Please help on financial Accounting question?

Which of the following properly describes a deferral?

a. cash is paid after expense is incurred.

b. cash is received before revenue is earned.

c. cash is received after revenue is earned.

d. cash is paid in teh same tiime period that an expense is incurred

If, during an accounting period, an expense item has been incurred and consumed but not yet paid for or recorded, then the end-of-period adjusting entry would involve

a. a receivable account and a revenue account

b. a liability account and an expense account

c. a liability account and an asset account

d. an asset or contra asset account and an expense account.

Maso Company recorded journal entries for the issuance of common stock for $80,000, the payment of $26,000 on accounts payable, and the payment of salaries expense of $42,000. What net effect do these entries have on owners' equity?

a. increase of 12000

b. increase of 38000

c. increase of 54000

d. increase of 80000

Starr Corporation loaned $150,000 to another corporation on December 1, 2012 and received a 3-month, 8% interest-bearing note with a face value of $150,000. What adjusting entry should Starr make on December 31, 2012?

a. debit Interest Receivable and credit Interest Revenue, $3,000

b. debit Cash and credit Interest Revenue, $1,000

c. debit Interest Receivable and credit Interest Revenue, $1,000

d. debit Cash and credit Interest Receivable, $3,000

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  • ?
    Lv 7
    8 years ago
    Favorite Answer

    Which of the following properly describes a deferral?

    b. cash is received before revenue is earned.

    (That's called deferred revenue.)

    ---------------------

    If, during an accounting period, an expense item has been incurred and consumed but not yet paid for or recorded, then the end-of-period adjusting entry would involve

    b. a liability account and an expense account

    ---------

    Maso Company recorded journal entries for the issuance of common stock for $80,000, the payment of $26,000 on accounts payable, and the payment of salaries expense of $42,000. What net effect do these entries have on owners' equity?

    b. increase of 38000

    Common Stock . . . . . . . .+ 80,000

    Salaries Expense . . . . . . . - 42,000

    - - - - - - - - - - - - - - - - - - - - - - - - - - -

    Net effect on Equity . . . . .+ 38,000

    The payment of an accounts payable does not effect Owner's Equity.

    ----------------

    Starr Corporation loaned $150,000 to another corporation on December 1, 2012 and received a 3-month, 8% interest-bearing note with a face value of $150,000. What adjusting entry should Starr make on December 31, 2012?

    c. debit Interest Receivable and credit Interest Revenue, $1,000

    The amount of accrued interest on the note after 1 month is :

    [ $ 150,000 x 0.08 x (1/12) ] = $ 1,000

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  • 4 years ago

    Cost accounting is the accounting associated with the cost of producing your product. Financial accounting is the most general, it mainly focuses on accounting outside the company such as for taxes and auditing. Managerial accounting is more internal and is used mostly for making decisions about which direction to take a business.

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