Intermediate accounting I -quiz# 2

Intermediate accounting I -quiz# 2 - Intermediate...

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Unformatted text preview: Intermediate Accounting Quiz # 2, Group Date Name: A common business transaction that would not affect the amount of owners equity is a. signing a note payable to purchase equipment. b. payment of property taxes. c. billing of customers for services rendered. d. payment of dividends. Failure to record the expired amount of prepaid rent expense would not a. understate expense. b. overstate net income. c. overstate owners equity. d. understate liabilities. On June 30, a company paid $3,600 for insurance premiums for the current year and debited the amount to Prepaid Insurance. At December 31, the bookkeeper forgot to record the amount expired. The omission has the following effect on the financial statements prepared December 31: a. overstates owners equity. b. overstates assets. c. understates net income. d. both (a) and (b). Adjusting entries normally involve a. real accounts only. b. nominal accounts only. c. real and nominal accounts. d. liability accounts only. An example of an adjusting entry involving a deferred revenue is a. Cash...................................................................... xxx Unearned Rental Revenue.............................. xxx b. Rental Revenue.................................................... xxx Cash................................................................ xxx c. Unearned Rental Revenue.................................... xxx Rental Revenue............................................... xxx d. Accounts Receivable............................................. xxx Sales............................................................... xxx Moon Company purchased equipment on November 1, 2001, by giving its supplier a 12-month, 9 percent note with a face value of $48,000. The December 31, 2001, adjusting entry is a. debit Interest Expense and credit Cash, $720. b. debit Interest Expense and credit Interest Payable, $720. c. debit Interest Expense and credit Interest Payable, $1,080....
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Intermediate accounting I -quiz# 2 - Intermediate...

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