Amber Owns and Operates Bistro Café in Space Leased in a Building

question 51

Multiple Choice

Amber owns and operates Bistro Café in space leased in a building owned by Ciera. The lease requires a base rent of $1,500, plus 10 percent of Bistro's profits, each month. The term is two years. Amber and Ciera are

• A)not partners, because Ciera does not have an ownership interest or management rights in Bistro.
• B)not partners, because the lease includes "base rent."
• C)not partners, because the rent includes only 10 percent of the profits.
• D)partners in a partnership for two years.

Journalize adjusting entries for unearned revenues, prepaid expenses, accrued expenses, and depreciation.

Explain the effects of omitting adjusting entries on financial statements.

Prepare necessary journal entries for payroll adjustments.

Calculate and adjust for supplies and insurance expense adjustments.

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Definitions:

Economic Theory

A concept or principles developed to explain how economies work and how economic agents interact.

Substitute Goods

Goods or services that act as substitutes for each other, meaning that if the price of one goes up, the demand for the other also rises.

Production Costs

The total expenses incurred in manufacturing a product or offering a service, including raw materials, labor, and overhead.

Consumer Income

The total amount of income a consumer or household earns from various sources, including employment, investments, and benefits, which impacts their spending and saving behaviors.