ACCT 2301 (Fall 2021) Part II: Answer each of the following independent questions by circling the correct multiple choice answer. 1. Assume that Comet Graphics Company has completed their financial statements for 2019 and send the information to their sharcholders. Then, in January 2020, Comet Co. receives a bill from their utility provider for $500, which relates to utilities used in December 2019. This $500 was not considered when preparing the 2019 financial statements. Determine which of the following answer choices best reflects the effect of this error (overstated, understated, or no effect) on 2018 Net Income, Assets, Liabilities, and SHE Net Income Assets Lisblities Sharebolders Equity No Effect Overstated $500 Understated S500 No Effect Net Income Assets Libe Shareholders Equity Ovenstated $500 No Effect Overstated $500 No Efect Net Income Assets Lehtities Share Lealty Understated S500 No Effect No Efect Understated $500 No Effect Assets Sherebeldeuty Net Income Overstated $500 No Effect Understated SSOO Overstad S500 2. Otto Tune-Up Shop follows the revenue recognition principle. Otto services caro Aapat 31. The contener pick up the vehicle on September 1 and all the payment to Ollo on September s.Otto nelves the check the mall on September 6. On what date should Oto recognize revenge? Aug 31 September 1 September September 6 Focus ACCT 2301 (Fall 2021) 3. A company records a prepaid expense that will expire with the passage of time. At the end of the period, the correct adjusting entry will include debit to an asset account and a credit to an expense account. b. debit to an expense account and a credit to an asset account. C. debit to an asset account and a credit to an asset account. d. debit to an expense account and a credit to an expense account. 4. In the first month of operations, the total of the dehit entries to the inventory account amounted to $1,200 and the total of the credit entries to the Inventory account amounted to $800. The Inventory account has a .. $800 credit balance. b. $400 debit balance. c. $1,200 debit balance. dS100 credit balance. S. Below is a list of accounts as of 12/31/2020 for ABC Company. Given what you know about the normal balance of accounts (debit or credit), create a trial balance with a debit and credit column. What is the total dollar value of the sredit column? Accounts receivable Salary expense Cash Notepayable Equipment Retained samine 112020 Prepaid insurance Depreciation expense Accumulated depreciation Uncamned revenue Accounts payable Insurance CXDNS Revenue Salaries payable Common stock Rent 21.500 11.300 11.000 5.150 60.000 $3.500 2.500 7.000 35.000 5.600 5.000 1.350 61.500 1.300 4.000 - Focus ACCT 2301 (Fall 2021) Part II: Answer each of the following independent questions by circling the correct multiple choice answer. 1. Assume that Comet Graphics Company has completed their financial statements for 2019 and send the information to their sharcholders. Then, in January 2020, Comet Co. receives a bill from their utility provider for $500, which relates to utilities used in December 2019. This $500 was not considered when preparing the 2019 financial statements. Determine which of the following answer choices best reflects the effect of this error (overstated, understated, or no effect) on 2018 Net Income, Assets, Liabilities, and SHE Net Income Assets Lisblities Sharebolders Equity No Effect Overstated $500 Understated S500 No Effect Net Income Assets Libe Shareholders Equity Ovenstated $500 No Effect Overstated $500 No Efect Net Income Assets Lehtities Share Lealty Understated S500 No Effect No Efect Understated $500 No Effect Assets Sherebeldeuty Net Income Overstated $500 No Effect Understated SSOO Overstad S500 2. Otto Tune-Up Shop follows the revenue recognition principle. Otto services caro Aapat 31. The contener pick up the vehicle on September 1 and all the payment to Ollo on September s.Otto nelves the check the mall on September 6. On what date should Oto recognize revenge? Aug 31 September 1 September September 6 Focus ACCT 2301 (Fall 2021) 3. A company records a prepaid expense that will expire with the passage of time. At the end of the period, the correct adjusting entry will include debit to an asset account and a credit to an expense account. b. debit to an expense account and a credit to an asset account. C. debit to an asset account and a credit to an asset account. d. debit to an expense account and a credit to an expense account. 4. In the first month of operations, the total of the dehit entries to the inventory account amounted to $1,200 and the total of the credit entries to the Inventory account amounted to $800. The Inventory account has a .. $800 credit balance. b. $400 debit balance. c. $1,200 debit balance. dS100 credit balance. S. Below is a list of accounts as of 12/31/2020 for ABC Company. Given what you know about the normal balance of accounts (debit or credit), create a trial balance with a debit and credit column. What is the total dollar value of the sredit column? Accounts receivable Salary expense Cash Notepayable Equipment Retained samine 112020 Prepaid insurance Depreciation expense Accumulated depreciation Uncamned revenue Accounts payable Insurance CXDNS Revenue Salaries payable Common stock Rent 21.500 11.300 11.000 5.150 60.000 $3.500 2.500 7.000 35.000 5.600 5.000 1.350 61.500 1.300 4.000 - Focus
