Online Quiz 10 Flashcards
Which ONE of the following accounts typically has a DEBIT balance? Accounts Payable Capital Stock Sales Revenue Retained Earnings Rent Expense
Answer: Rent Expense
Which ONE of the following accounts typically has a CREDIT balance? Cash Cost of Goods Sold Sales Revenue Inventory Prepaid Rent
Answer: Sales Revenue
Which ONE of the following statements best summarizes the MATCHING PRINCIPLE?
Revenues are recognized in the same period as the related assets.
Expenses are recognized in the same period as the related revenues.
Revenues are recognized in the period in which cash is received.
Revenues are recognized in the period in which they are earned.
Expenses are recognized in the period in which they are earned.
Expenses are recognized in the period in which cash is paid.
Answer: Expenses are recognized in the same period as the related revenues.
On May 1, the company paid $2,000 in advance for 12 months of insurance, with the insurance period beginning on May 1. -- Which ONE of the following will be included in the journal entry necessary on May 1 to record this cash payment for insurance? DEBIT to PREPAID INSURANCE for $2,000 DEBIT to CASH for $2,000 DEBIT to INSURANCE EXPENSE for $2,000 CREDIT to PREPAID INSURANCE for $2,000 CREDIT to INSURANCE EXPENSE for $2,000
Answer: DEBIT to PREPAID INSURANCE for $2,000
On June 1, the company paid $1,200 in advance for 12 months of rent, with the rental period beginning on June 1. This $1,200 was recorded as Prepaid Rent. As of the end of the year, no entry has yet been made to adjust the amount initially recorded. -- Which ONE of the following will be included in the ADJUSTING ENTRY necessary on December 31? DEBIT to PREPAID RENT for $700 DEBIT to CASH for $700 DEBIT to RENT EXPENSE for $700 CREDIT to PREPAID RENT for $500 CREDIT to CASH for $500 DEBIT to RENT EXPENSE for $500
Answer: DEBIT to RENT EXPENSE for $700
On April 1, the company received $2,400 in advance for 12 months of service to be provided, with the service period beginning on April 1. This $2,400 was recorded as Unearned Service Revenue. The service is provided evenly throughout the year. As of the end of the year, no entry has yet been made to adjust the amount initially recorded. – Which ONE of the following will be included in the ADJUSTING ENTRY necessary on December 31?
DEBIT to UNEARNED SERVICE REVENUE for $1,800
DEBIT to CASH for $1,800
DEBIT to SERVICE REVENUE for $1,800
CREDIT to SERVICE REVENUE for $600
CREDIT to UNEARNED SERVICE REVENUE for $600
CREDIT to CASH for $600
Answer: DEBIT to UNEARNED SERVICE REVENUE for $1,800
The company pays its workers every two weeks. As of December 31, the company’s workers have earned wages of $7,000 for which they have not yet been paid; they will not be paid these wages until January of next year. -- Which ONE of the following will be included in the ADJUSTING ENTRY necessary on December 31? Note: So far, nothing has been recorded in the company’s books with respect to these wages. CREDIT to WAGES EXPENSE for $7,000 CREDIT to CASH for $7,000 CREDIT to WAGES PAYABLE for $7,000 DEBIT to WAGES PAYABLE for $7,000 DEBIT to CASH for $7,000
Answer: CREDIT to WAGES PAYABLE for $7,000
The company earns interest on various investment accounts. As of December 31, the company has earned interest revenue of $5,000 for which it has not yet received the cash; the company will not receive the cash until February of next year. – Which ONE of the following will be included in the ADJUSTING ENTRY necessary on December 31? Note: So far, nothing has been recorded in the company’s books with respect to this interest.
CREDIT to CASH for $5,000
DEBIT to CASH for $5,000
CREDIT to INTEREST RECEIVABLE for $5,000
DEBIT to INTEREST REVENUE for $5,000
CREDIT to INTEREST REVENUE for $5,000
Answer: CREDIT to INTEREST REVENUE for $5,000
Which ONE of the following is a NOMINAL account? Accounts Payable Capital Stock Sales Revenue Retained Earnings Inventory
Answer: Sales Revenue
The following end-of-year account balance information is from the accounting records of June Company.
Cost of Goods Sold $9,000 Accounts Payable $1,100 Capital Stock $2,000 Cash $400 Sales Revenue $10,000 Dividends $700 Retained Earnings (beginning) $1,000 Inventory $4,000
Which ONE of the following would appear in the closing entries for the year? DEBIT to Cost of Goods Sold for $9,000 DEBIT to Sales Revenue for $10,000 DEBIT to Accounts Payable for $1,100 DEBIT to Dividends for $700 DEBIT to Capital Stock for $2,000
Answer: DEBIT to Sales Revenue for $10,000
