Accounting One Quiz Four Essay

Accounting One Quiz FourQuestion 1(5 points) SaveThe cost of a plant asset less its accumulated depreciation is referred to as book valueTruesub sectionQuestion 2(5 points) SaveUnearned revenue shows a beginning balance of $4,700 and an ending balance of $3,400. An adjusting entry was made crediting service revenues for $10,200. How much cash was received during the accounting period as unearned revenue? Hint: T-accounts make this easier.$8,900sub sectionQuestion 3(5 points) SaveA prepaid expense recorded initially as an expense is adjusted by debiting the asset accountFalsesub sectionQuestion 4(5 points) SaveOn October 31, 2000, A company paid $8,400 in advance for two years rent and debited prepaid rent for the total. The December 31, 2000 adjusting entry should include:A debit to rent expense for $700sub sectionQuestion 5(5 points) SaveOn Sept 1, the Mythical Company pays $27,000 in cash that represents a payment in advance for six months rent.

The balance in the prepaid rent account on December 31, 1999 after adjustment would be$9,000sub sectionQuestion 6(5 points) SaveMythical Company purchased equipment costing $5,000 at the beginning of 1999. Depreciation expense on the 1999 income statement amounts to $400. What is the balance in the accumulated depreciation account at the end of 1999?$400sub sectionQuestion 7(5 points) SaveWhen an expense is incurred prior to cash payment, the adjustment is referred to as a (n)Accrued expensesub sectionQuestion 8(5 points) SaveThe matching principle requires that expenses be matched with revenues that they helped earn in the appropriate periodTruesub sectionQuestion 9(5 points) SaveAn adjusting entry will always involve:An income statement account and a balance sheet accountsub sectionQuestion 10(5 points) SaveThe process of allocating the cost of a plant asset to expense is referred to as:Depreciationsub sectionQuestion 11(5 points) SaveUnearned Revenues is a _____________ accountLiabilityQuestion 12(5 points) SaveMythical Travel Company records $35,000 of unearned service revenue during the current year. The correct balance in the unearnded revenue is determined to be $18,500. The correct adjusting entry will involve a:Credit to service revenues for $16,500sub sectionQuestion 13(5 points) SaveA company accepted $6,000 on June 1 for services to be performed evenly over the next 12 months. the adjusting entry on December 31 would include a:Debit to unearned revenue for $3,500sub sectionQuestion 14(5 points) SaveAn accrual is an adjuting entry that recognizes an expense that has been incurred but not yet recordedTruesub sectionQuestion 15(5 points) SaveMthical Services Company records a payment of $500 cash for a previously accrued expense and the accrual of $825 for another expense.

The impact of these two journal entries on total expenses and net income is: (Be very careful with this one)Expenses increase by $825 Net income decreases by $825sub sectionQuestion 16(5 points) SaveThe adjusting entry to record $400 of earned revenue received in advance would include a debit to unearned revenueTrueQuestion 17(5 points) SavePrepaid insurance had a beginning balance of $4,500. At the end of the accounting period it has a balance of $1,300. Accumulated depreciation had a beginning balance of $9,500 and an ending balance of $10,300. The change in these two account balances resulte in total expenses:Increasing by $4,000sub sectionQuestion 18(5 points) SaveThe adjusting entry to record accrued salaries includes a debit toSalaries expensesub sectionQuestion 19(5 points) SaveIf an adjustment to decrease prepaid insurance is not made at year-end, net income will be:Overstatedsub sectionQuestion 20(5 points) SavePrepaid rent shows a beginning balance of $500 and an ending balance of $2,800. The rent expense account was debited during the adjustment process for $1,200. How much cash was paid for rent?$3,500Reference:Warren, C.

S.,  Reeve, J.M.

&  Duchac, J.(2008). Accounting. South-Western College Pub

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