©THEBRIGHT EXAM SOLUTIONS
11/06/2024 10:41 AM
ACC211: CH.3 MCQ Exam Questions And
Answers 100% Pass
A company reported net income of $4,805 for October. Its net sales for October were $15,500.
Its profit margin is: - answer✔31%
Profit Margin = Net Income/Net Sales
Profit Margin = $4,805/$15,500 = 0.31 = 31%
On July 1 of the current calendar year, Olive Company paid $8,900 cash for management
services to be performed over a two-year period beginning July 1. The adjusting entry on
December 31 of the current year for Olive would include: - answer✔A debit to an expense and
a credit to a prepaid expense for $2,225.
$8,900/24 months = $370.83 per month. $370.83 per month × 6 months = $2,225.
Prior to recording adjusting entries, the Office Supplies account had a $390 debit balance. A
physical count of the supplies showed $97 of unused supplies available. The required adjusting
entry is: - answer✔Debit Office Supplies Expense $293 and credit Office Supplies $293.
On July 1, a company paid the $960 premium on a one-year insurance policy with benefits
beginning on that date. What will be the insurance expense on the annual income statement
for the first year ended December 31? - answer✔$480
$960 × 6/12 = $480
A company had no office supplies available at the beginning of the year. During the year, the
company purchased $270 worth of office supplies. On December 31, $75 worth of office
supplies remained. How much should the company report as office supplies expense for the
year? - answer✔$195
$270 − $75 = $195
On January 1, a company purchased a five-year insurance policy for $3,700 with coverage
starting immediately. If the purchase was recorded in the Prepaid Insurance account, and the
, ©THEBRIGHT EXAM SOLUTIONS
11/06/2024 10:41 AM
company records adjustments only at year-end, the adjusting entry at the end of the first year
is: - answer✔Debit Insurance Expense, $740; credit Prepaid Insurance, $740.
$3,700 × 1/5 = $740 per year
On May 1, a two-year insurance policy was purchased for $40,800 with coverage to begin
immediately. What is the amount of insurance expense that would appear on the company's
income statement for the first year ended December 31? - answer✔$13,600.
$40,800 × 8/24 = $13,600
Fragment Company leased a portion of its store to another company for eight months
beginning on October 1, at a monthly rate of $850. Fragment collected the entire $6,800 cash
on October 1 and recorded it as unearned revenue. Assuming adjusting entries are only made
at year-end, the adjusting entry made on December 31 would be: - answer✔A debit to
Unearned Revenue and a credit to Rent Revenue for $2,550.
$6,800 × 3/8 = $2,550 earned by December 31
A company pays its employees $4,150 each Friday, which amounts to $830 per day for the five-
day work week that begins on Monday. If the monthly accounting period ends on Thursday and
the employees worked through Thursday, the amount of salaries earned but unpaid at the end
of the accounting period is: - answer✔$3,320.
4 days × $830/day = $3,320
On January 1, Northern College received $1,380,000 from its students for the spring semester
that it recorded in Unearned Revenue. The term spans four months beginning on January 1 and
the college earns the revenue evenly over the months of the term. Assuming the college
prepares adjustments on January 31, what amount of tuition revenue should the college
recognize for the month of January? - answer✔$345,000.
$1,380,000/4 = $345,000
On December 1, Oren Marketing Company received $4,500 from a customer for a 2-month
marketing plan to be completed January 31 of the following year. The cash receipt was
recorded as unearned revenue. The adjusting entry for the year ended December 31 would
include: - answer✔a debit to Unearned Revenue for $2,250.
Harrod Company paid $5,300 for a 4-month insurance premium in advance on November 1,
with coverage beginning on that date. The balance in the prepaid insurance account before
adjustment at the end of the year is $5,300, and no adjustments had been made previously.
