This question has been answered by cmenezes on Oct 24, 2012. View Solution
Barney posted a question Oct 20, 2012 at 4:18pm
1) As prepaid rent is used, the asset becomes a(n): I think A
A) expense.
B) revenue.
C) contra-asset.
D) liability.

2) Andrew Antiques showed store supplies available during the year of $400. A count of the
supplies on hand as of May 31 is $150. The adjusting entry for Store Supplies would include: I think C
A) a debit to Store Supplies for $150.
B) a credit to Store Supplies Expense for $150.
C) a debit to Store Supplies Expense for $250.
D) a credit to Store Supplies Expense for $250.

3) Home Decorating estimated depreciation on buildings as $7,000. The adjusting entry for
depreciation of the buildings would include: I think B
A) a credit to Depreciation Expense for $7,000.
B) a credit to Accumulated Depreciation for $7,000.
C) a credit to Buildings for $7,000.
D) a debit to Accumulated Depreciation for $7,000.

4) Total wages per week are $500. You need to accrue $300 of wages. The adjusting entry would
include which of the following? I chose C
A) Debit Wages Expense, $200; credit Wages Payable, $200
B) Debit Wages Expense, $300; credit Cash, $300
C) Debit Wages Expense, $300; credit Wages Payable, $300
D) Debit Wages Expense, $500; credit Wages Payable, $500

5) On March 1, Ronald Company paid in advance $7,000 for seven months’ rent. The March 31
adjusting entry for rent expense should include: I chose B
A) debit Rent Expense, $2,500.
B) debit Rent Expense, $1,000.
C) debit Rent Expense, $2,000.
D) credit Prepaid Rent, $3,500.

6) The adjustment for accrued wages failed to include the closing date wages. This would: I chose C
A) understate this period’s net income and overstate the next period’s net income.
B) overstate this period’s net income and overstate the next period’s net income.
C) overstate this period’s net income and understate the next period’s net income.
D) understate this period’s net income and understate the next period’s net income.
Unit 2 Examination
7) There was no adjustment made for the prepaid insurance. This would:
A) overstate this period’s net income and overstate the next period’s net income.
B) understate this period’s net income and overstate the next period’s net income.
C) overstate this period’s net income and understate the next period’s net income.
D) understate this period’s net income and understate the next period’s net income.

8) The adjustment for the deferral of a prepaid item was omitted. This would:
A) understate the period’s expenses and overstate the period end assets.
B) overstate the period’s expenses and overstate the period end assets.
C) understate the period’s expenses and understate the period end assets.
D) overstate the period’s expenses and understate the period end assets.





9) To record the expiration of part of the lease (rent) will require an adjustment of:
A) increasing the total assets and decreasing the total expenses at the end of the month.
B) decreasing the total assets and decreasing the total expenses at the end of the month.
C) decreasing the total assets and increasing the total expenses at the end of the month.
D) increasing the total assets and increasing the total expenses at the end of the month.


10) The equipment is another year older. How will this affect the balance sheet? I think C

A) Owner’s equity will be increased.
B) Liabilities will be decreased.
C) Assets will be decreased.
D) This has no effect on the period end balance sheet.

11) The depreciation expense will appear in which of the following worksheet statement columns? I think A is correct
A) The Income Statement debit
B) The Balance Sheet debit
C) The Income Statement credit
D) The Balance Sheet credit

12) An account in which the balance is not carried over from one accounting period to the next is
called a: I choose D
A) real account.
B) permanent account.
C) zero account.
D) temporary account.
Unit 2 Examination
13) After posting the closing entries, which of the following accounts is most likely not to have a
zero balance? I chose C
A) J. Smith, Withdrawals
B) Advertising Expense
C) Medical Fees
D) Prepaid Insurance

14) How do you close a revenue? I believe it is B
A) Debit Income Summary; credit Revenue
B) Debit Capital; credit Revenue
C) Credit Income Summary; debit Revenue
D) Credit Capital; debit Revenue

15) Adam’s Tree Service depreciation for the month is $150. The adjusting journal entry is:
A) Depreciation Expense 150
Depreciation Payable 150
B) Depreciation Expense 150
Accumulated Depreciation 150
C) Depreciation Expense 150
Equipment 150
D) Accumulated Depreciation 150
Depreciation Expense 150







16) The entry to close the appropriate insurance account at the end of the accounting period is to
debit: I think C
A) Income Summary; credit Prepaid Insurance.
B) Prepaid Insurance; credit Income Summary.
C) Income Summary; credit Insurance Expense.
D) Insurance Expense; credit Income Summary.

17) The balance in the Insurance Expense account of the worksheet was $355. The journal entry
to close the Insurance Expense account is: I think D
A) Insurance Expense 355
Capital 355
B) Insurance Expense 355
Prepaid Insurance 355
C) Insurance Expense 355
Income Summary 355
D) Income Summary 355
Insurance Expense 355
Unit 2 Examination
18) The business failed to close any of the revenue accounts, this error will cause:
A) the assets will be overstated.
B) the liabilities will be overstated.
C) before closing it, Income Summary will have a debit balance.
D) before closing it, Income Summary will have a credit balance.

19) The entry to close the revenue account(s) was entered in reverse - Income Summary was
debited and the revenue account(s) was/were credited, this error will:
A) before closing it, Income Summary will have a debit balance.
B) the liabilities will be overstated.
C) before closing it, Income Summary will have a credit balance.
D) the assets will be overstated.

24) The August bank statement for Mobile Service shows a balance of $8,900, but the balance per
books shows a cash balance of $8,310. Other information includes:
1. A check for $10 was recorded on the books as $100.
2. Included on the bank statement was a note collected by the bank for $600 plus interest of
$40.
3. Checks outstanding totaled $480.
4. Bank service charges were $20.
5. Deposits in transit were $600.
Which item(s) should be subtracted from the balance per books? I think A
A) Checks outstanding and bank service charge
B) Bank service charge and note collected by the bank
C) Bank service charge
D) Deposit in transit

25) From the bank reconciliation no entry was recorded for the interest on a note collected. This
would cause: I believe D
A) liabilities to be understated.
B) assets to be overstated.
C) liabilities to be overstated.
D) assets to be understated.
answered the question Oct 24, 2012 at 7:40am
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1) As prepaid rent is used, the asset becomes a(n): I think A
A) expense.
B) revenue.
C) contra-asset.
D) liability.
As prepaid rent is used, the asset becomes A) expense.
Current asset reduces and...


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