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102)
The total amount of depreciation recorded against an asset over the entire time the asset has been
owned:
A)
Is referred to as accumulated depreciation.
B)
Is referred to as an accrued asset.
C)
Is only recorded when the asset is disposed of.
D)
Is referred to as depreciation expense.
E)
Is shown on the income statement of the final period.
103)
The periodic expense created by allocating the cost of plant and equipment to the periods in which
they are used, representing the expense of using the assets, is called:
A)
Accumulated depreciation.
B)
An accrued account.
C)
A contra account.
D)
Depreciation expense.
E)
The expense recognition (matching) principle.
104)
Prior to recording adjusting entries, the Office Supplies account had a $359 debit balance. A
physical count of the supplies showed $105 of unused supplies available. The required adjusting
entry is:
A)
Debit Office Supplies $254 and credit Office Supplies Expense $254.
B)
Debit Office Supplies $105 and credit Supplies Expense $254.
C)
Debit Office Supplies $105 and credit Office Supplies Expense $105.
D)
Debit Office Supplies Expense $254 and credit Office Supplies $254.
E)
Debit Office Supplies Expense $105 and credit Office Supplies $105.
105)
If throughout an accounting period the fees for legal services paid in advance by clients are
recorded in an account called Unearned Legal Fees, the end-of-period adjusting entry to record the
portion of those fees that has been earned is:
A)
Debit Legal Fees Earned and credit Unearned Legal Fees.
B)
Debit Unearned Legal Fees and credit Accounts Receivable.
C)
Debit Cash and credit Legal Fees Earned.
D)
Debit Cash and credit Unearned Legal Fees.
E)
Debit Unearned Legal Fees and credit Legal Fees Earned.
106)
On April 1, a company paid the $1,350 premium on a three-year insurance policy with benefits
beginning on that date. What amount of the insurance expense will be reported on the annual
income statement for the year ended December 31?
A) $1,350.00. B) $337.50. C) $37.50. D) $1,012.50. E) $450.00.
107)
On July 1, a company paid the $2,400 premium on a one-year insurance policy with benefits
beginning on that date. What will be the insurance expense on the annual income statement for the
first year ended December 31?
A) $2,400. B) $1,200. C) $400. D) $1,400. E) $1,000.
B) $75.
C) $325.
D) $125.
E) $250.
108)
A company had no office supplies available at the beginning of the year. During the year, the
company purchased $250 worth of office supplies. On December 31, $75 worth of office supplies
remained. How much should the company report as office supplies expense for the year?
A) $175.
109)
On January 1, a company purchased a five-year insurance policy for $1,800 with coverage starting
immediately. If the purchase was recorded in the Prepaid Insurance account, and the company
records adjustments only at year-end, the adjusting entry at the end of the first year is:
A)
Debit Prepaid Insurance, $360; credit Insurance Expense, $360.
B)
Debit Prepaid Insurance, $1,800; credit Cash, $1,800.
C)
Debit Insurance Expense, $360; credit Prepaid Insurance, $360.
D)
Debit Insurance Expense, $360; credit Prepaid Insurance, $1,440.
E)
Debit Prepaid Insurance, $1,440; credit Insurance Expense, $1,440.
110)
Unearned revenue is reported in the financial statements as:
A)
A liability on the balance sheet.
B)
A financing activity on the statement of cash flows.
C)
A revenue on the balance sheet.
D)
An asset on the balance sheet.
E)
An unearned revenue on the income statement.
111)
Which of the following assets is not depreciated?
A)
Land.
B)
Buildings.
C)
Equipment.
D)
Store fixtures.
E)
Computers.
112)
Which of the following does not require an adjusting entry at year-end?
A)
Cash invested by owner.
B)
Expired portion of prepaid insurance.
C)
Accrued interest on notes payable.
D)
Accrued wages.
E)
Supplies used during the period.
113)
On May 1, a two-year insurance policy was purchased for $18,000 with coverage to begin
immediately. What is the amount of insurance expense that would appear on the company's income
statement for the first year ended December 31?
A) $5,270. B) $6,750. C) $750. D) $6,000. E) $18,000.
114)
Fragmental Co. leased a portion of its store to another company for eight months beginning on
October 1, at a monthly rate of $800. Fragmental collected the entire $6,400 cash on October 1 and
recorded it as unearned revenue. Assuming adjusting entries are only made at year-end, the
adjusting entry made by Fragmental Co. on December 31 would be:
A)
A debit to Rent Revenue and a credit to Cash for $2,400.
B)
A debit to Rent Revenue and a credit to Unearned Rent for $2,400.
C)
A debit to Unearned Rent and a credit to Rent Revenue for $4,000.
D)
A debit to Unearned Rent and a credit to Rent Revenue for $2,400.
E)
A debit to Cash and a credit to Rent Revenue for $6,400.
115)
On May 1, Sellers Marketing Company received $1,500 from Franco Marcelli for a marketing
campaign effective from May 1 this year to April 30 of the following year. The Cash receipt was
recorded as unearned fees and at year-end on December 31, $1,000 of the fees had been earned.
Assuming adjustments are only made at year-end, the adjusting entry on December 31 would be:
A)
A debit to Fees Earned and a credit to Cash for $1,000.
B)
A debit to Unearned Fees and a credit to Cash for $500.
C)
A debit to Unearned Fees and a credit to Fees Earned for $1,000.
D)
A debit to Fees Earned and a credit to Cash for $500.
E)
A debit to Fees Earned and a credit to Unearned Fees for $500.
116)
Incurred but unpaid expenses that are recorded during the adjusting process with a debit to an
expense and a credit to a liability are:
A)
Net expenses.
B)
Accrued expenses.
C)
Prepaid expenses.
D)
Intangible expenses.
E)
Unearned expenses.
117)
The adjusting entry at the end of an accounting period to record the unpaid salaries of employees
for work provided is:
A)
Debit Salaries Payable and credit Salaries Expense.
B)
Debit Unpaid Salaries and credit Salaries Payable.
C)
Debit Cash and credit Salaries Expense.
D)
Debit Salaries Expense and credit Salaries Payable.
E)
Debit Salaries Expense and credit Cash.
118)
A company pays each of its two office employees each Friday at the rate of $100 per day for a
five-day week that begins on Monday. If the monthly accounting period ends on Tuesday and the
employees worked on both Monday and Tuesday, the month-end adjusting entry to record the
salaries earned but unpaid is:
A)
Debit Unpaid Salaries $600 and credit Salaries Payable $600.
B)
Debit Salaries Expense $400 and credit Cash $400.
C)
Debit Salaries Payable $400 and credit Salaries Expense $400.
D)
Debit Salaries Expense $600 and credit Salaries Payable $600.
E)
Debit Salaries Expense $400 and credit Salaries Payable $400.
119)
A company pays its employees $4,000 each Friday, which amounts to $800 per day for the five-day
workweek that begins on Monday. If the monthly accounting period ends on Thursday and the
employees worked through Thursday, the amount of salaries earned but unpaid at the end of the
accounting period is:
A) $800. B) $4,000. C) $2,400. D) $3,200. E) $1,600.
120)
The adjusting entry to record the salaries earned due to employees for services provided but unpaid
at the end of the accounting period affects the accounts in which of the following ways?
A)
Debit Salaries Expense and credit Salaries Payable.
B)
Debit Salaries Payable and credit Salaries Expense.
C)
Debit Cash and credit Salaries Expense.
D)
Debit Accrued Salaries and credit Salaries Payable.
E)
Debit Salaries Expense and credit Cash.
121)
On January 1, Eastern College received $1,200,000 from its students for the spring semester that it
recorded in Unearned Tuition and Fees. The term spans four months beginning on January 2 and
the college spreads the revenue evenly over the months of the term. Assuming the college prepares
adjustments monthly, what amount of tuition revenue should the college recognize on February
28?
A) $300,000.
B) $600,000.
C) $1,200,000.
D) $800,000.
E) $900,000.
51
122)
On January 1, Fashion Forward Magazine received $15,000 from subscribers for the annual
subscriptions that it recorded in Unearned Subscription Revenue. The issues of the magazine are
mailed to subscribers quarterly. What amount of subscription revenue should the magazine
recognize on March 31 when the first issue is sent in March?
A) $1,250. B) $3,750. C) $15,000. D) $7,500. E) $0.
123)
An adjusting entry was made on year-end December 31 to accrue salary expense of $1,200.
Assuming the company does not prepare reversing entries, which of the following entries would be
prepared to record the $3,000 payment of salaries in January of the following year?
A)
Salaries Payable
1,200
Salaries Expense
1,200
B)
Salaries Payable
1,200
Cash
1,200
C)
Salaries Payable
1,200
Salaries Expense
1,800
Cash
3,000
D)
Salaries Expense
3,000
Cash
3,000
E)
Salaries Payable
3,000
Cash
3,000
124)
The difference between the cost of an asset and the accumulated depreciation for that asset is called
A)
Prepaid Depreciation.
B)
Unearned Depreciation.
C)
Book Value.
D)
Depreciation Expense.
E)
Depreciation Value.
125)
A company purchased a new delivery van at a cost of $45,000 on July 1. The delivery van is
estimated to have a useful life of 6 years and a salvage value of $3,000. The company uses the
straight-line method of depreciation. How much depreciation expense will be recorded for the van
during the first year ended December 31?
A) $4,000. B) $7,000. C) $3,500. D) $3,250. E) $6,500.
126)
A company's Office Supplies account shows a beginning balance of $600 and an ending balance of
$400. If office supplies expense for the year is $3,100, what amount of office supplies was
purchased during the period?
A) $3,700. B) $2,700. C) $2,900. D) $3,300. E) $3,500.
55
127)
If a company records prepayment of expenses in an asset account, the adjusting entry when all or
part of the prepaid asset is used or expired would:
A)
Result in a debit to a liability and a credit to an asset account.
B)
Decrease cash.
C)
Result in a debit to an expense and a credit to an asset account.
D)
Cause an accrued liability account to exist.
E)
Cause an adjustment to prior expense to be overstated and assets to be understated.
128)
A company recorded 2 days of accrued salaries of $1,400 for its employees on January 31. On
February 9, it paid its employees $7,000 for these accrued salaries and for other salaries earned
through February 9. Assuming the company does not prepare reversing entries, the January 31 and
February 9 journal entries are:
A) 1/31
Salaries Expense………………………….
Salaries Payable……………………...
1,400
1,400
2/9
Salaries Expense…………………………..
Cash…………………………………...
7,000
7,000
B) 1/31
Salaries Payable …………………………..
1,400
Salaries Expense……………………...
1,400
2/9
Salaries Expense…………………………..
5,600
Salaries Payable…………………………
1,400
Cash…………………………………...
7,000
C) 1/31
Salaries Expense…………………………..
1,400
Cash…………………………………..
1,400
2/9
Salaries Expense………………………….
7,000
Cash………………………………….
7,000
D) 1/31
Salaries Expense …………………………
Salaries Payable …………................
1,400
1,400
2/9
Salaries Payable ………………………….
7,000
Salaries Expense …………………………
Cash..…………………………………
1,400
7,000
E) 1/31
Salaries Expense………………………….
1,400
Salaries Payable………………………
1,400
2/9
Salaries Expense…………………………..
5,600
Salaries Payable…………………………...
1,400
Cash…………………………………...
7,000
129)
If accrued salaries were recorded on December 31 with a debit to Salaries Expense and a credit to
Salaries Payable, and no reversing entries were made on January 1, the entry to record payment of
these wages on the following January 5 would include:
A)
A debit to Cash and a credit to Salaries Payable.
B)
A debit to Cash and a credit to Prepaid Salaries.
C)
A debit to Salaries Payable and a credit to Salaries Expense.
D)
A debit to Salaries Payable and a credit to Cash.
E)
No entry would be necessary on January 5.
130)
On December 1, Simpson Marketing Company received $3,600 from a customer for a 2-month
marketing plan to be completed January 31 of the following year. The cash receipt was recorded as
unearned fees. The adjusting entry for the year ended December 31 would include:
A)
a credit to Unearned Fees for $1,800.
B)
a debit to Earned Fees for $3,600.
C)
a debit to Earned Fees for $1,800.
D)
a credit to Earned Fees for $3,600.
E)
a debit to Unearned Fees for $1,800.
131)
Wilson Company paid $4,800 for a 4-month insurance premium in advance on November 1, with
coverage beginning on that date. The balance in the prepaid insurance account before adjustment at
the end of the year is $4,800 and no adjustments had been made previously. The adjusting entry
required on December 31 is:
A)
Debit Insurance Expense, $2,400; credit Prepaid Insurance, $2,400.
B)
Debit Prepaid Insurance, $2,400; credit Insurance Expense, $2,400.
C)
Debit Prepaid Insurance, $1,200; credit Insurance Expense, $1,200.
D)
Debit Cash, $4,800; Credit Prepaid Insurance, $4,800.
E)
Debit Insurance Expense, $1,200; credit Prepaid Insurance, $1,200.
132)
What is the proper adjusting entry at December 31, the end of the accounting period, if the balance
in the prepaid insurance account is $7,750 before adjustment, and the unexpired amount per
analysis of policies is, $3,250?
A)
Debit Insurance Expense, $3,250; credit Prepaid Insurance, $3,250.
B)
Debit Insurance Expense, $4,500; credit Prepaid Insurance, $4,500.
C)
Debit Insurance Expense, $7,750; credit Prepaid Insurance, $7,750.
D)
Debit Cash, $7,750; Credit Prepaid Insurance, $7,750.
E)
Debit Prepaid Insurance, $4,500; credit Insurance Expense, $4,500.
133)
On April 1, Griffith Publishing Company received $1,548 from Santa Fe, Inc. for 36-month
subscriptions to several different magazines. The subscriptions started immediately. What is the
amount of revenue that should be recorded by Griffith Publishing Company for the first year of the
subscription assuming the company uses a calendar-year reporting period?
A) $387. B) $430. C) $516. D) $129. E) $0.
134)
On April 1, Griffith Publishing Company received $1,548 from Santa Fe, Inc. for 36-month
subscriptions to several different magazines. The subscriptions started immediately. What is the
amount of revenue that should be recorded by Griffith Publishing Company for the second year of
the subscription assuming the company uses a calendar-year reporting period?
A) $129. B) $430. C) $516. D) $387. E) $0.
