QUESTION 2 Expert Lawn Services offers customers a reduced price for lawn care if they pay for 6 months service in advance. In March 2020, 50 customers prepay $540 each for services to be provided from April through September. Expert recognizes revenue ratably over the 6-month period. How much total revenue will expert have recognized through the end of July 20207 QUESTION 3 Nichols Company uses the percentage of receivables method for recording bad debts expense. The month-end accounts receivable balance is $250,000 and credit sales during the month were $1,000,000. Management estimates that 4% of accounts receivable will be uncollectible. The Allowance for Doubtful Accounts has a credit balance of $2,500 before adjustment. The adjusting entry that Nichols must make includes: a debit to bad debt expense for $40,000 a debit to bad debt expense for $10,000 a credit to the allowance for $7,500. a credit to the allowance for $30,000. QUESTION 4 Accounts receivable are valued and reported on the balance sheet as investment assets at gross amounts less sales returns and allowances. only if they are not past due. at net realizable value, Le the amount of cash the company expects to collect QUESTION 5 A service-based company reports gross revenue of $125,000, sales discounts of $4,500; allowance for doubtful accounts of $6,000; operating expenses of $89,600, and a loss on sale of PP&E of $2,000. What is the company's net income before taxes? QUESTION 6 A current liability is a debt that can reasonably be expected to be paid between 6 months and 18 months from the balance sheet date. out of cash currently on hand. out of currently recognized revenues. Within one year of the balance sheet date. QUESTION 7 Writing off a customer's account receivable will result in: Lower net receivables. Lower gross receivables. Lower net revenue. Higher bad debt expense. QUESTION 8 An account that is classified as a contra-revenue. typically has a debit balance. is subtracted from gross sales revenue to determine net sales revenue, may include sales discounts and sales returns all of the above are true. QUESTION 9 Atlas Inc. recognized $65,200 of wage expense during the month of April. Atlas's wages payable liability had an opening balance of $21.800 on April 1 and an ending balance of $18,700 on April 30. How much cash did Atlas pay its employees during April? QUESTION 10 Adjusting entries are typically required at the end of an accounting period to ensure that all liabilities are reported properly on the balance sheet to ensure that the net income of the period includes all revenues and expenses. O to ensure that all assets are measured properly on the balance sheet. All of the answers above are correct
