Homework SoursexHmelp me review the answers of these questions 1A company m
x.Hmelp me review the answers of these questions
1-A company made no adjusting entry for accrued and unpaid employee wagesof $22,000 on December 31. This oversight would:
2-A company had $9,090,000 in net income for the year. Its net sales were$14,800,000 for the same period. Calculate its profit margin. (Roundyour answers to one decimal place.)
1-A company made no adjusting entry for accrued and unpaid employee wagesof $22,000 on December 31. This oversight would:
| A- Overstate assets by $22,000. |
| B- Overstate net income by $22,000. |
| C- Understate net income by $22,000. |
| D - Understate assets by $22,000. |
| Have no effect on net income. |
| A- 14.8% |
| A- Overstate assets by $22,000. |
| B- Overstate net income by $22,000. |
| C- Understate net income by $22,000. |
| D - Understate assets by $22,000. |
| Have no effect on net income. |
Solution
1. D - Understate assets by $22,000
2. F- 61.4%
3. D- A debit to a prepaid expense for $8,500.
4 B- A credit to Rent Earned for $1,800
5.C- A credit to Earned Fees for $3,200
6.B -a credit Earned Fees for $1,467
7.D- Debit Insurance Expense, $2,200; credit PrepaidInsurance, $2,200.
8. B- $731
9. C-$920
10.d-Revenue recognition principle.
11.A-Affect both income statement and balance sheetaccount
12. D-Time period principle
13.D- All of these
14.B-The matching principle
15. E-Adjustments to prepaid expenses, depreciation, andunearned revenues involve previously recorded assets andliabilities.
16. B-Unearned revenues.
17. A -Assets, net income, and equity overstated.
18. C- An overstatement of assets
19. C
20. A
