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The adjusting entry to account for the expiration of prepaid insurance consists of


A) a debit to Insurance Expense and a credit to Prepaid Insurance.
B) a debit to Insurance Expense and a credit to Accumulated Depreciation.
C) a debit to Prepaid Insurance and a credit to Accumulated Depreciation.
D) a debit to Accumulated Depreciation and a credit to Prepaid Insurance.

E) A) and D)
F) B) and C)

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MacGyver Company bought equipment on January 3,2016,for $34,000.At the time of purchase,the equipment was estimated to have a useful life of six years and a salvage value of $880.Using the straight-line method,the amount of one year's depreciation is


A) $880.
B) $5,520.
C) $460.
D) $5,667.

E) All of the above
F) A) and B)

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In the Adjusted Trial Balance section of the worksheet the total debits should equal the total credits.

A) True
B) False

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If an adjustment is not recorded for supplies used,the firm's assets will be overstated.

A) True
B) False

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When a trial balance is in balance,


A) adjusting entries are not required.
B) the general ledger is free of errors.
C) the debit account balances equal the credit account balances.
D) the company has earned a net income.

E) B) and C)
F) A) and D)

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The balance in the Prepaid Rent account before adjustment at the end of the year is $12,000,which represents six months rent paid on November 1.The adjusting entry required on December 31 to show the amount of rent that had expired is:


A)
The balance in the Prepaid Rent account before adjustment at the end of the year is $12,000,which represents six months rent paid on November 1.The adjusting entry required on December 31 to show the amount of rent that had expired is: A) B) C) D)
B)
The balance in the Prepaid Rent account before adjustment at the end of the year is $12,000,which represents six months rent paid on November 1.The adjusting entry required on December 31 to show the amount of rent that had expired is: A) B) C) D)
C)
The balance in the Prepaid Rent account before adjustment at the end of the year is $12,000,which represents six months rent paid on November 1.The adjusting entry required on December 31 to show the amount of rent that had expired is: A) B) C) D)
D)
The balance in the Prepaid Rent account before adjustment at the end of the year is $12,000,which represents six months rent paid on November 1.The adjusting entry required on December 31 to show the amount of rent that had expired is: A) B) C) D)

E) A) and B)
F) A) and C)

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On November 1,2016,Peaches Consulting Service paid $4,800 for 12 months of advance rent on its office space.The correct adjusting entry on December 31 to show the amount of rent that had expired would include:


A) debit Rent Expense $400;credit Prepaid Rent $400
B) debit Rent Expense $800;credit Prepaid Rent $800
C) debit Prepaid Rent $4,000;credit Rent Expense $4,000
D) debit Rent Expense $4,800;credit Prepaid Rent $4,800

E) All of the above
F) C) and D)

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The partial worksheet for the Marion Consulting Services for the month ended January 31,2016,is shown below.Using this data,prepare an income statement,a statement of owner's equity,and a balance sheet.The owner made no additional investments during the month. The partial worksheet for the Marion Consulting Services for the month ended January 31,2016,is shown below.Using this data,prepare an income statement,a statement of owner's equity,and a balance sheet.The owner made no additional investments during the month.

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The cost of a long-term asset,such as equipment,is transferred to expense as it is used during its life.

A) True
B) False

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The adjusting entry to account for the use of supplies consists of


A) a debit to Supplies Expense and a credit to Supplies.
B) a debit to Supplies and a credit to Supplies Expense.
C) a debit to Supplies and a credit to Accumulated Depreciation.
D) a debit to Accumulated Depreciation and a credit to Supplies.

E) B) and D)
F) B) and C)

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On a worksheet,the adjusted balance of the Supplies account is extended to:


A) the Income Statement Debit column.
B) the Income Statement Credit column.
C) the Balance Sheet Debit column.
D) the Balance Sheet Credit column.

E) A) and D)
F) B) and C)

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Which of the following statements is not correct?


A) Generally accepted accounting principles require that the original cost of a long-term asset continue to appear in the asset account until the disposition of the asset.
B) The book value of a long-term asset is reduced each year as depreciation is recorded.
C) Buildings and trucks are examples of long-term assets.
D) Salvage value is computed by subtracting the accumulated depreciation from the cost of a long-term asset.

E) C) and D)
F) A) and B)

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The balances of the ledger accounts for Lance's Landscaping Design on March 31,2016,and the information needed for adjustments are shown below.Prepare the Trial Balance section,record the adjustments,and complete the worksheet. The balances of the ledger accounts for Lance's Landscaping Design on March 31,2016,and the information needed for adjustments are shown below.Prepare the Trial Balance section,record the adjustments,and complete the worksheet. Adjustment information: (a)The supplies were purchased on March 1,2016.An inventory of supplies showed $300 on hand on March 31,2016. (b)The amount of Prepaid Insurance represents a payment made March 1,2016,for a six-month insurance policy. (c)The equipment,purchased March 1,2016,has an estimated useful life of 5 years with no salvage value.The firm uses the straight-line method of depreciation. Adjustment information: (a)The supplies were purchased on March 1,2016.An inventory of supplies showed $300 on hand on March 31,2016. (b)The amount of Prepaid Insurance represents a payment made March 1,2016,for a six-month insurance policy. (c)The equipment,purchased March 1,2016,has an estimated useful life of 5 years with no salvage value.The firm uses the straight-line method of depreciation. The balances of the ledger accounts for Lance's Landscaping Design on March 31,2016,and the information needed for adjustments are shown below.Prepare the Trial Balance section,record the adjustments,and complete the worksheet. Adjustment information: (a)The supplies were purchased on March 1,2016.An inventory of supplies showed $300 on hand on March 31,2016. (b)The amount of Prepaid Insurance represents a payment made March 1,2016,for a six-month insurance policy. (c)The equipment,purchased March 1,2016,has an estimated useful life of 5 years with no salvage value.The firm uses the straight-line method of depreciation. The balances of the ledger accounts for Lance's Landscaping Design on March 31,2016,and the information needed for adjustments are shown below.Prepare the Trial Balance section,record the adjustments,and complete the worksheet. Adjustment information: (a)The supplies were purchased on March 1,2016.An inventory of supplies showed $300 on hand on March 31,2016. (b)The amount of Prepaid Insurance represents a payment made March 1,2016,for a six-month insurance policy. (c)The equipment,purchased March 1,2016,has an estimated useful life of 5 years with no salvage value.The firm uses the straight-line method of depreciation.

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On December 31,Treats Catering Inc.'s trial balance shows a $1,000 balance in the Supplies account.However,a physical count of the supplies determined that only $400 of supplies actually remain in the supply cabinet.Select the adjusting entry made on December 31,to record the amount of supplies that had been used during the year.


A)
On December 31,Treats Catering Inc.'s trial balance shows a $1,000 balance in the Supplies account.However,a physical count of the supplies determined that only $400 of supplies actually remain in the supply cabinet.Select the adjusting entry made on December 31,to record the amount of supplies that had been used during the year. A) B) C) D)
B)
On December 31,Treats Catering Inc.'s trial balance shows a $1,000 balance in the Supplies account.However,a physical count of the supplies determined that only $400 of supplies actually remain in the supply cabinet.Select the adjusting entry made on December 31,to record the amount of supplies that had been used during the year. A) B) C) D)
C)
On December 31,Treats Catering Inc.'s trial balance shows a $1,000 balance in the Supplies account.However,a physical count of the supplies determined that only $400 of supplies actually remain in the supply cabinet.Select the adjusting entry made on December 31,to record the amount of supplies that had been used during the year. A) B) C) D)
D)
On December 31,Treats Catering Inc.'s trial balance shows a $1,000 balance in the Supplies account.However,a physical count of the supplies determined that only $400 of supplies actually remain in the supply cabinet.Select the adjusting entry made on December 31,to record the amount of supplies that had been used during the year. A) B) C) D)

E) A) and C)
F) B) and C)

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On March 1,2016,the company paid $6,000 rent in advance for a 12-month period.On December 31,2016,the company's adjustment for expired rent would include:


A) a $5,000 debit to Prepaid Rent;a $5,000 credit to Rent Expense.
B) a $5,000 debit to Rent Expense;a $5,000 credit to Prepaid Rent.
C) a $1,000 debit to Rent Expense;a $1,000 credit to Prepaid Rent.
D) a $6,000 debit to Prepaid Rent;a $6,000 credit to Rent Expense.

E) B) and D)
F) B) and C)

Correct Answer

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A total of $4,000 in supplies was purchased during the year.By the end of the year,the company had used up $1,300 of the supplies.The adjusting entry needed at the end of the year is:


A) debit Supplies $1,300;credit Supplies Expense $1,300
B) debit Supplies Expense $1,300;credit Supplies $1,300
C) debit Supplies Expense $2,700;credit Supplies $2,700
D) debit Supplies Expense $4,000;credit Supplies $4,000

E) C) and D)
F) All of the above

Correct Answer

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Which of the following entries records the depreciation on equipment for the fiscal year-end adjustment?


A) Debit Accumulated Depreciation;credit Depreciation Expense
B) Debit Depreciation Expense;credit Equipment
C) Debit Depreciation Expense;credit Accumulated Depreciation
D) Debit Depreciation;credit Depreciation Expense

E) B) and C)
F) A) and D)

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If adjustments are entered on a worksheet,it is not necessary to record them in the journal or the ledger.

A) True
B) False

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For each of the accounts listed below,enter the words,Increase or Decrease,in the Debit and Credit columns to indicate the effects of each on the account balance. For each of the accounts listed below,enter the words,Increase or Decrease,in the Debit and Credit columns to indicate the effects of each on the account balance.

Correct Answer

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Accumulated Depreciation,Equipment,is shown as:


A) a liability on the Balance Sheet
B) a reduction of Capital on the Statement of Owner's Equity
C) a contra asset on the Balance Sheet
D) an expense on the Income Statement

E) B) and C)
F) B) and D)

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