Question-wise Details Section #1 Question 1: Time: 7 Min 17 Sec Marks: 212 ‘The following balances are taken from the Trial balance of the Year 4 financial statements of a ‘company: Use the information above to answer the following question. What is the amount of Retained Earnings on the Balance Sheet at the end of Year 4?Options Response Answer 27,725 4,425 26,725 4,725 v v Question 2: Time: 4 Min 14 Sec Marks: 2/2 In this period, a company recorded Sales Revenue of & 50,000 from sales of goods to customers Who agreed to pay later. In the next period, the company received payment from customers of & 45,000. Which of the following statements is correct? Options Response Answer Accounts Receivable at the end of this period is € 50,000. v v Accounts Payable at the end of this period is @ 5,000. Expenses for next period will increase by & 5,000. Revenue for this period is % 45,000. Question 3: Time: 2 Min 15 Sec Marks: 2/2 Suppose a Wedding hall received a & 5,000 deposit on February 1st for a wedding reception to be held on June 15th of the same year. Assuming the wedding reception is held on June 15th, which of the following statements is true for the accounts of the Wedding hall?Options Response Answer The banquet hall's June 30th balance sheet would show a Customer Deposit amount of & 5,000, and the profit and loss account would show Rental Revenue of € 5,000 for this situation. The & 5,000 deposit would be recorded as rental revenue on February 1st The banquet hall's June 30th balance sheet would show a Customer Deposit amount of & 5,000 for this situation No journal entry would be made on February ‘st for the ® 5,000 deposit since it is not yet earned on February 1 The banquet hall's June 30th profit and loss account would show v v Rental Revenue of & 5,000 for this situation. Question 4: Time: 52 Sec Marks: 2/2 OK Company pays its employees every Friday for work that the provide during the week, The salary is % 10,000 per 5-day week. OK's year-end occurred on Wednesday, at which time a correct adjusting entry was recorded. On the following Friday (two days later), which of the following journal entries should be recorded?Options Response Answer Salary Expense +4,000 v v Salary Payable -6,000 Cash -10,000 Salary Expense +10,000 Cash -10,000 Salary Payable -10,000 Cash -10,000 Salary Expense +6,000 Salary Payable -4,000 Cash -10,000 Question 5: Time: 1 Min 26 Sec Marks: 2/2 At the end of last year, the company's assets totaled %860,000 and its liabilities totaled & 740,000. During the current year, the company's total assets increased by ® 58,000 and its total liabilities increased by % 24,000. At the end of the current year, stockholders’ equity was: Options Response Answer % 178,000 % 34,000 184,000 v v % 120,000Question 6: Time: 54 Sec Marks: 2/2 Pizza Aroma delivered % 500 of pizzas to the local high school but hasn't received a payment yet. Pizza Aroma will report: Options Response Answer Cash of 500, because the school will pay for the pizzas eventually. Trade Receivable of % 500. Trade Payable of & 500. Nothing, because payment hasn't been received yet Question 7: Time: 2 Min 7 Sec Marks: 0/2 ‘Amar started Akbar and Antony Ltd. by investing € 10,000 cash and Office Equipment costing & 50,000. How will this be shown in the Company's Statement of Cash Flows? Response: Cash = = +1000 Equipments = +50000 Captial = +6000 Words : 10 Question 8: Time: 2 Min 39 Sec Marks: 2/2 During 2020, Chandra Company incurred operating expenses of % 200,000, of which % 150,000 was paid in cash. The balance will be paid in 2021. The operating expenses will have which of the following impacts on the Accounting Equation?Options Response Answer v v Decrease Shareholder's Equity by % 200,000; Decrease Assets by & 150,000; Increase Liabilities by @ 50,000 Decrease Assets by % 200,000; Decreases Shareholder's Equity by © 200,000 Decrease Shareholders equity by % 150,000; Decrease Assets by 150,000 Decrease Assets by % 200,000; Increase Liabilities by € 50,000; Decrease Shareholder's Equity by % 150,000 Question 9: Time: 1 Min 45 Sec Marks: 2/2 Why are advances received from customers shown as a Liability? Response: Since company have to provide service equivalent to the amount of advance received. Hence it is a liability to the company Answer: Best answer Correct answer Question 10: Time: 2 Min 4 Sec Marks: 2/2 Failure to make an adjusting entry to recognize accrued salaries payable would cause which of the following?Options Response Answer An understatement of expenses and liabilities and an overstatement of v shareholders equity An overstatement of assets and shareholder's equity An overstatement of assets and liabilities An understatement of expenses, liabilities, and shareholder's equity Question 11: Time: 8 Min 21 Sec Marks: 2/2 The following information is available for the month of June 2021 Sold goods to customers — % 25,00,000 Goods returned by customers ~ % 100,000 Trade Receivable balance as on 1st June 2021 — % 250,000 Collections from Customers — % 22,00,000 From the above, calculate the balance in Trade Receivable on 30th June 2021, Show your workings. Response: Sold goods to customers, Trade receivables = +2500000 Good retuned, trade receivalbles = -100000 1 june, trade receivale opening balance = 250000 2200000 collection from customers, trade receivables Closing trade receivable balance = 450000 Words : 35Question 12: Time: 2 Min 42 Sec Marks: 2/2 Mr. Kanakupillai asked his son what he was learning in his Accounting course at Lsquare Institute of Management. His son replied beaming, "If the Trial Balance balances, then all Accounting has been done properly!". Mr.Kanakupillai was upset at this. Do you think Mr.K had a valid reason to be upset? Explain. (not that dads need a valid reason to be upset at their kids but that's a discussion for another day) Response: Yes, beacause if any journal entry (ie both debit and credit entry of same amount) was missed druing trial balance preparation then also tial balance will balance. Therefore in above case trial balance balances but accounting is not done properly. Answer: Best answer Correct answer Question 13: Time: 4 Min 58 Sec Marks: 2/2 On September 15 2020, Trueman Company received 26,000 from a customer for services to be provided, which was recorded as unearned revenue. A week later the company provided services for 22,500 to the customer. What is the entry to adjust the balance in Unearned Revenue at the end of the company's first quarter on September 30, 2020? Response: Sept 15, 2020 Adance payment = +6000 Uneamed Revenue = +6000 After a week Uneamned revenue = -2500 Revenue = +2500 At the end of quarter Unearned revenue = +3500 Advance payment = +3600 Answer: Best answer Correct answer Question 14: Time: 2 Min 10 Sec Marks: 0.5/2Assume that P Corp issues 2,000 shares in exchange for legal services provided by an attomey. The legal services have a reliable value of @ 8,000 based on the amount the attorney would charge. Record the journal entry for the same. Response: ‘Advance for legal service = +8000 Other equity = +8000 Words : 10 Question 15: Time: 5 Min 45 Sec Marks: 2/2‘Some of the assets of one firm correspond to the liabilities of another firm (counter-party). For example, a trade receivable on the seller's balance sheet is a trade payable on the buyer's balance sheet. For each of the following items, indicate whether itis an asset or a liability and give the corresponding account title on the balance sheet of the other party to the transaction: (account Title ssetLiabilty [Title in Accounts of Other Party la. Advances from Customer IB. Interest Receivable |C. Prepaid insurance ID. Loan Payable Provide your answer in the following sample format: A. Account Title Asset/Liabilty Title in Accounts of Other Party B. Account Title Asset/Liabiliy:Title in Accounts of Other Party Response: ‘A. Advance from customer Liability Title in accounts of other party: Advance deposit (asset) B. Interest Receivable Asset Tiltle in accounts of other party: Interest Payable (lability) C. Prepaid Insurance Asset Title in accounts of other party: Unearned revenue (liability) D. Loan Payable Liability Title in accounts of other party: Trade receivable (asset) Words : 53 Question 16: Time: 5 Min 52 Sec Marks: 0/2 On November 1, 2001, XYZ Company purchased a one-year insurance policy for Rs. 12,000. XYZ increased Cash and decreased Prepaid Insurance for Rs.12,000. The journal entry to properly state all accounts involved on December 31, 2001, would be:Options Response Answer Insurance Expense +2,000 Cash -2,000 Insurance Expense +2,000 v Prepaid Insurance +22,000 Cash -24,000 Insurance Expense +2,000 Prepaid Insurance +10,000 Cash -12,000 Insurance Expense +2,000 v Prepaid Insurance -2,000 Question 17: Time: 3 Min 1 Sec Marks: 0/2 At the beginning of 2011, Pete Company had & 1,000 of supplies on hand. During 2011, the company purchased supplies amounting to % 6400. On December 31st, 2011, the count of supplies indicated that & 2,600 was stil unused. The adjusting entry Pete would record on December 31st 2011 would include Options Response Answer ‘Supplies Account -2,600 Supplies Expense Account +4,800 v Supplies Account +2,600 ‘Supplies Expense Account ~4,800 vQuestion 18: Time: 4 Min 8 Sec Marks: 2/2 On April 1st 2019, Planet Music has trade payable of & 12,000. During the month, cash payments of & 3,000 and credit purchases of & 11,000 were made, At the end of April 2019, what was the trade payable balance? Response: At start, Opening trade payable = +12000 Cash payment = +3000 (assuming this cash was paid for trade payable) => Trade payable = +9000 Credit Purchase of 11000 => Trade payable = +1100 Total trade payable balance = 9000 + 11000 = +20000 Answer: Best answer Correct answerQuestion 1: Time: 12 Min 30 Sec Marks: 1.5/4Mr Crowe started Lake View Corp, for buying and selling calculators on ist March 2021. The following are the transactions for the month of March. Mar 1 Introduced capital of 200,000 in cash Mar 1 Purchased 100 calculators for € 66,000 on credit Mar 1 Appointed a salesman on a salary of @ 2,000 per month, salary payable on the 5" of the succeeding month Mar 16 Sold 50 calculators for % 1,000 each Mar 16 Received advance of @ 40,000 from Dell Software for the calculators to be delivered in May 2024 Mar 31 Paid rent for March & 4,000 in cashBased on the above, calculate the following: ‘A. The company’s Cash balance on March 31st B. The Company's Profit for the month of March. Show your calculations to get full credit.Response: Mar 1, Invested capital Cash +200000 Capital +2000 Mar 1, Purchased calc on credit Equipment (calc) +66000 Trade payable = +66000 Mar 1, appointed salesman (Not a transaction) Mar 15, sold calculators for 1000 (Not a transaction since no monetary exchange) Mar16, Received advane Advance for Cale +4000 Unearned revenue +40000 Mar 31, paid rent in cash Cash -4000 rent expense +4000 (Equity = -4000) ‘A, Cash balance = +200000 - 4000 = 196000 B. Company profit = Revenue - Expense = -4000 Words : 83