QUIZ 1 l TOPIC 10 [ACCOUNTING FOR LIABILITIES]

All of the following are current liabilities except:

• Accounts Payable
• Notes Payable
• Dividends Payable
• Bonds Payable

Differences between Accounts Payable and Notes Payable is:

• Interest is charged on a note.
• Accounts payable are long-term debts.
• A note can be switched to an account payable.
• Accounts payable can be either interest-bearing or noninterest-bearing.

Unearned Revenue is classified as a current asset until the service or product has been rendered.

• True
• False

What is paid on the maturity date for an interest-bearing note payable?

• Principal
• Interest
• Principal + Interest
• Proceeds

What is paid on the maturity date for a  noninterest-bearing note payable?

• Principal
• Interest
• Principal + Interest
• Proceeds

The adjusting entry for an interest-bearing note payable at the end of the accounting period is for the accrued interest.

• True
  True
• False

A landlord receives RM12,000 in advance for a 6-month lease to a tenant for a warehouse she owns on August 31.

What is the entry for the landlord on August 31?

• Debit: Unearned Rental Revenue

  Credit: Cash

• Debit: Rental Revenue

  Credit: Cash

• Debit: Cash

  Credit: Rental Revenue

• Debit: Cash

  Credit: Unearned Rental Revenue

A landlord receives RM12,000 in advance for a 6-month lease to a tenant for a warehouse she owns on August 31. What is the adjusting entry for the landlord  at the end of the accounting period, December 31?

• Debit:  Unearned Rental Revenue Credit:  Rental Revenue RM8,000

• Debit:  Earned Rental Revenue Credit:  Cash RM10,000

• Debit:  Cash Credit:  Earned Rental Revenue RM8,000

• Debit: Rental Revenue Credit:  Unearned Rental Revenue RM10,000

A landlord receives RM12,000 in advance for a 6-month lease to a tenant for a warehouse she owns on August 31, 2019. Accounting period ended 31 Dec each year.

What is the entry for the landlord at the end of the lease, February 29, 2020?

• Debit: Unearned Rental Revenue RM4,000

  Credit: Rental Revenue RM4,000

• Debit: Rental Revenue RM4,000

  Credit: Cash RM4,000

• Debit: Cash RM12,000

  Credit: Rental Revenue RM12,000

• Debit: Rental Revenue RM4,000

  Credit: Unearned Rental Revenue RM4,000

The adjusting journal entry for an interest expenses on note are:

• Debit: Interest Expense

  Credit: Notes Payable

• Debit: Notes Payable

  Credit: Interest Income

• Debit: Interest Expense

  Credit: Interest Payable

• Debit: Receivable Interest

  Credit: Interest Income