FRANKLIN COLLEGE BUSINESS 115 FINANCIAL ACCOUNTING SPRING SEMESTER 2008 PRACTICE QUIZ # 4 (CHAPTER 4) WEDNESDAY FEBRUARY 20 TH Name:_________________________________ Read all questions carefully before answering. For “True or False” questions, write a “T” or an “F” in the margin space to the left of the question as appropriate. 1. Adjusting entries almost always involve a change in the debit balance of the Cash account. 2. Monroe Company today paid $3,600 cash for an insurance policy providing three years future protection against fire loss. This transaction could properly be recorded in the journal by a $3,600 debit to Insurance Expense and a $3,600 credit to Cash. 3. Every adjusting entry involves the recognition of either revenue or expenses, but not both at once. 4. The accidental omission of the adjusting entry needed to accrue an unrecorded expense (e.g., wages) at the end of the period would cause liabilities in the balance sheet to be understated. 5
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This note was uploaded on 04/20/2008 for the course BUS 115 taught by Professor Rocourt during the Spring '08 term at Franklin CH.