Question 1. A post-closing trial balance includes:
Student Answer:
All ledger accounts with balances, none of which can be temporary accounts
All ledger accounts with balances, none of which can be permanent accounts
All ledger accounts with balances, which include some temporary and some permanent accounts
Only revenue and expense accounts
Only asset accounts
Points Received:
Question 2. If accrued salaries were recorded on December 31 with a credit to Salaries Payable, the entry to record payment of these wages on the following January 5 would include:
Student Answer:
A debit to Cash and a credit to Salaries Payable
A debit to Cash and a credit to Prepaid Salaries
A debit to Salaries Payable and a credit to Cash
A debit to Salaries Payable and a credit to Salaries Expense
No entry would be necessary on January 5
Question 3. Based on the following information, determine the current assets, assuming all accounts have a normal balance?
Cash
$ 6,754
Dividends
$ 2,000
Accounts receivable
$ 13,733
Consulting fees earned
$ 13,718
Office supplies
$ 2,625
Rent expense
$ 3,673
Land
$ 37,153
Salaries expense
$ 6,642
Office equipment
$ 14,535
Telephone expense
$ 560
Accounts payable
$ 6,463
Miscellaneous expense
$ 280
Common stock
$ 54,490
Retained Earnings
?
Student Answer:
$74,800
$37,647
$60,265
$23,112
Question 4. A company shows a $600 balance in Prepaid Insurance in the Unadjusted Trial Balance columns of the work sheet. The Adjustments columns show expired insurance of $200. This adjusting entry results in:
Student Answer:
$200 less in net income
$200 more in net income
$200 difference between the debit and credit columns of the Unadjusted Trial Balance
$200 of prepaid insurance
An error in the financial statements
Question 5. The main purpose of adjusting entries is to:
Student Answer:
Record external transactions and events
Record internal transactions and events
Recognize assets purchased during the period
Recognize debts paid during the period
Correct errors
Question 6. On April 30, 2011, a three-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 year ended December 31, 2011?
Student Answer:
$500
$4,000
$6,000
$14,000
$18,000
Question 7. 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?
Student Answer:
$2,700
$2,900
$3,300
$3,500
$3,700