17 an accrued expense can best be described as an

17. An accrued expense can best be described as an amount
a. paid and currently matched with earnings.
b. paid and not currently matched with earnings.
c. not paid and not currently matched with earnings.
d . not paid and currently matched with earnings. K, W & W
55. Accrued expenses: 22. On March 1, 2003, Forest Co. borrowed cash and signed a 36-month, interest-bearing note on
which both the principal and interest are payable on February 28, 2006. At December 31,
2004, the liability for accrued interest should be
b . 22 months' interest. d. 36 months' interest. S, S & S
16
. The employees of Neat Clothes work Monday through Friday. Every other Friday the company
issues payroll checks totaling $32,000. The current pay period ends on Friday, July 3. Neat
Clothes is now preparing quarterly financial statements for the three months ended June 30.
What is the adjusting entry to record accrued salaries at the end of June? S, S & T
AICPA BOARD EXAMINATION QUESTIONS Page 7 of 33

THEORY OF ACCOUNTS 03 – THE ACCOUNTING PROCESS
A. Salaries expense
Prepaid salaries
Salaries payable
22,400
9,600
32,000
B. Salaries expense
Salaries payable
6,400
6,400
C. Prepaid salaries
Salaries payable
9,600
9,600
D . Salaries expense
Salaries payable
22,400
22,400
17 . Papa’s Pastry Shoppe borrowed $8,000 at 9% interest on May 1, 2003, with principal and
interest due on October 31, 2003. The company's fiscal year ends June 30, 2003. What
adjusting entry would the company record on June 30, 2003? S, S & T C. Interest expense
Interest payable
120
120
D. Prepaid interest
Interest payable
120
120
Questions 24 and 25 are based on the following information. CMA 1282 4-5 & 6
RAR Enterprises prepares monthly financial statements. The clerical staff is paid every 2 weeks on
the Monday following the end of the 2-week (10 working days) pay period ending on the prior
Friday. The last pay period ended on Friday, November 19. The next payday is Monday, December
6 for the pay period ending December 3. The total clerical payroll for a 2-week period is $30,000,
income tax withholding averages 15%, and Social Security taxes amount to 6.5%. None of the
clerical staff's earnings will exceed the maximum limit for Social Security taxes.