16646735
Question 1
Question
In which month should Kelly record the cost of the cleaning supplies as an expense?
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Q 3 (binary/octet-stream)
Answer
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January
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February
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March
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April
Question 2
Question
In which month should Kelly report the $35 revenue on the company’s Income Statement?
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Q 3 (binary/octet-stream)
Answer
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January
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February
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March
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April
Question 3
Question
If Kelly Company uses the cash basis of accounting instead of the accrual basis, in
which month will it report revenue and in which month will it report expense?
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Q 3 (binary/octet-stream)
Answer
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Revenue: February Expense: February
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Revenue: March Expense: April
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Revenue: February Expense: April
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Revenue: March Expense: February
Question 4
Question
In which month should revenue be recorded?
Answer
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. In the month that goods are ordered by the customer
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In the month that cash is collected from the custome
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In the month that the invoice is mailed to the customer
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In the month that goods are shipped to the customer
Question 5
Question
Dumbo adjusts the accounts at the end of each month. Based on these facts, the adjusting entry
at the end of January should include:
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Q3 49 (binary/octet-stream)
Answer
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a. a debit to Prepaid Rent for $1,000. c
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a debit to Prepaid Rent for $200.
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a credit to Prepaid Rent for $1,000.
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. a credit to Prepaid Rent for $200.
Question 6
Question
Assume the same facts as in question 3-49. Dumbo’s adjusting entry at the end of
February should include a debit to Rent Expense in the amount of
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Q3 49 (binary/octet-stream)
Answer
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$400
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$0
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$200
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$1000
Question 7
Question
What effect does the adjusting entry in question 3-50 have on Dumbo’s net income for
February?
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Q3 49 (binary/octet-stream)
Answer
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Increase by $200
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Increase by $400
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. Decrease by $200
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Decrease by $400
Question 8
Question
An adjusting entry recorded April salary expense that will be paid in May. Which statement best describes the effect of this adjusting entry on the company’s accounting equation?
Answer
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Assets are not affected, liabilities are increased, and shareholders’ equity is decreased.
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Assets are not affected, liabilities are increased, and shareholders’ equity is increased.
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Assets are decreased, liabilities are increased, and shareholders’ equity is decreased.
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. Assets are decreased, liabilities are not affected, and shareholders’ equity is decreased.
Question 9
Question
On April 1, 20X7, Royal Insurance Company sold a one-year insurance policy covering
the year ended April 1, 20X8. Royal collected the full $3,200 on April 1, 20X7. Royal made the
following journal entry to record the receipt of cash in advance:
Nine months have passed, and Royal has made no adjusting entries. Based on these facts, the
adjusting entry needed by Royal at December 31, 20X7, is:
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Q3 53 (binary/octet-stream)
Answer
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a
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b
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c
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d
Question 10
Question
The Unearned Revenue account of Genius Incorporated began 20X6 with a normal balance of $3,000 and ended 20X6 with a normal balance of $18,000. During 20X6, the Unearned
Revenue account was credited for $27,000 that Genius will earn later. Based on these facts, how
much revenue did Genius earn in 20X6?
Answer
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$6,000
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$12,000
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. $15,000
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$27,000
Question 11
Question
What is the effect on the financial statements of recording depreciation on equipment?
Answer
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Assets are decreased, but net income and shareholders’ equity are not affected.
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Net income and assets are decreased, but shareholders’ equity is not affected.
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Net income is not affected, but assets and shareholders’ equity are decreased.
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. Net income, assets, and shareholders’ equity are all decreased.
Question 12
Question
For 20X6, Martin Company had revenues in excess of expenses. Which statement describes Martin’s closing entries at the end of 20X6?
Answer
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a. Revenues will be debited, expenses will be credited, and retained earnings will be debited.
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Revenues will be credited, expenses will be debited, and retained earnings will be debited.
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Revenues will be debited, expenses will be credited, and retained earnings will be credited.
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Revenues will be credited, expenses will be debited, and retained earnings will be credited.
Question 13
Question
Which of the following accounts would not be included in the closing entries?
Answer
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Accumulated Depreciation
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Depreciation Expense
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Service Revenue
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. Retained Earnings
Question 14
Question
A major purpose of preparing closing entries is to
Answer
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. update the Retained Earnings account.
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. adjust the asset accounts to their correct current balances.
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close out the Supplies account
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zero out the liability accounts.
Question 15
Question
Unadjusted net income equals $7,800. Calculate net income after the following adjustments: Salaries payable to employees, $680; Interest due on note payable at the bank, $120;
Unearned revenue that has been earned, $940; Supplies used, $360
Answer
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$8,020
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$7,800
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$7,580
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. $7,820
Question 16
Question
Salary Payable at the beginning of the month totals $27,000. During the month, salaries
of $132,000 were accrued as expense. If ending Salary Payable is $18,000, what amount of
cash did the company pay for salaries during the month?
Answer
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$123,000
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$132,000
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$141,000
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$159,000
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