Questions
22108 Accounting and Accountability - Spring 2025 2. PRACTICE Final Exam - 22108 - Spring 2022
Multiple dropdown selections
Hangry Donuts hires Lara-Ann to handle corporate orders as the business grows. Lara-Ann negotiates a deal to have their donuts in the breakfast buffet at the Four Points Sheraton Central Park hotel - just opposite UTS on George Street. The hotel agrees to pay $500 in advance each month for donuts. Hangry Donuts receives the first payment. Select the flows and accounts that the business would use to record this transaction. Please choose a drop-down selection for every box. Assets = Liabilities + Equity [ Select ] Accounts payable Unearned revenue Inventory Cash Raw materials Accounts receivable Account not required [ Select ] Cash Revenue Bank loan Unearned revenue Account not required [ Select ] Cash Expenses Revenue Cost of sales Unearned revenue Account not required [ Select ] -500 +500 0 [ Select ] -500 +500 0 0
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Step-by-Step Analysis
We begin by restating the scenario to identify the proper accounting treatment. Hangry Donuts receives $500 in advance from Four Points Sheraton for donuts that will be supplied later. This means cash is received now, but revenue has not yet been earned because the obligation is to provide donuts in the future. The transaction therefore creates a liability (unearned revenue) rather than recognizing revenue yet, and it increases an asset (cash).
Option-by-option analysis:
Option 1 (Assets, Liabilities, Equity column box): The cor......Login to view full explanationLog in for full answers
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Hangry Donuts hires Lara-Ann to handle corporate orders as the business grows. Lara-Ann negotiates a deal to have their donuts in the breakfast buffet at the Four Points Sheraton Central Park hotel - just opposite UTS on George Street. The hotel agrees to pay $500 in advance each month for donuts. Hangry Donuts receives the first payment. Select the flows and accounts that the business would use to record this transaction. Please choose a drop-down selection for every box. Assets = Liabilities + Equity [ Select ] Accounts payable Unearned revenue Inventory Cash Raw materials Accounts receivable Account not required [ Select ] Cash Revenue Bank loan Unearned revenue Account not required [ Select ] Cash Expenses Revenue Cost of sales Unearned revenue Account not required [ Select ] -500 +500 0 [ Select ] -500 +500 0 [ Select ] -500 +500 0
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