SHARJAH HIGHER COLLEGES OF TECHNOLOGY
17. Khaled Repair Shop follows the revenue recognition principle. Khaled services a car on
October 31. The customer picks up the vehicle on November 1 and mails the payment to
Khaled on November 5. Khaled receives the check in the mail on November 6. When
should he show that the revenue was earned?
A. October 31
B. November 1
C. November 5
D. November 6
18. Saif Company paid employee wages on and through Thursday, January 26, and the next payroll
will be paid in February. There are three more working days in January (29-31).
Employees work 5 days a week and the company pays AED900 a day in wages. What will
be the adjusting entry to accrue wages expense at the end of January?
A. Debit Wages Expense for AED900 and Credit Wages Payable for AED
B. Debit Wages Expense for AED4,500 and Credit Wages Payable for AED4,500
C. Debit Wages Expense for AED2,700 and Credit Wages Payable for AED 2,700
D. No adjusting entry is required.
900
19. Sultan Music Store borrowed AED 12,000 from the bank signing a 9%, 3-month note on
September 1. Principal and interest are payable to the bank on December 1. If the company
prepares monthly financial statements, the adjusting entry that the company should make
for interest on September 30, would be
A. Debit Interest Expense, AED1,080; Credit Interest Payable, AED1,080.
B. Debit Interest Expense, AED90; Credit Interest Payable, AED90.
C. Debit Note Payable, AED1,080; Credit Cash, AED1,080.
D. Debit Cash, AED270; Credit Interest Payable, AED270.
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