Author: Anonymous

On May 1, Urbanek, Inc. sold merchandise in the amount of $5,800 to Sanders, with credit terms of 2/10, n/30. The cost of the items sold is $4,000. Urbanek uses the perpetual inventory system and the gross method. The journal entry or entries that Urbanek will make on May 1 is:

Temporary accounts include all of the following except:

Longmont has beginning equity of $277,000, net income of $63,000, dividends of $25,000 and no additional investments by stockholders during the period. Its ending equity is:

A law firm collected $1,800 on account for work performed in the previous month. Which of the following general journal entries will the firm make to record this transaction?

Longmont has beginning equity of $277,000, net income of $63,000, dividends of $25,000 and no additional investments by stockholders during the period. Its ending equity is:

Generally accepted accounting principles are the basic assumptions, concepts, and guidelines for preparing financial statements.

After posting the entries to close all revenue and expense accounts, Marker Company’s Income Summary account has a credit balance of $6,000, and its Dividends account has a debit balance of $2,500. These balances indicate that net income for the current accounting period amounted to $3,500.

Seminole Company uses the direct write-off method of accounting for uncollectible accounts. On May 3, the Seminole Company wrote off the $2,000 uncollectible account of its customer, A. Hopkins. On July 10, Seminole received a check for the full amount of $2,000 from Hopkins. On July 10, the entry or entries Seminole makes to record the recovery of the bad debt is:

Revenue accounts are temporary accounts that should begin each accounting period with zero balances.

Bluebell, Inc. purchases a machine at the beginning of the year at a cost of $24,000. The machine is depreciated using the straight-line method. The machine’s useful life is estimated to be 5 years with a $4,000 salvage value. Depreciation expense in year 2 is: