First Section Practice Problems 3 with Solutions

First Section Practice Problems 3 with Solutions - Practice...

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Unformatted text preview: Practice Problems 1. When prepaid insurance has been used, the following adjustment will be necessary: a. Increase insurance expense, decrease cash b. Increase prepaid insurance, decrease insurance expense c. Increase insurance expense, increase prepaid insurance d. Increase insurance expense, decrease prepaid insurance Insurance Expense XXXX Prepaid Insurance XXXX 2. Stuart Co. received $10,000 from a customer as payment for a credit sale made in a previous accounting period. Stuart will record this as a. $10,000 in sales revenue b. $10,000 reduction in accounts payable c. $10,000 reduction in accounts receivable d. $10,000 increase in accounts receivable Cash $10,000 Accounts Receivable $10,000 3. Which of the following accounts is a liability? a. Depreciation expense b. Dividends c. Accumulated depreciation d. Unearned advertising fees 4. The Bojangles Company recorded a cash collection on account by debiting Cash and crediting Accounts Payable. What will the t rial balance show for this error? a. Too much for liabilities b. Too much for assets c. The trial balance will not balance d. Both a and b e. The trial balance will be correct; the entry was correct Did book Shouldve booked Cash XXXX Cash XXXX Accounts Payable XXX Accounts Receivable XXXX Net impact is accounts payable is too high and accounts receivable is too high 5. If the t rial balance is in balance, the financial statements will...
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First Section Practice Problems 3 with Solutions - Practice...

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