Consider the following events for Sophia Incorporated:
April 5 Sophia purchases volleyballs for $200 on account.
April 6 Sophia advertises a sand volleyball camp for $20 a person.
April 12 Thirty people sign up for the camp paying a total of $600.
April 21 Sophia hosts the sand volleyball camp.
April 23 Sophia pays for the volleyballs purchased on April 5.
Under cash-basis accounting, what is the appropriate day to record the revenues related to the sand volleyball camp?
A) April 5.
B) April 12.
C) April 21.
D) April 23.
Answer: B
Which one of the following best describes the characteristics of adjusting entries?
A) Adjusting entries reduce the balance of revenue, expense, and dividend accounts to zero.
B) Adjusting entries update balances for the recognition of cash flows.
C) Adjusting entries update balances for the recognition of investments from and distributions to stockholders.
D) Adjusting entries update balances for the recognition of revenue and expenses.
Answer: D
Consider the following events for Sophia Incorporated:
April 5 Sophia purchases volleyballs for $200 on account.
April 6 Sophia advertises a sand volleyball camp for $20 a person.
April 12 Thirty people sign up for the camp paying a total of $600.
April 21 Sophia hosts the sand volleyball camp.
April 23 Sophia pays for the volleyballs purchased on April 5.
Under cash-basis accounting, what is the appropriate day to record the expenses related to the sand volleyball camp?
A) April 5.
B) April 12.
C) April 21.
D) April 23.
Answer: D
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