Question

AG Name: 14. What effect will this adjustment have on the counting to Unearned Revenge Fees camed a. b. c. d. Increase net income Increase revenues reported for the period Decrease liabilities All of these are true. m The net income reported on the income statement is 558,000. However, adjusting entries at the end of the period for supplies expense of $2,200 and scrued salaries of $1.300 N corrected, is a. $56,700 b. $58,000 c. $55,800 d. $54,500 16. Which of the accounts below would be closed by posting a debit to the account? a. Unearned Revenue b. Fees Eamed c. Josh Morton, Drawing d. Miscellaneous Expense The post-closing trial balance differs from the adjusted trial balance in that it a. does not take into account closing entries b. does not take into account adjusting entries c. does not include balance sheet accounts d does not include income statement accounts

Answer 1

Sol:

14). d. All the above is the answer.

Unearned revenue means revenue not earned and it is a current liability to an entity, so when we realized unearned revenue we shall debit the unearned revenue account and credit the revenue account.Since we realized the current liability(unearned revenue), the amount is reduced from liabilities side.As we crediting the revenue account the net income will be increased, hence the correct answer is option 'd'.

15).d. $54,500 is the answer.

given, i)net income (before adjustments) = $58,000

ii)less:Supplies expenses =$2,200

iii)less:accrued salaries =$1,300

So, correct net income will be(i-ii-iii) =$54,500

16).b. Fees Earned is the answer.

Unearned revenue is not an income or expense account, so we can not close that account by debiting that.Unearned revenue is kind of liability hence it can not be closed by debiting the same.Fee earned is a revenue account, it is closed by debiting that account by giving corresponding credit to the profit and loss account. Miscellaneous  expenses is an expense account, so it is closed by crediting the miscellaneous expenses a/c and by giving corresponding debit to the Profit and loss a/c.

17).d. does not include income statement accounts is the answer.

Post closing trial balance is prepared after the closing entries passed.The adjusted trial balance will include adjusting entries and income statement items.The post closing trial balance will contain only accounts with balances.The post closing trial balance will be prepared after the adjusted trial balance, hence the difference between those two is that the post closing trial balance 'does not include income statement accounts.So option 'd' is correct.