Choose the best answer

1			Which of the following is a length of time for which interim financial reports are usually prepared?
			A)	One month
			B)	Three months
			C)	Six months
			D)	One year
			E)	A, B and C
2			Which of the following is a type of adjusting journal entry?
			A)	Prepaid (Deferred) expenses.
			B)	Unearned (Deferred) revenues.
			C)	Accrued revenues.
			D)	Accrued expenses.
			E)	All of the above
3			At the beginning of the year, a business had a two-year, $2,400 insurance policy on its office equipment. On July 1, it purchased a three-year, $3,600 policy on a newly constructed building. Which of the following will be the December 31, year-end, adjusting entry?
			A)	Insurance Expense, debit, $6,000; Prepaid Insurance, credit, $6,000
			B)	Insurance Expense, debit, $2,400; Prepaid Insurance, credit, $2,400
			C)	Insurance Expense, debit, $2,100; Prepaid Insurance, credit, $2,100
			D)	Insurance Expense, debit, $1,800; Prepaid Insurance, credit, $1,800
			E)	None of the journal entries in this group
4			At the end of the accounting period, the business had $4,500 of office supplies on hand. At the beginning of the period, the amount of supplies on hand was $3,000. If the business purchased $12,000 of office supplies during the year, what amount of office supplies were used during the year?
			A)	$16,500
			B)	$14,250
			C)	$10,500
			D)	$ 9,750
			E)	None of the above
5			At the end of the fiscal year, an adjusting entry was made for accrued salaries of $1,500. The salaries for one week, $3,750, were paid on the first Friday of the new fiscal period. Which of the following is the entry to record paying the salaries expense for the week?
			A)	Salaries Expense, debit, $3,750; Cash, credit, $3,750
			B)	Salary Exp., debit, $1,500; Salaries Payable, debit, $2,250; Cash, credit, $3,750
			C)	Salaries Expense, debit, $3,750; Salaries Payable, credit, $3,750
			D)	Salary Exp., debit, $2,250; Salaries Payable, debit, $1,500; Cash, credit, $3,750
			E)	None of the journal entries shown above
6			You have agreed to keep the accounting records for a business that has agreed to pay you $650 per month, beginning December 16. You use the accrual basis of accounting and recorded adjusting entries on December 31. When you receive your payment of $650 on January 16, you will record which of the following entries on the records of your company?
			A)	Cash, debit, $325; Accounts Receivable, credit, $325
			B)	Cash, debit, $650; Accounts Receivable, credit, $325; Fees Earned, credit, $325
			C)	Cash, debit, $650; Fees Earned, credit, $650
			D)	Accounts Receivable, debit, $650; Cash, credit, $325; Fees Earned, credit, $325
			E)	None of the above
7			A firm forgets to adjust it accounts for wages that have been earned but not yet paid. Which type of adjustment should they have made?
			A)	Accrued revenue
			B)	Accrued expense
			C)	Prepaid (deferred) expense
			D)	Unearned (deferred) revenue
			E)	None of the above.
8			A tenant rented space in your company's office building on November 1 at $1,800 per month, paying six months' rent in advance. The bookkeeper recognized a current liability of $10,800. The December 31, year-end adjusting entry would be which of the following?
			A)	Unearned Rent, debit, $7,200; Rent Revenue, credit, $7,200
			B)	Rent Revenue, debit, $3,600; Unearned Rent, credit, $3,600
			C)	Unearned Rent, debit, $3,600; Rent Revenue, credit, $3,600
			D)	Cash, debit, $10,800; Rent Rev., Credit., $7,200; Unearned Rent, credit, $3,600
			E)	None of the above
9			Cash $15,000 Accounts Payable $15,000 Accounts Receivable 35,000 Notes Payable 25,000 Supplies 4,000 Mortgage Payable 85,000 Prepaid Insurance 3,000 Capital, Mary Ling 195,000 Other Prepaids 1,000 Withdrawals, Mary Ling 22,000 Equipment 65,000 Revenues 190,000 Buildings 140,000 Salaries Expense 73,000 Land 40,000 Rent Expense 65,000 Patents 10,000 Utilities Expense 37,000 Assuming all of the accounts have normal balances, what is the total of the trial balance?
			A)	$532,000
			B)	$508,000
			C)	$488,000
			D)	$510,000
			E)	Does not balance
10			The notion that the life of a business is divisible into time periods of equal length is known as which of the following?
			A)	Continuing-concern principle
			B)	Monetary unit principle
			C)	Recognition principle
			D)	Time-period principle
			E)	Business entity principle
11			An NBA basketball team sells season tickets worth $40 million before the basketball season starts late in the year. Assume this $40 million is debited to Cash and credited to Unearned Ticket Revenue. By the end of the year, 15% of the games have been played. What adjusting journal entry should be made at the end of the year?
			A)	Unearned Ticket Revenue, debit, $6 million; Cash, credit, $6 million
			B)	Ticket Revenue, debit, $6 million; Unearned Ticket Revenue, credit, $6 million
			C)	Unearned Ticket Revenue, debit, $6 million; Ticket Revenue, credit, $6 million
			D)	Ticket Revenue, debit, $6 million; Cash, credit, $6 million
			E)	None of the above
12			A business rented space in an office building on October 1, at $600 per month, paying 9 months of rent in advance. The bookkeeper recognized a prepaid asset of $5,400 when the payment was made. No year-end adjustment was recorded. As a consequence of overlooking the required adjustment, which of following occurred?
			A)	Expenses were overstated and assets were understated
			B)	Expenses were understated and assets were overstated
			C)	Expenses were overstated and assets were overstated
			D)	Expenses were understated and assets were understated
			E)	None of the above
13			At the beginning of the year, a business had a two-year, $12,000 insurance policy on its office equipment. On July 1 it purchased a three-year, $18,000 policy on a newly constructed building. A December 31, year-end, an adjusting entry was made for the policy on the building but not for the policy on the office equipment. As a consequence of the oversight, which of the following occurred?
			A)	Expenses are overstated and assets are overstated
			B)	Expenses are understated and assets are understated
			C)	Expenses are overstated and assets are understated
			D)	Expenses are understated and assets are overstated
			E)	None of the above will occur
14			Dee Hellings, Inc. performed $3,000 worth of services for a client during December but did not get paid until the first week of February of the next year. No year-end adjusting entry was recorded on December 31. As a consequence of this oversight, which of the following occurred?
			A)	Assets were understated and revenue was understated
			B)	Assets were overstated and revenue was understated
			C)	Assets were understated and revenue was overstated
			D)	Assets were overstated and revenue was overstated
			E)	Liabilities were understated and revenue was understated
15			Only the credit portion of an adjusting entry to record $750 of expired insurance was posted. The trial balance will reflect which of the following? Amount out of balance Column with larger total
			A)	$1,500 debit
			B)	$1,500 credit
			C)	$750 debit
			D)	$750 credit
			E)	$ 00 neither
16			Revenues for the period total $480,000 and expenses for the period total $360,000. What will be the profit margin for the business operations?
			A)	25 percent
			B)	400 percent
			C)	$120,000
			D)	$840,000
			E)	A and C
17			Which year shows the best profit margin for the business? Year Profit Margin
			A)	1999 12.45%
			B)	2000 14.25%
			C)	2001 15.35%
			D)	2002 10.80%
			E)	2003 13.71%