Question 26

Corresponds to CLO 6(b) Mann Corporation's employees worked overtime to complete an order that is sold on July 27. The office sends a statement to the customer on August 15, and payment is received on September 5. Mann follows generally accepted accounting principles (GAAP). In what month should the overtime wages be expensed?

		either July or August, depending on when the pay period ends
		September
		August
		July

3 points

Question 27

Corresponds to CLO 6(c) Sight Company had the following transactions during 2013: sales of $5,000 on account; collected $1,600 for services to be performed in 2014; paid $4,100 cash for 2013 salaries; purchased airline tickets for $800 in December for a trip to take place in 2014. What is Sight's 2013 net income using accrual accounting?

		$1,700
		$900
		$2,500
		$5,800

3 points

Question 28

Corresponds to CLO 6(d) Lyme Corporation had the following transactions during 2013: sales of $8,000 on account; collected $4,500 for services to be performed in 2014; paid $3,000 cash for 2013 salaries; paid $400 for airline tickets for a trip to take place in 2014. What is Lyme's 2013 net income using cash basis accounting?

		$4,600
		$9,100
		$1,100
		$1,500

3 points

Question 29

Corresponds to CLO 7(a) Ping Sports Company purchases $1,000 of merchandise on credit. Using the perpetual inventory approach, the journal entry to record this transaction would be:

		debit: Inventory $1,000; credit: Accounts Payable $1,000
		debit: Accounts Payable $1,000; credit: Inventory $1,000
		debit: Accounts Payable $1,000; credit: Purchases $1,000
		debit: Purchases $1,000; credit: Accounts Payable $1,000

3 points

Question 30

Corresponds to CLO 7(b) Gardner Corporation had sales of $2,400 on account on January 9, 2013. Gardner uses the periodic inventory method. The journal entry to record this transaction would include:

		a debit to Sales Revenue and a credit to Accounts Receivable.
		a debit to Accounts Receivable, a credit to Sales Revenue, a debit to Cost of Goods Sold, and a credit to Inventory.
		a debit to Accounts Receivable and a credit to Sales Revenue.
		a debit to Accounts Receivable, a credit to Sales Revenue, a debit to Cost of Goods Sold, and a credit to Purchases.