FUNDA-difficult

A company’s trial balance totals were:

Debit …………………….₱387,642

Credit ……………………₱379,511

A suspense account was opened for the difference. Which of the following errors would have the effect of reducing the difference when corrected?

• The petty cash balance of ₱500 has been omitted from the trial balance

• ₱4,000 received for rent of part of the office has been correctly recorded in the cash book and debited to Rent expense account

• No entry has been made in the records for a cash sale of ₱2,500

• ₱3,000 paid for repairs to plant has been debited to the plant asset account.

A company paid its property taxes on October 1 for the period October 1, year 1 to September 30, year 2. When the payment was made the company debited property taxes expense and credited cash for ₱8,000. The adjusting entry at December 31, year 1 would include which of the following:

• debit prepaid property taxes, ₱6,000.

• credit prepaid property taxes, ₱6,000.

• credit property tax expense, ₱2,000.

• debit property tax expense, ₱6,000.

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

• a liability account and an asset account.

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

• a liability account and an expense account.

• a receivable account and a revenue account.

At the end of the current year, the prepaid insurance account showed a debit the balance of ₱5,000; the balance at the beginning of the year was ₱6,000, and during the year the insurance premiums paid amounted to ₱8,000. Assuming insurance premium payments are initially entered in the prepaid insurance account, the adjusting entry at the end of the year would include:

• debit prepaid insurance ₱9,000

• credit prepaid insurance ₱1,000

• debit insurance expense ₱7,000

• debit insurance expense ₱9,000

On March 1, a company received ₱3,000 cash from a client as an advance for 12 months’ worth of delivery services. The company initially recorded this receipt as a debit to cash and a credit to delivery service revenue. The adjusting entry on December 31 would include a

• debit to delivery service revenue, ₱2,500.

• credit to unearned delivery service revenue, ₱500.

• credit to delivery service revenue, ₱500.

• No adjusting entry was required because the delivery service was for a one-year period exactly.

A corporation received cash of ₱24,000 on August 1 for one-year's rent in advance and recorded the transaction on that day as a credit to unearned rent revenue for the full amount. The December 31 adjusting entry is:

• Rent revenue ₱10,000

  Unearned rent revenue ₱10,000

• b. Unearned rent revenue ₱24,000

  Rent revenue ₱24,000

• c. Rent revenue ₱14,000

  Unearned rent revenue ₱14,000

• d. Unearned rent revenue ₱10,000

  Rent revenue ₱10,000

A sole proprietor took some goods costing ₱800 from inventory for his own use. The normal selling price of the goods is ₱1,600. Which of the following journal entries would correctly record this?

• Drawings account 800

  Inventory account 800

• Drawings account 800

  Purchases returns account 800

• Sales account 1,600

  Drawings account 1,600

• None of these

In which of the following may an entity not incur any obligation?

• Using a credit card to purchase merchandise

• Using a debit card to purchase merchandise

• Replacing an account payable with note payable

• Breaching a loan agreement

Which of the following is an accrued liability?

• Cash dividend payable

• Wages payable

• Rent revenue collected one-month advance

• Portion of long-term debt payable in current year

Which of the following items should be included in a company’s inventory at the balance sheet date?

• Goods in transit which were purchased FOB destination.

• Goods received from another company for sale on consignment.

• Goods sold to a customer which are being held for the customer to call for at the customer’s convenience.

• Goods in transit which were purchased FOB shipping point.