Question

1. )

The Prepaid Insurance account has a balance of $200 less in the work sheet's Balance Sheet Debit column than in the work sheet's Trial Balance Debit column. This would be the result of a

Select one:

a. $200 entry to Prepaid Insurance in the work sheet's Adjustments Credit column.

b. $200 entry to Prepaid Insurance in the work sheet's Adjustments Debit column.

c. $200 entry to Insurance Expense in the work sheet's Adjustments Credit column.

d. $400 entry to Insurance Expense in the work sheet's Adjustments Credit column.

e. $400 entry to Prepaid Insurance in the work sheet's Adjustments Credit column.

2.)

Rent received in advance by a landlord is called unearned revenue if the rental income will be earned in more than one fiscal period.

Select one:

True

False

3.)

The first adjusting entry for merchandise inventory causes a zero balance in the Merchandise Inventory account when using the periodic inventory system.

Select one:

True

False

4.)

The adjusting entry for expired or used insurance will increase the Insurance Expense account.

Select one:

True

False

5.)

The adjusting entry for unearned revenue involves a debit to Accounts Payable.

Select one:

True

False

6.)

Under a periodic inventory system, entries are recorded in the Merchandise Inventory account at the end of the fiscal period only.

Select one:

True

False

Answer 1

1)
Answer is a. $200 entry to Prepaid Insurance in the work sheet's Adjustments Credit column
Siince credit entry to Prepaid Insurance will reduce its balance

2)
Answer is True

3)
Answer is False
Balance in inventory account depends on the physical count as on period end date.

4)
True

5)
False
Unearned Revenue is debited and revenue is credited.

6)
True
Merchandise inventory is recorded at period end

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