beginner2013
Aug 25, 2013, 03:32 PM
I have some questions, which I'm not sure if I got them correct.
So I hope for some help.
1. During 2005, P. recorded sales of $17k. How much cash did it collect from its customers?
remark: There is a pictures of a balance sheet which shows an increased accounts receivable by $3k. And the cash increased by $7k
-$17k
-$14k
-$3k
- cannot be estimated
I would say, normally sales means cash but the accounts receivable increase which means that something was sold on credit. That the cash only increases by $7k should be irrelevant since cashes increases and decreases not equally to sales, right? So I assume the following should be done subtract the $3k from the $17k.
2. During 2005, S Foods, Inc. records an interest expense of $5k, and pays $2k of it in cash. How should this accounting transaction be recorded?
-Debit interest expense $5k; credit cash $2k; credit taxes payable $3k
-Debit interest expense $5k; credit cash $2k; credit interest payable $3k
-Debit various debt accounts $5k; credit cash $2k; credit interest payable $3k
-Debit interest expense $5k; credit cash $2k; credit various debt accounts $3k
Since it is only interest cash mentioned I would assume that you book it only under this and not under various accounts, or can you do that?
3. S. Company estimates its 2005 tax expenses to be $80k. It makes a cash payment of $20k to the tax authorities on Dec. 31, 2005. How should this transaction be recorded by S.
-Debit Tax expenses $80k; credit cash $60k; credit taxes payable $20k
-Debit Tax expenses $80k; credit cash $20k; credit taxes payable $60k
-Debit Tax expenses $80k; credit cash $20k;
-Debit Tax expenses $80k; credit cash $20k; credit accounts payable $60k
I assumed that the estimations is used like a fact, but you usually using precise values in the balance sheet so I'm not sure if you do it like that.
I really hope that someone can help me and I didn't get a problem with the basic understandings of accounting.
So I hope for some help.
1. During 2005, P. recorded sales of $17k. How much cash did it collect from its customers?
remark: There is a pictures of a balance sheet which shows an increased accounts receivable by $3k. And the cash increased by $7k
-$17k
-$14k
-$3k
- cannot be estimated
I would say, normally sales means cash but the accounts receivable increase which means that something was sold on credit. That the cash only increases by $7k should be irrelevant since cashes increases and decreases not equally to sales, right? So I assume the following should be done subtract the $3k from the $17k.
2. During 2005, S Foods, Inc. records an interest expense of $5k, and pays $2k of it in cash. How should this accounting transaction be recorded?
-Debit interest expense $5k; credit cash $2k; credit taxes payable $3k
-Debit interest expense $5k; credit cash $2k; credit interest payable $3k
-Debit various debt accounts $5k; credit cash $2k; credit interest payable $3k
-Debit interest expense $5k; credit cash $2k; credit various debt accounts $3k
Since it is only interest cash mentioned I would assume that you book it only under this and not under various accounts, or can you do that?
3. S. Company estimates its 2005 tax expenses to be $80k. It makes a cash payment of $20k to the tax authorities on Dec. 31, 2005. How should this transaction be recorded by S.
-Debit Tax expenses $80k; credit cash $60k; credit taxes payable $20k
-Debit Tax expenses $80k; credit cash $20k; credit taxes payable $60k
-Debit Tax expenses $80k; credit cash $20k;
-Debit Tax expenses $80k; credit cash $20k; credit accounts payable $60k
I assumed that the estimations is used like a fact, but you usually using precise values in the balance sheet so I'm not sure if you do it like that.
I really hope that someone can help me and I didn't get a problem with the basic understandings of accounting.