Question

1. Peter company signed a $36,000, 3 year rent contract on October 1, year 1, for storage facility merchandise inventory. On October 1st, year 1, Peter company recorded the first year’s payment of 12 months in prepaid rent account. There are no balance in the prepaid rent account to this entry. Peter company records adjustments only at the calendar year end. At December 31, year 1, the adjusting entry needed to accurately reflect the correct balances in the prepaid rent. The rent expense account would be?

2. Broke inc. is experiencing a cashflow problem finding that its cash decreases, even though net income increases. Which would be the possible reason?

3. Retained earnings measure the culmulative excess of _______________ life of a firm.

4. Stock holder’s equity is defined as——

5. Prepaid asset are valued on the balance sheet as —–

 



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