Quiz Answer Key and Fun Facts
1. Julia Child goes to the grocery store to buy some lamb chops, lettuce, tomatoes, and various herbs and spices which are used on her cooking show. How should she record this purchase?
2. Julia Childs buys a new stove for $12,000 to use on her cooking show by writing a check for the full amount. How should she record the purchase?
3. Julia Childs sells a one year $120,000 advertising sponsorship of her cooking show in December for the following year. What is the most appropriate way to record this transaction in December when the cash is received?
4. If Julia Childs forms a new company called Julia's Women's Wear, what is the most appropriate way to record on the financial statement the $50,000 she pays to her lawyers for drawing up the incorporation documents for the new company?
5. If Julia Childs is using accrual accounting and she pays $1000.00 to the contracted maid service for the show in February, for work done in January, what entry should she make on her books in January?
6. What entry should Julia make in February when she issues a check for maid expense that was accrued for in January?
7. Assume Julia Childs was using the cash method of accounting and the maid performed work in January for which she received $1,000 in February. What journal entry should be made in January?
8. If Julia Childs wanted to inflate January earnings, how should she "cook" the books?
9. Julia Childs received $240,000 in January 2001 for a twenty-four month advertising sponsorship. Ignoring GAAP, how would she record the transaction to show maximum revenue for January 2001?
10. Julia Childs received $240,000 in January 2001 for a twenty-four month advertising sponsorship. What is the PROPER entry to make in January for this transaction?
Source: Author
Akhnaten
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Brainyblonde before going online.
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