RTV Industries collects rent from several properties. Prior to recording adjusting entries, assume the rent revenue ledger account has a credit balance of $80,000. Two adjustments are made: (1) a receivable for accrued rent revenue of $6,000 is established, and (2) the unearned rent revenue ledger account is increased by $2,000. After posting these adjusting entries, the rent revenue ledger account should have a balance of:

Question

BlackTom AI · Accepted Answer

The problem starts with a rent revenue ledger balance of 80,000 on the credit side. We need to apply the two adjusting entries and see how each affects the rent revenue account.

Option a (a. $76,000): This would require a net decrease of 4,000 from the original 80,000. The two adjustments add a 6,000 credit for accrued rent revenue, which would increase the rent revenue balance if recorded as a credit. The second adjustment increases unearned revenue by 2,000, which, to increase unearned revenue, would be recorded with a debit to rent revenue (reducing rent revenue). Net effect would be +6,000 (from accrual) and −2,000 (from the revenue being moved to unearned), totaling +4,000. Therefore, 80,000 + 4,000 = 84,000, not 76,000. So this option is incorrect.

Option b (b. $84,000): This option matches the net effect we calculated. The accrued rent revenue of 6,000 increases rent revenue (credit 6,000), while increasing unearned revenue by 2,000 requires a debit to rent revenue of 2,000 (reducing rent revenue). The overall change is +6,000 − 2,000 = +4,000. Starting from 80,000, the new balance is 84,000. This aligns with the described adjustments, so this is the correct outcome.

Option c (c. $88,000): To reach 88,000, the net increase would have to be +8,000 from adjustments. However, the accrual adds +6,000 and the transfer related to unearned revenue reduces rent revenue by 2,000 (not adds), giving only +4,000 total. Therefore 88,000 would be incorrect.

Option d (d. Non of the other options): Since we can demonstrate that 84,000 is the result of the adjustments, this option cannot be correct.

Option e (e. $72,000): This would require a net decrease of 8,000. With the entries described, the net change is +4,000, not −8,000, so this option is clearly wrong.

MCD2160 - T1 - 2025 MCD2160 Trimester 1 2025 Mid Test Practice Quiz

查看解析

登录即可查看完整答案

类似问题

On December 1, Ford Company received three months’ rental income in advance and increased a liability account. On December 31, the end of the accounting period, Ford failed to make an adjusting entry reflecting that a portion of this rent had been earned. This error results in:

Received $1,000 invoice for April's utilities expense. (Hint: Bills and invoices reflect goods or services that have been provided, but are unpaid, unless specified otherwise.)

For what are Adjustments used?

For the year ending December 31, Orion, Inc. mistakenly omitted adjusting entries for $1,500 of supplies that were used, (2) unearned revenue of $4,200 that was earned, and (3) insurance of $5,000 that expired. For the year ending December 31, what is the effect of these errors?

At the end of the fiscal year, the usual adjusting entry to prepaid insurance to record expired insurance was omitted. Which of the following statements is true?

更多留学生实用工具

考试浏览器助手

风格化写作助手

论文查重助手

文献引用助手

课堂转译助手

课堂笔记助手

Quiz搜索助手

学校历年真题

智能刷题助手

智能匹配练习

希望你的学习变得更简单