Question 6 /12
A company receives $10,000 in cash for services yet to be performed.
Using the accrual method, what’s the correct entry to record the transaction?
(A) Debit cash $10,000, credit accounts receivable $10,000
(B) Debit cash $10,000, credit sales revenue$1 0,000
(C) Debit sales revenue $10,000, credit cash $10,000
(D) Debit cash $10,000, credit unearned revenue $10,000
(E) Debit cash $10,000, credit accounts payable $10,000
Answers:
Option (D) Debit cash $10,000, credit unearned revenue $10,000
Explanations:
Option A is incorrect because we has to credit unearned revenue instead of accounts receivable.
Option B is incorrect because we has to credit unearned revenue instead of sales revenue.
Option C is incorrect because we has to credit unearned revenue instead of cash .
Option D is correct because we has to credit unearned revenue and debit cash.
Option E is incorrect because we has to credit unearned revenue instead of accounts payable.
Question 7 /12
Per company policy, tools with a purchase price greater than $1,000 are capitalized. What’s the correct entry to record a tool purchase of $500?
(A) Debit tools expense $500, credit cash $500
(B) Debit fixed asset $500, credit tools expense $500
(C) Debit fixed asset $500, credit cash $500
(D) Debit fixed asset $1,000, cred it cash $1,000
(E) Debit tools expense $1,000, cred it cash $1,000
Answers:
Option (A) Debit tools expense $500, credit cash $500
Explanations:
Option A is correct because we have to Debit tools expense and credit cash.
Option B is incorrect because we has to debit tools expense instead of fixed asset.
Option C is incorrect because we has to debit tools expense instead of fixed asset.
Option D is incorrect because we has to debit tools expense instead of fixed asset.
Option E is incorrect because we has to debit tools expense at $500 instead of $1,000.
Question 9 /12
A company performs $10,000 of services and issues an invoice to the customer. Using the accrual method. what’s the cored entry to record the transactions?
(A) Debit unearned revenue $10,000, credit salles revenue $10,000
(B) Debit accounts payable $10,000, credit sales revenue $10,000
(C) Debit services expense $10,000, credit sales revenue $10,000
(D) Debit cash $10,000, credit sales revenue $10,000
(E) Debit accounts receivable $10,000, credit salles revenue $10,000
Answers:
Option (E) Debit accounts receivable $10,000, credit salles revenue $10,000.