AC 210 Intro To Accounting Chapter 4 Quiz Answers (UA)
1. At the beginning of December, Johnson Corporation had $1,200 in supplies on hand. During the month, supplies purchased amounted to $2,200, but by the end of the month the supplies balance was only $1,600. What is the appropriate month-end adjusting entry?
a. Debit Cash $1,800, credit Supplies $1,800
b. Debit Cash $1,600, credit Supplies $1,600
c. Debit Supplies $1,800, credit Supplies Expense $1,800
d. Debit Supplies Expense $1,600, credit Supplies $1,600.
e. Debit Supplies Expense $1,800, credit Supplies $1,800
2. The adjusting entry to record interest owed on obligations at the end of the accounting period includes a debit to:
a. Interest Expense and credit to Interest Payable
b. Interest Payable and credit to Interest Expense
c. Interest Receivable and credit to Interest Receivable
d. Interest Expense and credit to Notes Payable
3. On December 16, 2015, C. Tucker Company received $4,200 from H. Lee Company for rent of an office owned by C. Tucker Company. The payment covers the period from December 16, 2015 through February 15, 2016. C. Tucker Company recorded this as Unearned Rent when it was received on December 16. The adjusting entry on December 31 would include a:
a. credit to unearned rent revenue of $1,050.
b. credit to rent revenue of $1,050.
c. debit to rent revenue of $2,100.
d. debit to unearned rent revenue of $2,100.
4. If an expense has been incurred but will be paid later, then:
a. nothing is recorded on the financial statements.
b. an asset account is decreased or eliminated and an expense is recorded.
c. a revenue and an expense are accrued.
d. a liability account is created or increased and an expense is recorded.
5. The balance in the Prepaid Insurance account after the adjusting entries have been recorded represents the:
a. cost of the insurance expired during the period
b. value of the insurance prepayment that remains to benefit future periods
c. amount owed for insurance at the end of the accounting period
d. cash paid for insurance of current and future periods
6. On December 31, the Chambers Cafe paid $78,000 for a full year of rent beginning on January 1. The rent payment was appropriately recorded in the Cash and Prepaid Rent accounts. If financial statements are prepared on January 31, the journal entry to record the adjustment would be:
a. Debit Rent expense and credit prepaid rent for $78,000.
b. Debit prepaid rent and credit rent expense for $78,000.
c. Debit Rent expense and credit prepaid rent for $6,500.
d. Debit prepaid rent and credit rent expense for $6,500.
7. On July 1, 2015, Fred Co. paid $18,000 to Lease-A-Space for rent covering 18 months from July 2015 through December 2016. Fred makes adjustments on a monthly basis. The adjusting entry needed at December 31, 2015 by Fred Co. will:
a. Decrease assets and decrease liabilities.
b. Increase assets and decrease equity.
c. Increase liabilities and decrease equity.
d. Decrease liabilities and increase equity.
e. Decrease assets and decrease equity.
8. What are the effects on the accounting equation from the adjusting entry for salaries and wages incurred, but not yet paid, during the accounting period?
a. Total liabilities will increase and total stockholders' equity will increase.
b. Total liabilities will increase and total stockholders' equity will decrease.
c. Total liabilities will decrease and total stockholders' equity will increase.
d. Total liabilities will decrease and total stockholders' equity will decrease.