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a, 1w M at its-rd??? i van-sag. B. (10 Points) Multiple Choice — Select the best answer for each of the following questions. Remember
to place your answers Onto the separate answer sheet. 1. Adjusting entries are necessary to
./ I. obtain a proper matching of revenue and expense.
:2 2. achieve an accurate statement of assets and equities.
.. BL adjust assets and liabilities to their fair market value. 1
1 and2 @9qs . Perez Corporation received cash of $6,000 on August 1, 2005 for one year's rent
in advance and recorded the transaction with a credit to Rent Revenue. The December 31, 2005 adjusting entry is bllQi‘iWéi ill??? YEW. zgoo
' 2900 a. debit Rent Revenue and credit Uneamed Rent, $2,500. 0 b. debit Rent Revenue and credit Uneamed Rent, $3,500. 52-“
(of? debit Uneamed Rent and credit Rent Revenue, $2,500. “d. debit Cash and credit Uneamed Rent, $3,500. Why are certain costs of doing business capitalized when incurred and then
depreciated or amortized over subsequent accounting cycles?
a. To reduce the federal income tax liability
b. To aid management in cash—ﬂow analysis
CCT/TO match the costs of production with revenues as earned
d. To adhere to the accounting constraint of conservatism
If, during an accounting period, an expense item has been incurred and consumed
but not yet paid for or recorded, then the end—of—period adjusting entry would
a. a liability account and an asset account.
b. an asset or contra-asset account and an expense account.
Cg: a liability account and an expense account.
d. a receivable account and a revenue account. When an item of expense is paid and recorded in advance, it is normally called
b. accrued expense.
. estimated expense.
d/Cash expense. ...
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- Spring '08