Variant a

1. Adjusting entries at the end of an accounting period would not be required for which of the following

a. Multiperiod costs that must be split among two or more accounting periods.

b. Multiperiod revenues that must be split among two or more accounting periods.

c. Expenses that have been incurred in a given period but not as yet recorded in the accounts.

d. Revenue that has been earned and recorded in the accounting records.+

e. (b) and (c)

2. Blankenship Company pays its employees every Friday for work rendered that week. The payroll is typically $10,000 per week. What journal entry would be recorded (on Wednesday) if the end of the accounting period occurred on a Wednesday?

a. Salary Expense 6,000

Salary Payable 6,000+

b. Salary Expense 6,000

Cash 6,000

c. Salary Payable 6,000

Cash 6,000

d. Salary Payable 6,000

Salary Expense 6,000

e. Salary Payable 3,000

Cash 3,000

3. The appropriate journal entry to record equipment depreciation expense would consist of a debit to Depreciation Expense and a credit to which of the following accounts?

a. Equipment

b. Accumulated Depreciation: Equipment+

c. Retained Earnings

d. Cash

e. Inventory

4. On November 1, 20X1, Limit Company purchased a one-year insurance policy for $12,000. Limit Company debited Cash and credited Prepaid Insurance for $12,000. At the end of December, 20X1, $2,000 of insurance had expired. The journal entry to properly state all accounts involved on December 31, 20X1, would be:

a. Insurance Expense 2,000

Prepaid Insurance 22,000

Cash 24,000

b. Insurance Expense 2,000

Prepaid Insurance 2,000+

c. Insurance Expense 2,000

Cash 2,000

d. Prepaid Insurance 2,000

Insurance Expense 2,000

c. Insurance Expense 1,000

Cash 1,000

5. Simmons Company received and recorded a $5,000 payment for services to be rendered in the future. If the income statement approach to adjusting entries is used, the appropriate adjusting entry at the end of the accounting period for $3,000 of revenue not yet earned would be:

a. Service Revenue 3,000

Unearned Service Revenue 3,000

b. Unearned Service Revenue 2,000

Service Revenue 2,000+

c. Accounts Receivable 3,000

Unearned Service Revenue 3,000

d. Accounts Receivable 2,000

Unearned Service Revenue 2,000

e. No entry would be needed.

6. In preparing a worksheet, a net loss would be computed and entered in the:

a. debit column of the income statement columns of the worksheet.++

b. credit column of the income statement columns of the worksheet.+

c. in the debit column of the adjusted trial balance.

d. in the credit column of the balance sheet columns of the worksheet.

e. none of the above

7. After closing all revenue and expense accounts, Norris Company had a debit balance in its Income Summary account of $10,000. The proper entry to record the closing of the Income Summary account would be:

a. Revenue 10,000

Income Summary 10,000

b. Retained Earnings 10,000

Income Summary 10,000+

c. Income Summary 10,000

Retained Earnings 10,000

d. Income Summary 10,000

Expenses 10,000

e. Income Summary 11,000

Expenses 11,000