| 2. Minstrel & Company provides music for special occasions. On January 14, Minstrel & Co. was hired for an upcoming wedding at an agreed upon fee of $7,000. The wedding was scheduled for May 23. As part of the agreement, Minstrel & Co. receives half of the fee at the end of April with the remaining amount received at the time of the wedding. How would Minstrel & Co. record the receipt of the final amount on May 23? |
| | A. Debit to Service Revenue | | | B. Debit to Unearned Revenue | | | C. Credit to Cash | | | D. Credit to Unearned Revenue | | | E. Credit to Accounts Receivable | 3. The following account balances were drawn from the records of Hatters Tea Company on December 31, 2012: | Cash | $30,000 | Expenses | $17,000 | | Dividends | $ 2,000 | Retained Earnings, beginning | $ 6,000 | | Accounts Payable | $24,500 | Accounts Receivable | $15,000 | | Utilities Payable | $ 5,500 | Supplies | $ 6,000 | | Common Stock | $ 9,000 | Revenues | $25,000 | | | | | | What is ending retained earnings for Hatters Tea Company? | | | A. 21,000 | | | B. 14,000 | | | C. 51,000 | | | D. 12,000 | | | E. 6,000 | | 4. Minstrel & Company provides music for special occasions. On January 14, Minstrel & Co. was hired for an upcoming wedding at an agreed upon fee of $7,000. The wedding was scheduled for May 23. As part of the agreement, Minstrel & Co. receives half of the fee at the end of April with the remaining amount received at the time of the wedding. How would Minstrel & Co. record the receipt of the initial amount in April? | | | A. Credit to Service Revenue | | | B. Credit to Unearned Revenue | | | C. Debit to Unearned Revenue | | | D. Credit to Cash | | | E. Credit to Accounts Receivable | | 5. Adjusting entries typically involve which transactions: | | | A. Those that occur continually over a period of time | | | B. Those between the company and its stockholders. | | | C. Those necessary to close the temporary accounts to the Retained Earnings account | | | D. Those dealing with the Cash account | | | E. Those that involve calculation errors or misapplication of accounting rules | | 6. How many of the following transactions would decrease net income? Purchased land with cash Paid cash for utilities received in the current period Paid employees for salaries earned in the current period Repaid money previously borrowed from the bank Purchased supplies for future use Paid rent for the current month (not in advance) | | | 7. The company has a beginning cash balance of $7,000. Using the following information, calculate the ending balance of cash: -Note receivable collected by the bank = $5,000 -Checks outstanding = $8,000 -Bank service fees = $1,000 -Non-sufficient funds (NSF) checks = $2,000 -Deposits Outstanding = $11,000 | | | A. $10,000 | | | B. $6,000 | | | C. $5,000 | | | D. $9,000 | | | E. $8,000 | | | | | | |
