PART 1

Assume that a lawyer bills her clients $16,000 on June 30, 2015 for services rendered during June. The lawyer collects $7,500 of the billings during July and the remainder in August. Under the accrual basis of accounting, when would the lawyer record the revenue for these fees?

Select one:

June, $0; July, $7,500; August, $8,500

June, $16,000; July, $0; August, $0

June, $8,500; July, $7,500; August, $0

June, $0; July, $8,500; August, $7,500

PART 2

On January 25, 2016, UVI Consulting collected $7,500 it had billed its clients for services rendered on December 15, 2015. How would you record the January 25, 2016 transaction using accrual basis accounting?

Select one:

increase cash account, $7,500; increase fees earned account, $7,500

increase cash account, $7,500; decrease accounts receivable account, $7,500

increase accounts receivable account, $7,500; increase fees earned account, $7,500

increase cash account, $7,500; decrease fees earned account, $7,500

Clear my choice

PART 3

If the supplies account indicated a balance of $3,250 before adjustment on May 31, 2015 and supplies on hand at May 31, 2015 totaled $1,950, the adjustment would be:

Select one:

increase supplies account, $1,950; decrease supplies expense account, $1,950

increase supplies expense account, $1,300; and decrease supplies account, $1,300

increase supplies expense account, $1,950; and decrease supplies account, $1,950

increase supplies account, $1,300; decrease supplies expense account, $1,300

Clear my choice

PART 4

The balance in the unearned rent account for James Co., as of December 31, 2015 is $2,200. If James Co., failed to record the adjusting entry of $1,100 for rent earned during December, the effort on the balance sheet and income statement for December would be:

Select one:

liabilities overstated by $1,100; net income overstated by $1,100

liabilities overstated by $1,100; net income understated by $1,100

liabilities understated by $1,100; net income understated by $1,100

assets understated by $1,100; net income overstated by $1,100