16 On January 1 the Thunderball Hockey Association sold 300

16) On January 1, the Thunderball Hockey Association sold 300 season passes for $200 each. The season lasts from February through May. If the amount received was credited to unearned revenue, what adjusting entry will be made on February 28? A) Prepaid Subscription Revenue 15,000 Subscription Revenue 15,000 B) Subscription Revenue 45,000 Subscriptions Payable 45,000 C) Unearned Subscription Revenue 15,000 Subscription Revenue 15,000 D) Unearned Subscription Revenue 45,000 Subscription Revenue 45,000 17) The first financial statement prepared from the adjusted trial balance is the ) balance sheet B) statement of net income ) statement of cash flows D) statement of retained earnings 18) Closing revenue accounts results in a credit to income summary A) True B) False 19) All of the following accounts are temporary accounts except A) Gain on Sale of Equipment B) Sales Revenue C) Dividends Payable D) Interest Expense 20) Which of the following statements about earnings quality is false? A) Earnings quality is of considerable interest not only to investors and creditors but also to auditors, and regulators. B) Permanent earnings result in higher earnings quality, while transitory earnings result in lower earnings quality C) Earnings quality is enhanced when managers engage in earnings management. D) Earnings quality captures the degree to which reported income provides financial statement users with useful information for predicting future firm performance.

Solution

16) c:- Unearned subscription revenue account Dr 15000 to subscription revenue account 15000

unearned subsription is asset thats why it is debited , and subsciption revenue ia a revenue thats why it is credited.

17) The first financial statement prepared after adjusted trial balance is the statement of net income.

18) TRUE. Closing balance of revenue accounts,always shows a credit balance thats why they are credited to income summary.

19)All of the accounts are temporary accounts except gain on sale of equipment. All expenses and revenue accounts are temporary accounts.temporary accounts are those accounts whose balace at the end of the year are transfered to another account and starts with zero balance form next year.