Chapter 2 (2 questions) * Understanding Revenue and Expense - i.e. you recognize revenue when it is earned and expense when it is incurred. This is NOT dependent on when you give or receive cash. 1. Customer Bob pays Sky Company in $2,000 advance of a future order. Sky Company's entry to record this event is: Chapter 3 [ 3 questions) You prepare your accounting books in the following order: Journal Entries, Trial Balance, Income Statement, Balance Sheet When you close out your accounts, any additional earnings goes to your retained eamings account Make sure you know how to prepare wage type entries such as when you pay your employees and prepaid entries like insurance as seen below 1. On January 1 , a company purchases a $1,000 hurricane insurance policy covering the company for the period of January 1 through December 31 of the current year. As of June 30 of the current year, what is the total expense that should be recognized for this insurance policy (assume the company makes the appropriate adjusting entries monthly)? Chapter 4 (2 questions) "You expense inventory when you sell it to your customers - Understand sales, cogs, and inventory entries 1. Company A purchases goods for cash on January 15. They purchase 10 items at a cost of $50 per item. 5 of these items are sold on January 29 for $700 cash. What is/(are) the entry/(ies) on January 29 to record the sale of the goods? 2. On October 1,ABC purchases 100 units of inventory from XYZ for $100 per unit. The terms of the sale were 1/15n/60. On October 5,ABC returns 10 units (there were no defects with the units). On October 9,ABC pays for the units. On October 22,ABC sells 10 units of the inventory purchased on October 1 for $200 per unit on credit. What is the impact to ABC 's cash flow for the month of October as a result of these events