6. What is meant by unearned revenue? Give an example. 7. What is meant by perpetual inventory recording system? 8. If in a trial balance the debit is equal to credit, what does it indicate? 2. If the total expense of a company is $95,000 and sales revenue is $80,000 What is the net income or loss of the company? 1. Name at least two types of accounts that require adjusting entries. 1-Prepaid expenses 2- Depreciation expenses. 2. Given the credit term 5/5; net/65 2 Is this company eligible for discount ? If so, calculate the discount in $. Jan 16 Purchases: $120,000 Jan 31 Net payment done for Jan 16 purchases 3. How is understated accounts corrected in an accounting year? Reflect the cumulative effect of the error on periods prior to those presented in the carrying amounts of assets and liabilities as of the beginning of the first period presented; and Make an offsetting adjustment to the opening balance of retained earnings for that period; and Adjust the financial statements for each prior period presented, to reflect the error correction 4. How many times in a year are closing entries made? 4. Given below is the adjusted trial balance of a Company dated 31" December 2018. Debit Credit 55000 40000 . Name of the Account Owner's Capital ..... Truck. Unearned Service Revenue Commission payable Interest expense Salaries payable Prepaid tax Land... 15000 8000 2500 8000 6000 HERE 120000 Dar Al Uloom University - Riyadh-KSA 2020 8 of 13 6 marks 3. Prepare the journal entries to record the following transactions using a perpetual inventory system. Nov 6 - Sold merchandise on account for $125,000, terms 3/30, net/50. The cost of the merchandise sold was $60,000 Nov 10 - Received sales returns of $24,000 of merchandise sold on Nov 6. The cost of the merchandise returned was $,6000 Nov 20 - Received the net amount due for Nov 6 sales Dr. Cr. Account title and explanation Date of the transaction