Reference no: EM132466908

Question 1: The revenue principle deals with the following:

A) when to record revenue and when to record related expenses.

B) when to record revenue and where to record this revenue.

C) when to record revenue and the amount of revenue to record.

D) where to record revenue and the amount of revenue to record.

Question 2: On January 1, 2019, a customer places an order for a new customized vehicle. The contract price is $42,000. The vehicle is delivered to the dealer and customer on April 1, 2019. What amount of revenue does the dealer record on January 1, 2019 and April 1, 2019?

A) $42,000; $0

B) $21,000; $21,000

C) $0; $42,000

D) $14,000; $14,000

Question 3: A company has $800 in Prepaid Advertising before any adjustments. At the end of the year, an adjusting entry is made to debit Advertising Expense for $60. The ending balance in the Prepaid Advertising account will be:

A) $740.

B) $0.

C) $60.

D) $800

Question 4: On December 1, 2019, Carrie's Day Care receives $4200 in advance for an agreement to care for Susan's children for the months of December, January, and February. Carrie's Day Care will make an adjusting entry on December 31, 2019 to:

A) credit Revenue for $4200.

B) credit Revenue for $2800.

C) debit Unearned Revenue for $1400.

D) credit Prepaid Revenue for $2800.

Question 5: A company has the following information available for the year ending December 31, 2019:

Service Revenue                      $91,300.

Operating Expenses                 $52,900.

Gain on Sale of Land               $32,000.

Loss on Sale of Equipment        ($2,000).

Retained Earnings, 12/31/2019  $100,000.

Dividends declared in 2019        $22,000.

Calculate the company's (A) net income or loss for the year ending December 31, 2019 and (B) the balance in Retained earnings on January 1, 2019, the beginning of the fiscal year.

Question 6: A company declared and paid dividends of $1300. How does this transaction affect the accounting equation?

A) Add $1300 to Revenue and add $1300 to Cash.

B) Add $1300 to Dividend Expense and subtract $1300 from Cash.

C) Subtract $1300 from Retained Earnings and subtract $1300 from Cash.

D) Add $1300 to Dividends and add $1300 to Accounts Receivable.