Since the revenue recognition principle requires that revenues be recorded when earned, there are no unearned revenues in accrual accounting.

The following information is taken from Clinton Company’s December 31 balance sheet:      Cash and cash equivalents $ 8,419 Accounts receivable   70,422 Merchandise inventories   60,362 Prepaid expenses   4,100 Accounts payable $ 14,950 Notes payable   86,638 Other current liabilities   9,500 If net credit sales for the current year were $612,000, the firm’s days’ sales uncollected for the year is: (Use 365 days a year.)

On March 12, Korn Company sold merchandise in the amount of $7,800 to Babcock Company, with credit terms of 2/10, n/30. The cost of the items sold is $4,500. Korn uses the perpetual inventory system and the gross method of accounting for sales. The journal entry or entries that Korn will make on March 12 is:

On July 9, Muffin Inc. receives an $8,500, 90-day, 8% note from customer  Summers Clayton as payment on account. What entry should be made on July 9 to record receipt of the note?

At the end of its first month of operations, Don’s Repair Services reported net income of $25,000. They also had account balances of: Cash, $18,000; Office Supplies, $2,000 and Accounts Receivable $10,000. The sole stockholder’s total investment in exchange for common stock for this first month was $5,000. There were no dividends in the first month. Calculate the amount of total equity to be reported on the balance sheet at the end of the month.

Newton owns equipment that cost $93,500 with accumulated depreciation of $64,000. Newton asks $35,000 for the equipment but sells the equipment for $33,000. Compute the amount of gain or loss on the sale.

During the closing process, Retained Earnings is closed to the Dividends account.

If Tyler Smith, the sole stockholder of Smith Hardware, uses cash of the business to purchase a family automobile, the business should record this use of cash with an entry to:

Identify the account below that is classified as a liability in a company’s chart of accounts:

Kennedy Inc. sold $300 of merchandise to a customer who used a Capitol Two Bank credit card. Capitol Two Bank deducts a 1.5% service charge for sales on its credit cards and credits Kennedy’s account immediately when sales are made. The journal entry to record this sale transaction would be: