FINANCIAL ACCOUNTING EXAM
EXPECTED QUESTIONS AND THEIR
VERIFIED ANSWERS
All You Need To Know (AYNTK) magazine received
$60,000 cash in annual subscriptions in December
2013. AYNTK is a monthly publication and all of these
subscriptions commence in January 2014. What entry
should AYNTK make on January 31, 2014 related to
the subscription services provided for one month?
The correct answer is to debit Deferred Revenue for
$5,000 as the company no longer has the liability for one
month's worth of subscription, and credit Revenue for
$5,000 to recognize the revenue associated with one
month's worth of services provided.
Calculate the Asset Turnover for H&M based on its
Balance Sheet and Income Statement. Use average
balances in your calculation where applicable. (On
11/30/2012, H&M had total assets of $60,173.)
Asset Turnover is calculated by dividing the annual
revenue by the average asset value for the year. In this
case, we are using the average of beginning and end of
year asset values.
Revenue / Average Assets = 128,,925 = 2.04
The suggested correct answer formula is:
EXPECTED QUESTIONS AND THEIR
VERIFIED ANSWERS
All You Need To Know (AYNTK) magazine received
$60,000 cash in annual subscriptions in December
2013. AYNTK is a monthly publication and all of these
subscriptions commence in January 2014. What entry
should AYNTK make on January 31, 2014 related to
the subscription services provided for one month?
The correct answer is to debit Deferred Revenue for
$5,000 as the company no longer has the liability for one
month's worth of subscription, and credit Revenue for
$5,000 to recognize the revenue associated with one
month's worth of services provided.
Calculate the Asset Turnover for H&M based on its
Balance Sheet and Income Statement. Use average
balances in your calculation where applicable. (On
11/30/2012, H&M had total assets of $60,173.)
Asset Turnover is calculated by dividing the annual
revenue by the average asset value for the year. In this
case, we are using the average of beginning and end of
year asset values.
Revenue / Average Assets = 128,,925 = 2.04
The suggested correct answer formula is:
