Int Acc Midterm 2 Exam

Question 1

1. signed = july 1
2. paid = july 15
3. delivers = july 30

how do you JE 1?

Answer 1

1 = no entry

Question 2

1. signed = july 1
2. paid = july 15
3. delivers = july 30

how do you JE 2?

Answer 2

2 = cash (dr) + unearned (cr)

Question 3

1. signed = july 1
2. paid = july 15
3. delivers = july 30

how do you JE 3?

Answer 3

3 = unearned (dr) + revenue (cr) & cogs (dr) + inventory (cr)

Question 4

bad debt for outstanding AR

Answer 4

(outstanding AR*uncollectible %) - allowance for doubtful

Question 5

w/out recourse (company)

Answer 5

1. dr: cash (balance)
2. dr: receivable factor (retained %*factored)
3. dr: loss on sale receivable (finance charge*factored)
4. cr: AR (factored)

Question 6

w/out recourse (bank)

Answer 6

1. dr: AR (factored)
2. cr: due to customer (retained %*factored)
3. cr: interest charge (finance charge*factored)
4. cr: cash (balance)

Question 7

w/ recourse (company)

Answer 7

1. dr: cash (balance)
2. dr: receivable factor (retained %*factored)
3. dr: loss on sale receivable (finance charge*factored)
4. cr: AR (factored)
5. cr: recourse liability (recourse provision)

Question 8

loss recorded w/ recourse (bank)

Answer 8

(carrying amount*finance charge) + recourse obligation

Question 9

JE for company w/out recourse

Answer 9

1. dr: cash
2. dr: interest expense
3. cr: notes payable

(loan*finance charge) = interest expense
(AR - interest expense) = cash

Question 10

gross method for cash received

Answer 10

1. dr: cash (balance)
2. dr: sales discount (term*AR)
3. cr: AR (sales)

Question 11

terms 1/15, net 30

Answer 11

pay w/in 15 days for a 1% discount or pay outstanding w/in 30 days

Question 12

selling equipment JE (date of sale)

Answer 12

1. dr: cash
2. cr: sales revenue

Question 13

extended warranty JE

Answer 13

1. dr: cash (sale + extended)
2. cr: sales revenue (sale)
3. cr: unearned warranty (extended)

Question 14

% of completion method (Y1)

Answer 14

revenue = (costs Y1/costs Y1 + est. costs Y1)*contracted amount

Question 15

process billing Y2 (% of completion)

Answer 15

1. dr: AR (amount)
2. cr: billings (amount)

Question 16

revenue + gross profit Y1 (% of completion)

Answer 16

1. dr: construction expense = (Y1 costs)
2. dr: construction in process = (balance)
3. cr: revenue from LT = (revenue Y1)

Question 17

gross profit Y2 (% of completion)

Answer 17

Y2 revenue =

1. total revenue
2. Y1 revenue (minus)
3. Y2 costs (minus)

Question 18

transaction price

Answer 18

contract + (bonusdeal date) + ((bonus-discount)deal date) + … + etc.

Question 19

JE for return of merchandise

Answer 19

(cost/sale price)*return amount = dr (returned inventory)

Question 20

revenue + AR if last dues unpaid?

Answer 20

1. revenue = (contract price*est. completion)
2. AR = quarterly payment dues

Question 21

construction in process

Answer 21

1. (building - est. cost)*(cost to date/est. cost) = amount
2. cost to date + amount = CIP

Question 22

perpetual inventory system

Answer 22

1. dr: purchases
2. cr: cogs
3. cost transferred to cogs

Question 23

inventory at B/S date?

Answer 23

goods sold to customer + shipped FOB destination