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| 1 | |
Which of the following need not be completed separately if a worksheet is prepared? |
| | A) | a trial balance |
| | B) | an income statement |
| | C) | a balance sheet |
| | D) | a statement of owner's equity |
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| 2 | |
When a trial balance is in balance, |
| | A) | adjusting entries are not required. |
| | B) | the general ledger is free of errors. |
| | C) | the debit account balances equal the credit account balances. |
| | D) | the company has earned a net income. |
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| 3 | |
Equipment cost $36,000 and is expected to be useful for 5 years and have no salvage value. Under the straight-line method, monthly depreciation will be |
| | A) | $600. |
| | B) | $720. |
| | C) | $60. |
| | D) | $12. |
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| 4 | |
On a worksheet, the adjusting entry to account for depreciation of equipment consists of |
| | A) | a debit to Depreciation Expense and a credit to Equipment. |
| | B) | a debit to Depreciation Expense and a credit to Accumulated Depreciation. |
| | C) | a debit to Equipment and a credit to Accumulated Depreciation. |
| | D) | a debit to Accumulated Depreciation and a credit to Equipment. |
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| 5 | |
If the prepaid expenses are not adjusted, assets on the balance sheet |
| | A) | will be overstated. |
| | B) | will be understated. |
| | C) | will not be affected. |
| | D) | may be either overstated or understated. |
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| 6 | |
If long-term assets are not adjusted, expenses on the income statement |
| | A) | will be overstated. |
| | B) | will be understated. |
| | C) | will not be affected. |
| | D) | may be either overstated or understated. |
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| 7 | |
On November 25, 2004, the company paid $24,000 rent in advance for a six-month period (December 2004 through May 2005). On December 31, 2004, the adjustment for expired rent would include |
| | A) | a $4,000 debit to Prepaid Rent. |
| | B) | a $4,000 credit to Rent Expense. |
| | C) | a $24,000 debit to Rent Expense. |
| | D) | a $4,000 credit to Prepaid Rent. |
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| 8 | |
The adjusting entry to account for use of supplies consists of |
| | A) | a debit to Supplies Expense and a credit to Supplies. |
| | B) | a debit to Supplies and a credit to Supplies Expense. |
| | C) | a debit to Supplies and a credit to Accumulated Depreciation. |
| | D) | a debit to Accumulated Depreciation and a credit to Supplies. |
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| 9 | |
The adjusting entry to account for use of prepaid insurance consists of |
| | A) | a debit to Insurance Expense and a credit to Prepaid Insurance. |
| | B) | a debit to Insurance Expense and a credit to Accumulated Depreciation. |
| | C) | a debit to Prepaid Insurance and a credit to Accumulated Depreciation. |
| | D) | a debit to Accumulated Depreciation and a credit to Prepaid Insurance. |
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| 10 | |
The adjusting entry to account for use of prepaid advertising consists of |
| | A) | a debit to Prepaid Advertising and a credit to Advertising Expense. |
| | B) | a debit to Advertising Expense and a credit to Accumulated Depreciation. |
| | C) | a debit to Prepaid Advertising and a credit to Accumulated Depreciation. |
| | D) | a debit to Advertising Expense and a credit to Prepaid Advertising. |
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