In Class Midterm Flashcards
Valance Company purchased a 2-year insurance policy on April 1, 2010 and debited Prepaid Insurance for $3600.
$3600/24= $150 per month
Insurance Expense $150
Prepaid Insurance $150
On April 1, 2010 a tenant in an apartment building owned by the Valance Company paid $4500, which represents three months’ rent in advance. The amount revised was credited to the Unearned Rent account.
$4500/3 = $1500
Unearned Rent $1500
Rent Revenue $1500
On June 1, 2010 the balance in the Office Supplies account was $130. During June, office supplies costing $750 were purchased. A physical count of office supplies at June 30 revealed that there was $150 still on hand.
Office Supplies
---------------------
Debit I Credit
$130 I
$750 I
I $730
--------
$150
Supplies Expense $730
Supplies $730
On March 31, 2010, the Valance Company purchased a delivery van for $30,000. It is estimated that the annual depreciation will be $7,500.
$7500 / 12 = $625 per month
Depreciation Expense $625
Accumulated Depreciation $625
Valance Company has two office employees who earn $100 and $125 per day, respectively. They are paid each Friday for a five-day work week that begins each Monday. June 30 is a Wednesday in 2010.
$225 @ 3Days = $675
Salaries Expense $675
Salaries $675
The retained Earnings account had a beginning balance of $60,000 and an ending balance of $70,000. If $20,000of dividends were declared and paid during the period, net income must have
a. $20,000
b. $30,000
c. $10,000
d. $50,000
Credit I Debit
I $60,000 Beginning
$20,000 I
I - $30,000-
I\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_
$70,000The accumulated Depreciation account is an(a)
a. contra asset
b. liability
c. asset
d. operating expense
A
The procedure of transferring journal entries to ledger accounts is called
a. journalizing
b. ledgering
c. recording
d. posting
D
Transactions are initially recorded in the
a. ledger
b. trial balance
c. journal
d. balance sheet
C
A credit will reduce _____________, but increase _____________.
a. accounts receivable; accounts payable
b. expenses; accounts receivable
c. accounts payable; common stock
d. common stock; prepaid insurance
A
An accrued expense account represents expenses that have
a. that have been used and paid
b. been paid but not used
c. not been used or paid
d. been used but not paid
D
The book value of a depreciable asset is defined as the asset’s
a. cost less accumulated depreciation
b. current market value
c. replacement cost
d. cost
A
A business pays weekly salaries of $15,000 on Friday for a five-day week ending on that day. The adjusting entry necessary at the end of the fiscal period ending on Thursday is:
a. Debit Salaries Payable, $12,000; credit cash $12,000
b. Debit Salaries Expense, $12,000; credit cash $12,000
c. Debit Salaries Expense, $12,000; credit accounts payable $12,000
d. Debit Salaries Expense, $12,000; credit Salaries Payable $12,000
D
. What a customer returns goods for credit, the seller should
a. Credit Accounts Receivable
b. Credit Accounts Payable
c. Debit accounts Receivable
d. Credit Merchandise Inventory
A
Credit terms of 3/10, n/30 means that a(n)
a. 10% cash discount may be taken if payment is made immediately; a 3% discount if paid
b. 3% cash discount may be taken if payment is made within 10 days of the invoice date; otherwise the full amount is due within 30 days.
c. 3% cash discount may be taken if payment is made within 10 days of the invoice data; otherwise the full amount is due at the end of the month.
d. Additional amount equal to 3% of the invoice price must be paid if payment is not received within 10 days; the account is overdue after 30 days.
B
