Previous Page Next Pace Page 1 of 7 (22 questions, 30 marks) Maid In Canada (MIC) is a new business you started this year. You perform custom cleaning and concierge services for customers in their homes, and house-sit while they are on vacation. You use your own car to get to customers' homes and your own cell phone for business purposes. Your first months' transactions are listed below. June 1 You set up a bank account and get a business credit card The bank will charge a fee of $15 at the ed of each month. June 2 You borrow $1,500 from the bank. June 3 You deposit $2,500 of your own money into the business bank account to start the business. June 4 You register your business name for $60 with Service Ontario, using the business credit card. June 6 You purchase, using the business credit card, cleaning supplies for $300 plus HST. June 7 You purchase, for $250 cash, mops, brooms and buckets. You expect that they will all last more than one year. June 8 You buy a two-year liability insurance policy for $3,000, plus 8% tax, paying cash MacBook Air OOO F4 F5 F6 17 8 June 10 You purchase for $200 cash, plus HST, flyers to advertise your business. None of the flyers have been delivered yet. June 11 You pay a student $50 cash to deliver half of the flyers to homes in your area. You "house-sat' on the Thanksgiving weekend. Because this is June 12 your first customer you provide your services for free instead of charging your usual fee of $100. Two more customers hire you for the upcoming Christmas holidays. June 15! They each pay you $50 now to reserve your services. Business is booming! You have provided services to 22 customers and June 27 collected $2,200 in cash from happy homeowners. June 28 You now have only $250 worth of cleaning supplies left. The remainder have been used in the business. You spent $156 from your personal funds in car expenses this month. June 29 One-third of this was business travel and the business pays you cash from the business bank account. June 30 You received your cell phone bill for the month. Of the $88, half were business calls. The company will reimburse you the amount owed next month. June 30 The business has used up 1 month of insurance coverage. The bank withdraws its monthly charge from the business bank account, June 30 plus an additional $5 for interest on your loan. You house-sit for your first customer again. The customer June 30 will pay you the $100 fee in July. June 30 You pay the entire balance owing on business credit card. Question 1 (1 point) How will MIC record the June 1 transaction? a) increase both Cash and Owner's Capital, $15 b) decrease Cash and increase Bank Charges, $15 c) no entry is needed d) decrease Cash and increase Bank Loan Payable, $15 e) decrease Cash and increase Accounts Payable, $15 Question 2 (1 point) How will MIC record the June 2 transaction? a) increase both Cash and Bank Loan Payable, $1,500 b) increase both Cash and Accounts Payable, $1,500 increase both Cash and Owner's Capital, $1,500 d) increase both Cash and Revenue, $1,500 Oe) increase both Cash and Retained Earnings, $1,500 Question 3 (1 point) How will MIC record the June 3 transaction? a) increase both Cash and Owner's Capital, $2,500 b) increase both Cash and Bank Loan Payable, $2,500 c) increase both Cash and Retained Earnings, $2,500 d) increase both Cash and Revenue, $2.500 Question 4 (1 point) How will MIC record the June 4 transaction? a) Increase Business Licence and decrease Cash, $60 b) No entry because a business name is intangible. O c) Increase Office Expenses and decrease Cash, $60 d) Increase both Business Licence and Accounts Payable, $60 e) Increase Accounts Payable and decrease Cash, $60 Question 5 (1 point) How will MIC record the June 6 transaction? a) Increase both Equipment and Accounts Payable, $339 Ob) Increase both Supplies and Accounts Payable, $339 c) Increase both Supplies Expense and Accounts Payable, $339 di increase both Supplies Expenses and Accounts Payable $300 Question 6 (1 point) How will MIC classify the mops, brooms and buckets purchased on June 7? a) prepaid expenses b) deferred revenue Oc) expense d) inventory e) equipment Question 7 (1 point) How will MIC record the June 8 transaction? a) Increase Prepaid Insurance and decrease Cash, $3,240 b) Increase both Insurance Expense and Accounts Payable, $3,240 c) Increase Prepaid Insurance and decrease Cash, $3,000 Question 8 (1 point) How will MIC record the June 10 transaction? a) Increase Advertising Expense and decrease Cash, $226 b) Increase both Prepaid Advertising and Accounts Payable, $226 Oc) Increase Prepaid Advertising and decrease Cash, $200 d) Increase both Advertising Expense and Accounts Payable, $226 e) Increase Prepaid Advertising and decrease Cash, $226 Question 10 (1 point) How will MIC record the June 12 transaction? a) increase both Cash and Service Revenue, $100 b) increase both Accounts Receivable and Deferred Revenue, $100 Oc) increase both Cash and Deferred Revenue, $100 d) increase both Accounts Receivable and Service Revenue, $100 e) no entry is needed Question 11 (1 point) How will MIC record the June 15 transaction? a) no entry is needed b) increase both Cash and Service Revenue, $100 Oc) increase both Accounts Receivable and Deferred Revenue, $100 d) increase both Accounts Receivable and Service Revenue, $100 Question 12 (1 point) How will MIC record the June 27 transaction? a) no entry is needed b) increase both Cash and Deferred Revenue, $2,200 c) increase both Accounts Receivable and Service Revenue, $2,200 d) increase both Accounts Receivable and Deferred Revenue, $2,200 Oe) increase both Cash and Service Revenue, $2,200 Question 13 (1 point) How will MIC record the June 28 transaction? O a) Increase Supplies and decrease Supplies Expense, $89 Ob) Increase Supplies Expense and decrease Supplies, $589 c) Increase Supplies Expense and decrease Supplies, $250 d) Increase Supplies Expense and decrease Supplies, $89 Question 14 (1 point) How will MIC record the June 29 transaction? a) decrease Cash $52, increase Accounts Payable $104, and increase Car Expense $156 b) increase both Accounts Payable and Car Expense, $104 c) decrease Cash and increase Car Expense, $104 d) decrease Cash and increase Car Expense, $52 e) increase both Accounts Payable and Car Expense, $52 Question 15 (1 point) How will MIC record the June 30 transaction? (the phone bill) a) increase both Accounts Payable and Phone Expense, $44 b) increase both Accounts Payable and Phone Expense, $88 c) decrease Cash and increase Phone Expense, $44 d) decrease Cash and increase Phone Expense, $88 Question 16 (1 point) How will MIC record the expiry of the insurance on June 30? a) decrease Prepaid Insurance and increase Insurance Expense $120 b) decrease Prepaid Insurance and increase Insurance Expense $1,620 Oc) decrease Prepaid Insurance and increase Insurance Expense $135 Od) no entry is required until year-end e) decrease Prepaid Insurance and increase Insurance Expense $1,500 Question 17 (3 points) How will MIC record the bank transaction on June 30? Choose ALL that apply. a) increase Cash $20 b) decrease Interest Expense $20 c) decrease Interest Expense $5 d) increase Bank Fee Expense $15 e) decrease Bank Loan Payable $5 f) increase Interest Expense $20 g) decrease Bank Fee Expense $15 h) decrease Cash $20 i) increase Interest Expense $5 i) increase Bank Loan Payable $5 Question 18 (1 point) How will MIC record the house-sitting job on June 30? a) increase both Accounts Receivable and Service Revenue, $100 Ob) increase both Cash and Service Revenue, $100 no entry is needed d) increase both Accounts Receivable and Deferred Revenue, $100 e) increase both Cash and Deferred Revenue, $100 Question 19 (1 point) How will MIC record the credit card payment on June 302 a) decrease both Cash and Accounts Payable, $355 b) decrease both Cash and Accounts Payable, $399 c) decrease both Cash and Accounts Payable, $339 d) decrease both Cash and Accounts Payable, $383 e) decrease both Cash and Accounts Payable, $443 Question 20 (2 points) What are MIC's total liabilities at the end of June? A/ Question 21 (2 points) What is MIC's total service revenue for June? A/ Question 22 (2 points) How much will MIC's Prepaid Insurance balance be at the December 31 year-end? A/ Previous Page Next Page Page 1 of 7