Homework #2 :Introduction to Financial Accounting (Business Foundations Specialization) Answers 2026

✅ Question 1

Which transactions would produce $10,000 of revenue in December?

❌ BOC Realty leases space for Dec & Jan, prepaid $20,000 in Nov
✅ BOC Realty leases space for December and tenant pays $10,000 in December
✅ BOC Bank is owed $10,000 interest for December, paid in January
✅ BOC Realty leases space for December and bills $10,000 to be paid in January
❌ BOC Bank receives $10,000 in December for November’s interest

✅ Question 2

Which transactions produce $10,000 of expenses in December?

✅ BOC pays advertising agency $10,000 for December ads
❌ BOC pays $10,000 cash dividends
❌ BOC pays auditor $12,000 in December
❌ COO hired in December, starts in January
✅ BOC receives $10,000 legal invoice for December services

✅ Question 3

Customer deposit $2,000 for future goods

✅ Dr. Cash 2,000
  Cr. Advances from Customers 2,000

❌ Dr. Cash / Cr. Revenue
❌ Dr. Advances / Cr. Cash
❌ Dr. Cash / Cr. Inventory
❌ Dr. Deposits / Cr. Future Revenue

✅ Question 4

Customer paid $10,000, goods cost $8,000

❌ Dr. Cash 10,000 / Cr. Revenue 10,000
  Dr. A/P 8,000 / Cr. Inventory 8,000

✅ Dr. Cash 10,000 / Cr. Revenue 10,000
  Dr. COGS 8,000 / Cr. Inventory 8,000

❌ Dr. Cash 10,000 / Cr. Inventory 8,000 / Cr. Revenue 2,000
❌ Dr. Cash 10,000 / Cr. Revenue 10,000
❌ Dr. Cash 10,000 / Cr. Inventory 10,000

✅ Question 5

Quarterly depreciation (Cost 100,000 | Salvage 20,000 | Life 10 yrs)

❌ $2,500
❌ $8,000
❌ $10,000
❌ $1,000
✅ $2,000

✅ Question 6

Prepaid rent $30,000 (Dec–Feb), adjusting entry Dec 31

❌ No entry needed
✅ Dr. Rent Expense 10,000
  Cr. Prepaid Rent 10,000
❌ Dr. Rent Expense 30,000 / Cr. Cash 30,000
❌ Dr. Rent Expense 10,000 / Cr. Cash 10,000
❌ Dr. Rent Expense 30,000 / Cr. Prepaid Rent 30,000

✅ Question 7

Building depreciation (1,000,000 cost, 200,000 salvage, 20 yrs)

❌ Dr. Dep Exp 50,000 / Cr. Building
❌ Dr. Dep Exp 40,000 / Cr. Accum Dep
✅ Dr. Dep Exp 40,000 / Cr. Accum Dep 40,000
❌ No entry needed
❌ Dr. Dep Exp 40,000 / Cr. Building

✅ Question 8

Customer deposit $5,000 for Jan delivery (already recorded)

✅ No entry needed
❌ Dr. Cash / Cr. Revenue
❌ Dr. Unearned Rev / Cr. Inventory
❌ Dr. Unearned Rev / Cr. Revenue
❌ Dr. Advances from Customers / Cr. Revenue

✅ Question 9

Which item NOT on Income Statement?

✅ Dividends
❌ Pre-tax Income
❌ Gross Profit
❌ Operating Income
❌ SG&A Expense

✅ Question 10

Temporary accounts (check all that apply)

❌ Retained Earnings
✅ Sales Revenue
❌ Dividends Payable
✅ Income Tax Expense
✅ Cost of Goods Sold

🧾 Summary Table (All Correct Answers)