Chapter 2 Flashcards
The basic summary device of business transactions is the A: Journal B: Ledger C: Trial Balance D: Account
D
If the debit amount of an entry to record the purchases of supplies on account was not posted A:Assets would be understated B: Assets would be overstated C: Lisbilities would be understated DLi would be overstated
A
Prepaid insurance is recorded on the balance sheet as A: Expense B: liability C: Asset D: Contra Asset
C
On 1st of August of the current year, company A received 5400 for legal services to be performed evenly throughout the next six months. The adjusting entry on December 31 of the current year would include
A: Credit to unearned service revenue of 4500
B: Debit to unearned service revenue of 900
C: Debit to service revenue of 900€
D: Credit to service revenue of 4500
D 5400/6 =900 900x5 =4500
Company paid nine months rent in advance for an amount of 6300. At the end of the first months, the adjusting entry for rent would include a A: Debit to rent expense for 700 B: debit to prepaid rent for 700 C: Credit to prepaid rent for 5600 D: Credit to unearned rent for 6300
A
On dec 31,2016 salaries owed to employees total was 4150. These will be paid on January 4,2017. The adjusting entry prepared on December 31 includes A: Debit to salary expense B: Debit to salary payable C: Credit to cash 4150 D: Credit to salary expense
A
A tired accountant failed to record the adjusting entry to accrue the salary expenses on 31. December 2016. How does this affect the financial statement?
A: The asset for the period will be understated
B: The net income will be understated
C: the liabilities for the period will be underrated
D: thet income will not be affected
C
At the end of the year a company makes a journal entry to accrue the interest expense on a short term note payable. As a result of this transaction
A: Current liabilities increase and current assets decrease
B: Current liabilities increase and equity increases
C: Current liabilities increase and equity decreases
D: Current liabilities decrease and equity decreases
C
Double entry accounting means that each transaction
A: increases at least one account and decreases at least one account
B: debits at least one account and decreases at least on account
C: is recorded on both journal and general ledger
D: Affects both an income statement account and a balance sheet account
B
The entry record 1000 cash received from a customer for services that were performed in the previous accounting period is
A Debit acc receivable , Credit cash
B Debit service revenue 1.000 Credit A.R 1000
C Debit Cash 1000, Credit A.R
D Cash 1000, Credit Service revenues 1000
C
In 1 November 2016 prepaid rent was debited for 5400 for three months of rent paid in advance. The adjusting entry that is recorded on 31. dec 2016 includes A: Debit to cash B: Credit to prepaid rent C: Credit to rent expense D: Debit to prepaid rent
B
The entry to record the payment of salaries to employees would include a A: Credit to salary Expense B: Debit to accounts payable C: Debit to Salary expense D: Credit to Accounts receivable
C
