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1) Which of the following is not an example of an adjusting entry?
a.The entry to record unpaid expenses.b.The entry to record uncollected revenues.c.The entry to convert liabilities to revenue.d.The entry to pay outstanding bills.
2) The balance of an unearned revenue account:
a.Appears in the balance sheet as a component of owners' equity.b.Appears in the income statement along with other revenue accounts.c.Appears in a separate section of the income statement for revenue not yet earned.d.Appears in the liability section of the balance sheet.
Collected $24,000 of cash in advance for services to be provided over the next 12 months.
Prepare the entries for estimated bad debts assuming that doubtful accounts are estimated to be (1) 6% of gross accounts receivable and (2) 1% of net sales.
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