ABC Co. leased a portion of its store to another company for eight m

MC Qu. 103 ABC Co. leased a portion of its store to ...

ABC Co. leased a portion of its store to another company for eight months beginning on October 1, 2014, at a monthly rate of $900. This other company paid the entire $7,200 cash on October 1, which ABC Co. recorded as unearned revenue. The journal entry made by ABC Co. at year-end on December 31, 2014, would include:

	A debit to Cash for $7,200.
	A debit to Rent Earned for $2,700.
	A credit to Rent Earned for $2,700.
	A credit to Unearned Rent for $2,700.
	A debit to Unearned Rent for $4,500.

$7,200 x 3/8 = $2,700 rent earned

A company's Office Supplies account shows a beginning balance

MC Qu. 112 A company's Office Supplies account shows a beginning...

A company's Office Supplies account shows a beginning balance of $980 and an ending balance of $590. If office supplies expense for the year is $8,800, what amount of office supplies was purchased during the period?

	$9,000
	$9,390
	$8,210
	$8,410
	$9,780

$980 + Supplies purchased - $8,800 = $590
Supplies purchased - $7,820 = $590
$8,410 = Supplies purchased

MC Qu. 102 On April 30, 2014, a three-year insurance...

MC Qu. 102 On April 30, 2014, a three-year insurance...

On April 30, 2014, a three-year insurance policy was purchased for $19,620 with coverage to begin immediately. What is the amount of insurance expense that would appear on the company's income statement for the year ended December 31, 2014?

	$545.00
	$4,360
	$6,540
	$15,260
	$19,620

$19,620 x 8/36 = $4,360

MC Qu. 153 Based on the following information... Based on the following information, determine the current assets, assuming all accounts have a normal balance?

MC Qu. 153 Based on the following information...

Based on the following information, determine the current assets, assuming all accounts have a normal balance?

Cash	$6,914	Dividends	$3,600
Accounts receivable	15,333	Consulting fees earned	15,318
Office supplies	2,785	Rent expense	3,833
Land	38,753	Salaries expense	6,802
Office equipment	16,135	Telephone expense	720
Accounts payable	6,623	Miscellaneous expense	440
Common stock	56,090	Retained Earnings	?

	$41,167
	$79,920
	$63,785
	$62,713
→	$25,032

$6,914 + $15,333 + $2,785 = $25,032

MC Qu. 133 Which of the following statements is true? Which of the following statements is true?

MC Qu. 133 Which of the following statements is true?

Which of the following statements is true?

	Retained earnings must be closed each accounting period.
→	A post-closing trial balance should include only permanent accounts.
	Information on the work sheet can be used in place of preparing financial statements.
	By using a work sheet to prepare adjusting entries, you need not post these entries to the ledger accounts
	Closing entries are only necessary if errors have been made.

The approach to preparing financial statements based on recognizing revenues when they are earned and matching expenses to those revenues is:

MC Qu. 66 The approach to preparing financial...

The approach to preparing financial statements based on recognizing revenues when they are earned and matching expenses to those revenues is:

	Cash basis accounting.
	The matching principle.
	The time period principle.
	Accrual basis accounting.
	Revenue basis accounting.

An adjusting entry was made on December 31, 2014 to accrue a salary ex

MC Qu. 109 An adjusting entry was made on December ...

An adjusting entry was made on December 31, 2014 to accrue a salary expense of $1,200. Which of the following entries would be prepared to record the next payment of salaries on January, 2015 in the amount of $3,000?

$3,000 (total) - $1,200 (accrued) = $1,800 expense

On April 30, 2014, a three-year insurance p

MC Qu. 102 On April 30, 2014, a three-year insurance...

On April 30, 2014, a three-year insurance policy was purchased for $18,000 with coverage to begin immediately. What is the amount of insurance expense that would appear on the company's income statement for the year ended December 31, 2014?

	$500
	$4,000
	$6,000
	$14,000
	$18,000

$18,000 x 8/36 = $4,000

A company earned $2,000 in net income for October. Its net sales for October were $10,000. Its profit margin is:

MC Qu. 83 A company earned...

A company earned $2,000 in net income for October. Its net sales for October were $10,000. Its profit margin is:

	2%
→	20%
	200%
	500%
	$8,000

$2,000/$10,000 = 20%

The main purpose of adjusting entries is to:

MC Qu. 62 The main purpose of adjusting entries is to:

The main purpose of adjusting entries is to:

	Record external transactions and events.
	Record internal transactions and events.
	Recognize assets purchased during the period.
	Recognize debts paid during the period.
	Correct errors.

Each letter below contains three of the steps found in the accounting cycle. Which presents the given steps in the proper sequence, first to last?

MC Qu. 72 Each letter below contains three of the...

Each letter below contains three of the steps found in the accounting cycle. Which presents the given steps in the proper sequence, first to last?

	Adjust, analyze transactions, close.
	Analyze transactions, adjust, close.
	Prepare post-closing trial balance, prepare statements, close.
	Prepare statements, post, close.
	Prepare adjusted trial balance, journalize, close.

The following information is available for the Travis Travel Agency. After the closing entries have been journalized and posted, what will be the balance in the Retained Earnings account?

MC Qu. 126 The following information is available for...

The following information is available for the Travis Travel Agency. After the closing entries have been journalized and posted, what will be the balance in the Retained Earnings account?

  

	$65,000
	$80,000
→	$130,000
	$145,000
	$280,000

$80,000 + $125,000 - $60,000 - $15,000 = $130,000

A classified balance sheet:

MC Qu. 73 A classified balance sheet:

A classified balance sheet:

	Measures a company's ability to pay its bills on time.
	Organizes assets and liabilities into important subgroups.
	Presents revenues, expenses, and net income.
	Reports operating, investing, and financing activities.
	Reports the effect of profit and dividends on retained earnings.

Under the alternative method for accounting for unearned revenues, which of the following pairs of journal entry formats is correct?

MC Qu. 134 Under the alternative method for accounting...

Under the alternative method for accounting for unearned revenues, which of the following pairs of journal entry formats is correct?

  

	Option A
→	Option B
	Option C
	Option D
	Option E

A post-closing trial balance includes:

MC Qu. 132 A post-closing trial balance includes:

A post-closing trial balance includes:

→	All ledger accounts with balances, none of which can be temporary accounts.
	All ledger accounts with balances, none of which can be permanent accounts.
	All ledger accounts with balances, which include some temporary and some permanent accounts.
	Only revenue and expense accounts.
	Only asset accounts.

MC Qu. 109 An adjusting entry was made on December ...

MC Qu. 109 An adjusting entry was made on December ...

An adjusting entry was made on December 31, 2014 to accrue a salary expense of $1,200. Which of the following entries would be prepared to record the next payment of salaries on January, 2015 in the amount of $3,000?

→

$3,000 (total) - $1,200 (accrued) = $1,800 expense

A publishing company records the subscriptions paid in advance by its c

MC Qu. 81 A publishing company records the...

A publishing company records the subscriptions paid in advance by its customers in an account called Unearned Subscription Revenue. If the company fails to make the end-of-period adjusting entry to record the portion of the subscriptions that have been earned, one effect will be:

	An overstatement of equity.
→	An overstatement of liabilities.
	An understatement of assets.
	An understatement of liabilities.
	An overstatement of assets.

ask your instructor a question

Western Company has an annual reporting period that runs from July 1 through

MC Qu. 59 Western Company has an annual reporting...

Western Company has an annual reporting period that runs from July 1 through
June 30. Based on this information, which of the following is a true statement?

	Western probably has little seasonal variation in their sales.
	Western has violated the time period principle.
	Western must prepare financial statements as of December 31 each year.
	Western has adopted a fiscal year.
	Western does not have an accountant.

Based on the following information, what would be the ending balance in the Retained Earnings account, assuming all accounts have a normal balance?

MC Qu. 151 Based on the following information, what...

Based on the following information, what would be the ending balance in the Retained Earnings account, assuming all accounts have a normal balance?

  

	$15,847
	$13,718
	$13,155
	$13,284
→	$13,847

Total debits: $6,754 + $13,733 + $2,625 + $37,153 + $14,535 + $2,000 + $3,673 + $6,642 + $560 + $280 = $87,955
Given credits: $6,463 + $54,490 + $13,718 = $74,671
Total debits $87,955 - Given credits $74,671 = RE $13,284 missing credit (beginning bal)
$13,284 + $13,718 - $3,673 - $6,642 - $560 - $280 - $2,000 = $13,847 (ending bal)

Based on the following information, determine the current assets, assuming all accounts have a normal balance?

MC Qu. 153 Based on the following information...

Based on the following information, determine the current assets, assuming all accounts have a normal balance?

  

	$74,800
	$37,647
	$60,265
→	$23,112
	$60,953

$6,754 + $13,733 + $2,625 = $23,112