11.2.1 3.14.1.5.16.17.18.1.9.10 | 11 | 12 | 13 | 14 15 | 16 17 18 19 Styles Editing 5. If throughout an accounting period the fees for legal services paid in advance by clients are recorded in an account called Unearned Legal Services Revenue, the end-of-period adjusting entry to record the portion of these fees that has been earned is A Debit Cash and credit Legal Service Revenue B. Debit Cash and credit Unearned Legal Service Revenue C Debit Unearned Legal Service Revenue and credit Legal Service Revenue D. Debit Legal Service Revenue and credit Unearned Legal Service Revenue E. Some other entry 10. On December 1, your company paid its insurance agent $2.400 for the annual insurance premium covering the twelve-month period beginning on December 1. The $2.400 payment was recorded on December 1 with a debit to the income statement account Insurance Expense and a credit to the current asset Cash. Your company prepares monthly financial statements at the end of each calendar month. The entry to be made at the December 31 month end to adjust the accounts is A Debit Prepaid insurance 2200; Credit Insurance Expense 2200 B. Debit Insurance Expense 200, Credit Prepaid Insurance 200 C. Debit Prepaid Insurance 200, Credit Insurance Expense 200 D. Debit Insurance Expense 2200, Credit Prepaid Insurance 2200 E. Debit Insurance Expense 2400; Credit Prepaid Insurance 2400 6. For a prepaid expense, the adjusting entry would A. Result in a debit to an expense account and a credit to an asset account B. Cause a prepaid expense to be overstated and liabilities to be understated C. Result in a credit to an expense account and a debit to an asset account D. Result in a debit to a liability account and a credit to an asset account E. Decrease cash Q1. (20 marks) 7. On January 1, 2020. Peach Company purchased a five-year insurance policy for $5,000. If the cost was debited to Prepaid Insurance, the adjusting entry at the end of 2020 is A Debit Prepaid Insurance, $1,800, credit Cash, $1,800 Debit Prepaid Insurance, $1,000, credit Insurance Expense, $1,000 C. Debit Prepaid Insurance, $360, credit Insurance Expense, $360 D. Debit Insurance Expense, $360, credit Prepaid Insurance, $360 E Debit Insurance Expense, $1,000, credit Prepaid Insurance $1,000 The Surrey Service Company issued financial statements for last year but failed to include the following adjusting entries: (A) Accrued service revenues earned of $2,300. (B) Depreciation expense of $5,000. (C) Office supplies used, $2,100. (D) Accrued salaries of $3,400. (E) Revenues of $4,600, originally recorded as uneamed, but earned by the end of the year. Determine the correct amounts for last year's financial statements by completing the following schedule: Assets $310,000 Liabilities $190,000 Equity Net Income $120,000 $50,000 8. Lang leased a portion of its store to Pang for 12 months beginning on November 1, at a monthly rate of $400. Pang paid the entire $4,800 on November 1, which lang recorded as unearned revenue. The journal entry made by Lang at year-end, December 31, would include A. A debit to Rent Eamed for $400 B. A credit to Unearned Rent for $400 C. A debit to Cash for $800 D. A credit to Rent Earned for $800 E. A debit to Unearned Rent for $4,800 Reported amounts AddSubtract) to correct for item (A) (B) (C) (D) (E) Corrected amounts 9. On April 4. Eigpela Company (FC) sold sweaters to one of its customers for $65,000 on credit terms of 3/15, net 30. On April 8, the customer contacted FC to say that the sweater coloux did not match their original order. FC reached an agreement with the customer to keep the shipment and FC granted the customer a price reduction of $3,000. The customer paid the outstanding bill on April 15. The journal entry to be made by FC on April 15 is A. Debit Sales Returns and Allowances $3,000, Credit Accounts Receivable $3,000 B. Debit Accounts Receivable $62,000; Credit Sales Revenue $62,000 C. Debit Cash $62,000; Credit Accounts Receivable $62,000 D. Debit Cash $60,140, Debit Sales Discounts $1,860, Credit Accounts Receivable $62,000 E. Debit Cash $62,000; Debit Sales Discounts $1,860, Credit Accounts Receivable $55,290 United States) D Focus 28 PA