1) Roy purchased a one-year insurance policy for $2,400. The adjusting entry for one month would include a:
A) debit to Prepaid Insurance, $200.
B) credit to Cash, $200.
C) debit to Insurance Expense, $200.
D) None of these answers are correct.
2) The capital balance amount shown in the balance sheet column of the worksheet represents:
A) beginning capital plus net income.
B) beginning capital plus investments to capital.
C) beginning capital less withdrawals.
D) beginning capital plus net income less withdrawal.
3) When counting the supplies a fi le cabinet was forgotten and the adjustment was made based on the incorrect count. This would:
A) overstate the period's net income.
B) overstate the end of period assets.
C) understate the end of period assets.
D) None of these are correct.
4) The adjustment for accrued wages included the entire pay period, some of which occurs next month. This would:
A) understate the end of period liabilities.
B) overstate the period's net income.
C) overstate the end of period liabilities.
D) None of these are correct.
5) The purchase of equipment will require an adjustment of:
A) increasing the total assets and increasing the total expenses at the end of the month.
B) decreasing the total assets and decreasing the total expenses at the end of the month.
C) decreasing the total assets and increasing the total expenses at the end of the month.
D) none of the above.