Chapter 3Online version Accounting 161 - Adjusting Accounts for Financial Statements by Natalia Kania 1 Prepare the correct entry: Received $10,000 cash in advance of performing a work for PAL Leaders, LLC a Debit Cash for $10,000; Credit Unearned Revenue for $10,000 b Debit Unearned Revenue for $10,000; Credit Cash for $10,000 c Debit Unearned Revenue for $10,000; Credit Revenue for $10,000 d No journal entry required. 2 On January 1, the company purchased a new van for $45,000. The estimated useful life is 5 years with a salvage value of $5,000. The company uses the straight-line method of depreciation. How much depreciation will be recorded for the first year ended December 31? a $9,000 b $8,000 c $10,000 d $14,000 3 Unearned revenue is a(n)... a Asset b Liability c Contra Account d Owner's Equity 4 True or False: A fiscal year consists of 12 consecutive months or 52 weeks. a True b False 5 True or False: Cash basis accounting is GAAP approved. a True b False
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