I'm not looking for just answers (ie. A, B, C). I want to understand the material. Those answers with the most clear explanations I will rate EXCELLENT !!!!!!!!!!!!!!! Thank you!

Accounting Questions:

(1). Which of the following is included in the sale of inventory on account?

	A.	Debit to Cost of Goods Sold
	B.	Credit to Sales Revenue
	C.	Debit to Inventory
	D.	Two of the above are included
	E.	All of the above are included

(2). Bradford & Co. receives $3,000 cash for services to be performed next month. The collection of cash would be recorded with a:

	A.	Debit to Cash; Credit to Accounts Payable
	B.	Debit to Service Revenue; Credit to Unearned Revenue
	C.	No entry since no services have been performed
	D.	Debit to Cash; Credit to Unearned Revenue
	E.	Debit to Cash; Credit to Service Revenue

(3). Tim creates the following accounts receivable aging report at the end of the year. Prior to adjusting entries, the Allowance for Uncollectible Accounts has a credit balance of $500. The year-end adjustment would include a:

Age	Amount	Estimated uncollectible
Less than 30 days	$6,000	5%
31-60 days	$4,000	10%
61+ days	$2,000	25%

	A.	Debit to Bad Debt Expense for $1,700
	B.	Debit to Bad Debt Expense for $1,200
	C.	Credit to Allowance for Uncollectible Accounts for $1,400
	D.	Credit to Accounts Receivable for $500
	E.	Debit to Bad Debt Expense for $700

(4). Based on the information below, what amount of impairment loss would be reported?

Asset	Fair value	Estimated cash flows	Book value
Building	$135,000	$138,000	$140,000
Equipment	$25,000	$36,000	$30,000
Truck	$34,000	$45,000	$42,000

	A.	$18,000
	B.	$37,000
	C.	$13,000
	D.	$5,000
	E.	$23,000

(5). Which of the following causes an increase in stockholders" equity?

	A.	Receive cash from customers for services previously provided
	B.	Pay dividends to stockholders
	C.	Receive cash from bank borrowing
	D.	Sell a long-term asset for more than its book value
	E.	Receive cash in advance from customers

(6). Using the allowance method, what impact does writing off an actual bad debt have on the accounting equation?

	A.	Decrease assets
	B.	Decrease stockholders" equity
	C.	Decrease revenues
	D.	Two of the above are correct
	E.	No effect

(7). Suppose a company spends $100,000 on research and development in 2012. As a result of the products developed, additional revenue is earned over the next five years totalling $600,000. When is the cost of the research and development in 2012 recognized as an expense?

	A.	Evenly over the period 2012-2017
	B.	Full amount in 2013
	C.	Evenly over the period 2013-2017
	D.	Full amount in 2017
	E.	Full amount in 2012

(8). What is the effect on the accounting equation when inventory is purchased on account?

	A.	No change
	B.	Increase equities
	C.	Decrease in assets
	D.	Decrease in liabilities
	E.	Increase in liabilities

(9). Which of the following would be recorded as an adjusting entry at the end of the year?

	A.	Impairment of long-term assets
	B.	Lower-of-cost-or-market inventory valuation
	C.	Contingent liabilities
	D.	Allowance for uncollectible accounts
	E.	All of the above are included in adjusting entries at the end of the year

(10). Which of the following transactions would cause an increase in both the assets and liabilities of a company?

	A.	Purchase of a factory by issuing a note payable
	B.	Prepaying for next year"s rent
	C.	Services received on account
	D.	Collection of accounts receivable that was written off last year
	E.	Pay for inventory purchased 90 days ago

(11). Rent Expense of $42,000 is paid with cash during one month, and Inventory of $85,000 was purchased on account during the same month. Did stockholders" equity increase or decrease and by how much?

	A.	$127,000 increase
	B.	$43,000 increase
	C.	$85,000 increase
	D.	$42,000 decrease
	E.	No change

(12). Leinart Co. had the following inventory transactions for the period. Calculate the cost of goods sold using the average costs method (Do not round until final answer).

Date		Quantity	Purchase Cost	Selling Price
July 1	Beginning Inventory	350	$1
July 10	Sale	150		$5
July 14	Purchase	400	2
July 17	Sale	300		6
July 28	Purchase	200	4

	A.	$1,123.69
	B.	$845.13
	C.	$1,026.32
	D.	$923.68
	E.	$1,050.00

(13). Tim creates the following accounts receivable aging report at the end of the year. Prior to adjusting entries, the Allowance for Uncollectible Accounts has a debit balance of $500. The year-end adjustment would include a:

Age	Amount	Estimated uncollectible
Less than 30 days	$6,000	5%
31-60 days	$4,000	10%
61+ days	$2,000	25%

	A.	Debit to Bad Debt Expense for $1,200
	B.	Credit to Accounts Receivable for $500
	C.	Credit to Allowance for Uncollectible Accounts for $1,400
	D.	Debit to Bad Debt Expense for $1,700
	E.	Debit to Bad Debt Expense for $700

(14). Suppose a company uses the direct write-off method instead of the allowance method in accounting for uncollectible accounts. What is the impact on the accounting equation of an actual bad debt?

	A.	No effect
	B.	Decrease liabilities
	C.	Increase liabilities
	D.	Decrease assets
	E.	Decrease revenues

(15). The collection of sales tax by a company when selling goods to customers would be recorded as a (an):

	A.	Liability
	B.	Expense
	C.	Dividend
	D.	Contra asset
	E.	Sales taxes collected are not recognized by the company

(16). On June 8, Dayne Corp. purchased inventory on account for $15,000 with terms of 3/15. On June 10, Dayne Corp. returned $1,000 worth of inventory, and then paid the remaining balance on June 20. How would Dayne record the payment on June 20?

	A.	Debit Accounts Payable $15,000; Credit Inventory $450; Credit Cash $14,550
	B.	Debit Accounts Payable $13,580; Debit Inventory $420; Credit Cash $14,000
	C.	Debit Accounts Payable $14,550; Debit Inventory $450; Credit Cash $15,000
	D.	Debit Accounts Payable $14,000; Credit Inventory $420; Credit Cash $13,580
	E.	Debit Accounts Payable $14,000; Credit Cash $14,000

(17). In 2012, Tony estimates that warranty costs in the following year will be $25,000. Actual warranty costs in 2013 are only $20,000. What is the effect on the accounting equation when recording actual warranty costs in 2013?

	A.	Assets increase
	B.	Liabilities decrease
	C.	Stockholders" equity increases
	D.	Stockholders" equity decreases
	E.	Liabilities increase