Problem 1. In the case of a prepaid expense, the adjusting entry required at the end of a period consists of a credit to Prepaid expense.
True
False
Problem 2. The entry to record depreciation includes a debit to which account?
Equipment
Cash
Accumulated depreciation
Depreciation expense
Problem 3. Which of the following statements is TRUE about the worksheet?
Net income is recorded in the income statement credit column.
Net income is recorded in the adjusted trial balance debit column.
Net income is recorded in the income statement debit column.
Net income is recorded in the balance sheet debit column.
Problem 4. If an adjusting entry includes a debit to Rent expense, that would indicate that the payment of rent had been previously recorded as a(n) ______ entry.
prepaid expense
depreciation
accrued expense
accrued revenue
Problem 5. At the end of the current year, the accountant for Navistar Graphics forgot to make an adjusting entry to accrue Wages payable to the company's employees for the last week in December. The wages will be paid to the employees in January. Which of the following is one of the effects of this error?
Net income is overstated.
Liabilities are overstated.
Net income is understated.
Expenses are overstated.