4. The balances in deferred revenue accounts represent amounts that are Earned Y

Question

4. The balances in deferred revenue accounts represent amounts that are Earned Yes Yes I. Collected No Yes No Yes bns ont to sonolod d. IV 5· The accountant failed to make the adjusting entry to record the depreciation for the year. This error would cause a. an overstatement of assets b. an overstatement of expenses c. an understatement of liabilities d. an understatement of owners' equity e. an understatement of net income 6. Jim Yount, M.D., keeps his accounting records on the cash basis. During 2015, Dr. Yount collected $350,000 from his patients. At December 31, 2014, Dr. Yount had accounts receivable of $40,000 and no unearned revenue. At December 31, 2015, Dr. Yount had accounts receivable of $70,000 and unearned revenue of $10,000. On the accrual basis, how much was Dr. Yount's patient service revenue for 2015? a· $310,000. b. $360,000. c. $370,000. d· $380,000. e· $390,000. 7. On an income statement, which of the following would appear after the heading of operating income"? a. Delivery expenses b. Other operating income c. Operating expenses d. Extraordinary items e. Interest income and expenses

Explanation / Answer

4) answer is d i.e. IV

The balance in deferred revenue account represent amounts that is collected but not earned.

5)Answer is a a,d,e

Asset, net income, and stockholder's equity are all overstated.

6) Answer is e i.e $3,90,000

Cash received + closing balance of account receivalbles + unearned revenue - Opening balance of account receivables

$3,50,000+$70,000+$10,000-$40,000

$3,90,000

7)answer is e

i.e.interest income and expenses.

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