash	Consulting Revenue
  Unearned Revenue	Unearned Revenue