Question

5. Company C has two office employees who earn $100 a day each and are paid on Friday for a five-day workweek that begins on Monday. If December 31 fell on Tuesday, and the two employees worked both on Monday and on Tuesday, what is the amount of accrued salary expense at December 31 for the two employees?

A. 200

B. 300

C. 600

D. 400

E. None of the above

6. For Company D, the balance in office supplies on the trial balance is $400 and the balance for office supplies on the adjusted trial balance is $200. What is the amount of the office supplies expense based on these two numbers?

A. 0

B. 400

C. 200

D. 600

E. None of the above

Questions 7-10: For each of the following separate cases, prepare adjusting entries required for financial statements for the year ended (date of) December 31, 2019

7. Company X has incurred $2,000 of interest expense? What is the adjusting journal entry to record this adjustment?

A. Dr. Interest Expense 2000; Cr. Interest Revenue 2000

B. Dr. Interest Revenue 2000; Cr. Interest Receivable 2000

C. Dr. Interest Expense 2000; Cr. Interest Payable 2000

D. Dr. Interest Payable 2000; Cr. Interest Expense 2000

E. None of the above

8. Salaries of $5,000 are earned by workers but not paid as of December 31, 2018. What is the adjusting journal entry to record this adjustment?

A. Dr. Salaries Payable 5000; Cr. Salaries Expense 5000

B. Dr. Salaries Expense 5000; Cr. Cash 5000

C. Dr. Cash 5000; Cr. Salaries Expense 5000

D. Dr. Salaries Expense 5000; Cr. Salaries Payable 5000

E. None of the above

9. During December Company X designed a landscape plan and the client prepaid $24,000 which Company X recorded as Unearned Revenue. All of the work related to $24,000 cash received in advance is performed during the current year.

What is the adjusting journal entry to record this adjustment?

A. Dr. Service Revenue 24,000; Cr. Unearned Revenue 24,000

B. Dr. Unearned Revenue 24,000; Cr. Service Revenue 24,000

C. Dr. Cash 12,000; Cr. Service Revenue 12,000

D. Dr. Unearned Revenue 12,000; Cr. Service Revenue 12,000

E. None of the above

10. At December 31 Company X had earned $2,000 for landscape services completed for Cortez Company. Cortez has stated that they will pay Company X on January 15. What is the adjusting journal entry to record this adjustment?

A. Dr. Accounts Receivable 2000; Cr. Cash 2000

B. Dr. Accounts Receivable 2000; Cr. Service Revenue 2000

C. Dr. Service Revenue 2000; Cr. Accounts Receivable 2000

D. Dr. Cash 2000; Cr. Service Revenue 2000

E. None of the above

11. In a trial balance which of the following five accounts is listed first: Rent Expense, Accounts Payable, Accounts Receivable, Service Revenue, or Utility Expense?

A. Rent Expense

B. Accounts Payable

C. Accounts Receivable

D. Service Revenue

E. Utility Expense

12. Which of the following accounts does NOT have the normal balance?A. Cash--1,000 debit

B. Accounts Receivable--1,000 debit

C. Accumulated Depreciation--1,000 debit

D. Depreciation Expense--1,000 debit

E. Bright, Capital--120,000 credit

13. At February 28, 2019, Company A made the following adjusting entry: Dr. Salaries Expense 200 Cr. Salaries Payable 200. At March 1, 2019 what is the reversing entry for this adjusting entry?

A. Dr. Salaries Expense 200 Cr. Salaries Payable 200

B. Dr. Salaries Payable 200 Cr. Salaries Expense 200

C. Dr. Salaries Payable 200 Cr. Cash 200

D. Dr. Cash 200 Cr. Salaries Payable 200

E. None of the above

14. What type of account is unearned revenue?

A. Asset

B. Liability

C. Equity--Capital

D. Equity--Revenue

E. Equity--Expense

15. What type of account is prepaid rent?

A. Asset

B. Liability

C. Equity--Capital

D. Equity--Revenue

E. Equity--Expense

16. What type of account is accumulated depreciation?

A. Contra Asset

B. Asset

C. Liability

D. Contra Liability

E. None of the above

Questions 17-20 are based on the following fact statement:

The items below are from the partial adjusted trial balance for Reyes Repair Shop as of December 31, 2019. Reyes is the owner of the business:

		Partial Adjusted Trial Balance
Account Name	Debit	Credit
Reyes, Withdrawals	4000
Service Revenue		9000
Wage Expense	4000
Depreciation Expense	1000
	9000	9000

17. What is the closing entry to close the revenue account?

A. Dr. Service Revenue 9,000 Cr. Income Summary 9,000

B. Dr. Income Summary 9,000 Cr. Service Revenue 9,000

C. Dr. Reyes, Capital 9,000 Cr. Service Revenue 9,000

D. Dr. Service Revenue 9,000 Cr. Reyes, Capital 9,000

E. None of the above

18. What is the closing entry to close the withdrawals account?

A. Dr. Reyes, Withdrawals 4,000 Cr. Cash 4,000

B. Dr. Income Summary 4,000 Cr. Reyes, Capital 4,000

C. Dr. Reyes, Capital 4,000 Cr. Reyes, Withdrawals 4,000

D. Dr. Reyes, Capital 4,000 Cr. Income Summary 4,000

E. None of the above

19. What is the closing entry to close the income summary account?

A. Dr. Reyes, Withdrawals 4,000 Cr. Cash 4,000

B. Dr. Income Summary 4,000 Cr. Reyes, Capital 4,000

C. Dr. Reyes, Capital 4,000 Cr. Reyes, Withdrawals 4,000

D. Dr. Reyes, Capital 4,000 Cr. Income Summary 4,000

E. None of the above

20. What is the closing entry to close the expense accounts?

A. Dr. Income Summary 5,000 Cr. Wage Expense 4,000

Cr. Depreciation Expense 1,000

B. Dr. Wage Expense 4,000 Dr. Depreciation Expense 1,000

Cr. Income Summary 5,000

C. Dr. Repair Revenue 5,000 Cr. Wage Expense 4,000

Cr. Depreciation Expense 1,000

D. Dr. Wage Expense 4,000 Dr. Depreciation Expense 1,000

Cr. Reyes, Capital 5,000

E. None of the above

Answer 1

Answer: