Question

1. Which of the following would be the adjusting journal entry to recognize earned but unpaid wages for the period?

a	Dr. Wages Expense, Cr. Cash

b	Dr. Wages Payable, Cr. Cash

c	Dr. Wages Payable, Cr. Wages Expense

d	Dr. Wages Expense, Cr. Wages Payable

2. Which of the following would be the effect of a transaction to record the portion of prepaid rent that has expired in a period?

a. increase Prepaid Rent, decrease Rent Expense

b	increase Rent Expense, decrease Cash

c	increase Prepaid Rent, decrease Cash

d	increase Rent Expense, decrease Prepaid Rent

3. If the company had a loan outstanding, which of the following would be used to record accrued interest at the end of the accounting period?

a. increase Interest Expense, decrease Cash

b	increase Interest Expense, increase Interest Payable

c	decrease Interest Payable, increase Interest Income

d	decrease Interest Payable, decrease Cash

4. On March 31, 2020 Exacto Company paid $5,200 for a 1-year insurance policy. To record this transaction Exacto Company should

a. decrease Cash and increase Insurance Expense.

b.	decrease Cash and increase Prepaid Insurance.

Answer 1

Question:1

The Answer is D) Dr. Wages Expense, Cr. Wages Payable

Wages is expense and it is not yet paid. So, wages payable [Liability]

Question:2

The Answer is D) increase Rent Expense, decrease Prepaid Rent

rent is paid in advance and it is setoff at year end. So, increase in rent expense and decrease in prepaid rent

Question:3

The Answer is B) increase Interest Expense, increase Interest Payable

Interest is expense and it is not yet paid. So, interest payable [Liability]

Question:4

The Answer is B) Decrease Cash and increase Prepaid Insurance.

Insurance paid in advance.So, decrease in cash and increase in prepaid insurance.