31) The adjustment for unearned rent revenue is recorded when:

A) cash is received.

B) rent is earned.

C) revenue is received.

D) closing entries are prepared.

32) Accumulated Depreciation – Buildings should be shown on the:

A) income statement.

B) post-closing trial-balance.

C) statement of owner’s equity.

D) The account does not appear on a financial statement since it is a temporary account.

33) An account never used in an adjusting entry is:

A) Consulting Fees-Revenue.

B) Interest Payable.

C) Equipment.

D) Accumulated Depreciation – Equipment.

34) On November 1, Phone Center received $4,800 for two years’ rent in advance from Garrison Company. The November 30 adjusting entry that Phone Center should make is to:

A) debit Rental Income; credit Unearned Rent $3,000.

B) debit Cash; credit Rental Income $3,000.

C) debit Unearned Rent; credit Rental Income $200.

D) debit Unearned Rent; credit Rent Expense $200.

35) Doug paid $1,200 on a one-year insurance policy on March 1. The entry included a debit to Prepaid Insurance. The adjusting entry on December 31 would include a:

A) debit to Prepaid Insurance for $1,000; and a credit to Cash for $1,000.

B) debit to Insurance Expense for $1,000; and a credit to Prepaid Insurance for $1,000.

C) debit to Insurance Expense for $1,200; and a credit to Prepaid Insurance for $1,200.

D) debit to Cash for $1,200; and a credit to Prepaid Insurance for $1,200.

36) Max Realty paid $3,000 rent on a building in advance for two years on May 1. The amount that should be recorded as rent expense as of December 31 is:

A) $1,000.

B) $3,000.

C) $1,500.

D) $875.

37) The adjustment for salaries is necessary:

A) because the employer did not have enough cash to write the paychecks.

B) to recognize the revenue in the period earned.

C) to recognize the expense in the period incurred.

D) only in the month of a holiday.

38) When the adjustment for depreciation is made:

A) total assets decrease.

B) total expenses decrease.

C) total liabilities increase.

D) None of the answers are correct.

39) The goods a company has available to sell to customers are called:

A) Supplies.

B) Sales.

C) Cost of Goods Sold.

D) Merchandise Inventory.

40) The adjustment for accrued wages was NOT done; this would cause:

A) liabilities to be overstated.

B) liabilities to be understated.

C) capital to be understated.

D) net income to be understated.

 

 



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