Question

J e received P 1.200,000 from its students for the spring semester that recorded in Uncanned buition and Fees The term spans four months beginning on January 2 and the college spread the revenue evenly over the months of the term Asuming the college prepares adjustments monthly, what amount of tuition revenue should the college recognize on February 28? AP 300,000 BP 600,000 C.P 800,000 D.P 900,000 E.P 1.200.000 15. Unpaid water bill was not recorded. Which of the following is not correct? A Assets will not be affected C. Expenses will be understated B. Liabilities will be understated D. Owner's equity will be understated 16. An entry requiring a debit to an expense account and a credit to an asset account is an example of an adjusting entry classified as accrued expense prepaid expense C depreciation D collectible accounts 17. After a successful drive aimed at members of a specific national association, Lifetime Publishing Company received a total of P 180.000 for 3-year subscriptions beginning April 1, 2018, and recorded this amount in the neared revenue account Assuming Lifetime records adjustments only at the end of the calendar year, the adjusting entry required to reflect the proper halaces in the accounts at December 31, 2018 is to A. Debit subscription revenue for p 135,000 and credit unearted revenue for P 135.000 B. Debit earned revenue for P45,000 and credit subscription revenue for P45,000 C. Debit earned revenue for P135,000 and credit subscription revenue for P135,000 D. Debit subscription revenue for P45,000 and credit uneared revenue for P45,000. 18. An entry requiring a debit to an expense account and a credit to liability account is an cumple of an adjusting entry classified as A accrued expense B prepaid expense C depreciation D uncollectible accounts 19. Which of the following steps in the accounting cycle is completed later than the others! A Journalization. B. Adjustments Posting D. Identification and measurement of transactions 20. The publisher of popular magazine offers a special discounted price for 3-vear subscription. At the balance sheet date, the amount that has already been collected but pertains to future periode is best referred to as A Accrued subscriptions revenue an asset account. C.Deferred subscriptions revenue (aliability account) 1. Eamed subscriptions revenue (a revenue account) D Precollected subscriptions receivable (a deferred asset account). 21. On October 1. 2018, a company sold services to a customer and accepted a more in change with a P 120.000 face value and an interest rate of 10%. The more requires that both the principal and interest be paid maturity dne, December 31, 2019. The company's accounting period is the calendar year. What is related to this mate) will be required at December 31 2018 on the company's books? Dehit Credit A Deferred interest income P3.000 Interest receivable P 3.000 B interest income P3.000 Interest receivable P3.000 C Interest receivable P3,000 Deferred interest income P3,000 D. Interest receivable P3,000 Interest income P 3,000 22. What is the purpose of the adjusting entry: Dr. Supplies xxx and Cr. Supplies Expense xxx A. To recognize supplies used if purchases of supplies are recorded in supplies. B. To recognize supplies on hand, if purchases of supplies are recorded in supplies expense. To record the purchase of supplies during or at the end of the period. D. To close the expense account for supplies at the end of the period. 23. The account credited for a receipt of cash on account is A Accounts Payable. B. Cash C Service Revende. D. Accounts Receivable. 24. The purpose of adjusting entries is to A. Prepare revenue and expense accounts for recording the transactions of the next accounting period. B Asely the relation reciple and the matching principle to transactions affecting two or more accounting periods C Adjust daily the balances in asset, liabilities, revenue, and expense account for the effects of business transactions D. Adjust the owner's capital account for the revenue, expense, and withdrawal transactions which occurred during the year 25. Adjusting entries A Help to properly measure the period's met income or set loss C. Assign revenues to the period in which they are camed. B. Bring asset and liability accounts to correct balances D. All of these Part 2: Problem Solving Instruction: Use the provided answer sheet to write your finalwwer. 1 The Supplies te Hand account balance at the beginning of the period was P 30,000. Supplies totaling P 120,000 was purchased during the period and debited to Supplies on Hand. A physical count shows 70,000 of unused supplies at the end of the period The appropriate adjusting journal entry at the end of the period is 2 A business received cash of P300,000 in advance for service that will be provided later. The cash receipt was recorded by a debetto Cash and credit to Uneamed Revenue for P300,000. At the end of the period, P 190.000 is still uneared. The appropriate adjusting entry is

Answer 1

Answer to 14

Correct answer is A. - 300000

Revenue is recognized evenly over the months of the term. Term is 4 months. Monthly revenue to be recognized is

= 1200000/4

= 300000

Answer to 15

Correct answer is D. - Owner's equity will be understated

Entry for unpaid water bill is as below:

Water expenses DR.

Expenses payable CR.

On non recording of this entry, assets will not be affected (True), water expenses will be understated (True), Liabilities/ Expenses payable will be understated (True).

However, no there will be no affect in owner's equity; therefore statement 'D' is false.

Answer to 16

Correct answer is B. - Prepaid expense

Entry for prepaid exp adjusting entry is as below

Expense A/c DR.

Prepaid expense A/c CR.

Answer to 17

Correct answer is B. - Debit unearned revenue account for 45000 and credit Subscription revenue account for 45000

Total subscription income (April 1, 2018 to 31 March 21 - 3 years) = 180000

Adjustment recorded at the end of calendar year

Adjustment to be recorded as at Dec 31, 2018 - for the period (April 1 2018 to Dec 31, 2018 - i.e. for 9 months)

= 180000 X 9 / 36

= 45000

Answer to 18

Correct answer is D. - Un collectible accounts

Entry is:

Bad debts DR

Provision for doubtful debts