Question

I need answers for my reviewer.

1. The time period assumption assumes that an organization's activities may be divided into specific reporting time periods including all of the following A Month B Quarters C. Calendar years. D. Days 2. The 12-month period that ends when a company's sales activities are at their lowest level is called the A Fiscal year. B Calendar year. C. Natural business year. D. Accounting period 3. Courtney Company purchased equipment on November 1, 2018 and gave a month. 9 note with a face value of P 30.000 The December 31, 2018 adusting entry is A debit terest Expense and credit Interest Pay P2700 deba t Expense and credit leerest Payable P 450 B debit Interest Expense and credit Interest Payable, P 675 D. debet terest Expense and credit Cash P 450 4. Adjusting entries: A Aflect only income statement accounts C. Affect both income statement and balance sheet accounts. B. Aflect only balance sheet accounts D. Aflect cash accounts 5. The system of preparing financial statements based on recognizing revenues when the cash is received and reporting expenses when the cash is paid is called A Accrual basis accounting C Revenue recognition accounting B. Operating cycle accounting D Cash basis accounting 6. The primary difference between deferred and accrued expenses is that deferred expenses have A Been incurred and accrued expenses have not B. Not been incurred and accrued expenses have been incurred C. Been recorded and accrued expenses have not been incurred D. Not been recorded and accrued expenses have been incurred 7. A company made no adjusting entry for accrued and unpaid employee wages of P 28.000 on December 31. This oversight would: A. Understate net income by P 28,000. C. Have no effect on net income B. Overstate net income by P 28,000. D. Overstate assets by P 28,000 8. Fatty Inc. reported an allowance for doubtful accounts of P 52,350 at December 31, 2018, before performing an aging of accounts receivable. As a result of the aging. Fatty Inc. determined that an estimated P 82.500 of the December 31, 2018 accounts receivable would prove uncollectible. Assuming the given beginning and ending balances are at its normal balances the adjusting entry required at December 31, 2018, would be A Doubtful Accounts Expense 82.500 Allowance for Doubtful Accounts 82,500 B. Allowance for Doubtful Accounts 82,500 Accounts Receivable 82,500 C Doubtful Accounts Expense 30,150 Allowance for Doubtful Accounts 30,150 D. Allowance for Doubtful Accounts 30,150 Doubtful Accounts Expense 30,150 9. On July 1 Plum Co, paid P 7,500 cash for management services to be performed over a two-year period. Plum follows a policy of recording all prepaid expenses to asset accounts at the time of cash payment. On July 1 Plum should record: A debit expense and credit prepaid expense for P 7.500. C. debit prepaid expense and credit Cash for P 7.500 B. debit expense and credit Cash for P 7.500. D. debit Cash and credit expense for P 7.500 10. An account linked with another account that has an opposite normal balance and is subtracted from the balance of the related account is an) A. Accrued expense. B. Adjunct account C. Accrued revenue. D. Contra account. 11. The periodic expense created by allocating the cost of plant and equipment to the periods in which they are used, representing the expense of using the assets, is called: A. Depreciation expense. C. A contra account B. Accumulated depreciation. D. The expense recognition (matching) principle. 2. Which of the following assets is not depreciated? A. Store fixtures. B. Computers. C. Land. D. Buildings 3. A company pays each of its two office employees each Friday at the rate of P 100 per day for a five-day week that begins on Monday. If the monthly accounting period ends on Tuesday and the employees worked on both Monday and Tuesday, the month-end adjusting entry to record the salaries earned but unpaid is A Debit Unpaid Salaries P 600 and credit Salaries Payable P 600. B. Debit Salaries Expense P 400 and credit Salaries Payable P 400. C. Debit Salaries Payable P 400 and credit Salaries Expense P 400. D. Debit Salaries Expense P 400 and credit Cash P 400.

Answer 1

Dear Student,

As per the HOMEWORKLIB POLICY, only the first four questions should be answered. Kindly take note of it.

Part 1

Option D

Days

According to time period assumption, which also referred to as periodicity assumption and accounting time period concept, it is necessary to divide the life of a business into equal time periods. It can be divided into months, quarters, semi-annual, fiscal years and calendar years.

Part 2

Option C

Natural business year

The 12-month period that ends when a company's sales activities are at their lowest level is called the natural business year. it is period of 12 consecutive months and the organization activities ends at a low point.

Part 3

Option C

Debit interest expense and interest payable P675

Interest expense = 30000*9%*3/12 = 675

Part 4

Option C

Affects both income statement and balance sheet accounts

The main objective of adjusting entries is to convert an accounting records to the accrual basis of accounting. They are made for adjusting revenues and expenses to the accounting period in which they occurred and before the issuing financial statements. The accounts of income statement and balance sheet are affecting while making adjusting entries.