Question

8.

On 12/31/12, as part of the year-end adjusting journal entries, the Strickland Company accrues three day's wages of $600 ($200 per day). The proper 12/31/12 closing entries are made. No reversing entry is made on 1/1/13. Strickland pays the weekly payroll of $1,000 on 1/2/13. The balance in the Wage Expense account after the 1/2/13 journal entry will be:

Select one:

a. $0

b. $400

c. $600

d. $1,000

e. $1,200

35.

The Charleston Company pre-pays annual rent. If the adjusting entry to record the current period’s prepaid rent expired is not recorded:

Select one:

a. Current assets will be understated

b. Net income will be overstated

c. Current liabilities will be overstated

d. Current liabilities will be understated

e. Gross Profit will be overstated

34.

Which organization is attempting to establish one set of accounting standards to be used in every country in the world?

Select one:

a. PCAOB

b. AICPA

c. IASB

d. FASB

e. APB

33.

Which is a typical result of a declaration of a cash dividend but not a declaration of a stock dividend?

Select one:

a. Retained Earnings decreases

b. Common Stock account increases

c. Net Income decreases

d. Liabilities increase

e. Liabilities decrease

Answer 1

8.

Wages per day = $200

Wages expense for 3 days i.e. $300 was debited on 12/31/12.

Now, on 1/2/13, wages expense will be debited for two days i.e 200 x 2 = $400

The balance in the Wage Expense account after the 1/2/13 journal entry will be: $400

Correct option is (b)

35.

The Charleston Company pre-pays annual rent. If the adjusting entry to record the current period’s prepaid rent expired is not recorded, it will have the following effects:

- Total expenses will be understated

- Net income will be overstated

- Retained earnings will be overstated

- Equity will be overstated

- Total assets will be overstated

Correct option is (b)

34.

IASB (International Accounting Standard Board)  is attempting to establish one set of accounting standards to be used in every country in the world.

Correct option is (c)

33.

Typical result of a declaration of a cash dividend but not a declaration of a stock dividend is :Liabilities increase

Correct option is (d)

When cash dividend is declared, dividend payable account is credited, which is a current liability. In case of stock dividend, no current liability is created.

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