Question

of Accounting Errors terest Payable Interest Expense 200 On November 1 20 200 November 1, 20X4, DumpCo debits Cash and credits Notes Payable for $200 te maturing on May 1, 20X5, when principal and accrued interest of 6% ay on December 31, 20X4, you discover that no adiusting entry was made to a 20X4, you will record an entry that includes: a. a debit to Interest Payable for $400 b. a debit to Interest Expense for $200 c. a credit to Interest Payable for $400 none of the above edits Notes Payable for $20.000 for a nterest of 6% a year is due. If ng entry was made to accrue interest for 8. $6,000 job, of which $1,000 has been received by er before the books are closed that no Tour calendar year company completes a $6.000 ish of which $1,000 has be year end and credited to Revenue. If you discover before the books are adjusting entry was made your correcting entry will: a. debit Revenue for $5,000 b. debit Accounts Receivable for $6,000 credit Accounts Receivable for $5,000 credit Revenue for $5,000 c.

Answer 1

1. two month interest is accrued as on 31st December 2014

so adjusting entry should be made debit interest expense for two months of November & December

=20000*6% / 12months *2 months

=200$ debit to interest expense. answer b

2.though $5000 has not been received the revenue should be booked in the period it is earned.

out of 6000$ only 1000$ has been book to revenue

so we will credit revenue income by 5000$

answer d