Question :
34.On July 1, 2016, a firm purchased a 1-year insurance : 1168938
34.On July 1, 2016, a firm purchased a 1-year insurance policy for $1,800 and paid the full premium in advance. The insurance expense associated with this policy for the year ending December 31, 2016, is
A. $600.
B. $1,050.
C. $900.
D. $1,800.
35.On May 1, 2016, a firm purchased a 1-year insurance policy for $3,600 and paid the full premium in advance. The insurance expense associated with this policy for the year ending December 31, 2016, is
A. $3,600.
B. $2,400.
C. $2,100.
D. $1,200.
36.On Oct 1, 2016, a firm purchased a 1-year insurance policy for $2,400 and paid the full premium in advance. The adjustment needed on December 31, 2016, to report the amount of insurance that had expired, would be:
A. a debit to Prepaid Insurance for $600 and a credit to Insurance Expense for $600.
B. a debit to Insurance Expense for $600 and a credit to Prepaid Insurance for $600.
C. a debit to Insurance Expense for $2,400 and a credit to Cash for $2,400.
D. a debit to Insurance Expense for $1,800 and a credit to Prepaid Insurance for $1,800.
37.On January 2, 2016, a firm purchased equipment for $8,500. Depreciation expense for the year ending December 31, 2016, given the straight-line method, a 5-year useful life, and a salvage value of $1,500, is
A. $1,500.
B. $1,700.
C. $1,200.
D. $1,400.
38.On January 1, 2016, a firm purchased machinery for $17,000. Depreciation expense for the year ending December 31, 2016, given the straight-line method, a 5-year useful life, and a salvage value of $3,000, is
A. $3,000.
B. $3,400.
C. $2,800.
D. $2,400.
39.Accrued expenses are
A. paid for in one period but not fully used until a later period.
B. used in one period but not paid for until a later period.
C. paid for, recorded, and used in one period.
D. budgeted but not paid for or used during the period.
40.An adjusting entry is usually not required for a revenue item when it is
A. budgeted, paid for, and partially earned in one period but not fully earned until a later period.
B. paid for by the customer, recorded, and earned in one period.
C. paid for by the customer and recorded in one period but not fully earned until a later period.
D. earned in one period but not paid for by the customer or recorded until a later period.
41.Which of the following statements is correct?
A. Income that has been earned but not yet received is called accrued income.
B. Unearned Subscription Income is a liability account.
C. Under the accrual basis of accounting, revenue is recognized and recorded in the period when it is earned regardless of when cash related to the transaction is received.
D. All of these statements are correct.
42.On November 1, 2016, a firm accepted a 4-month, 10 percent note for $900 from a customer with an overdue balance. The accrued interest recorded for this note for the year ended December 31, 2016, is
A. $90.
B. $75.
C. $30.
D. $15.
43.On December 1, 2016, a firm accepted a 6-month, 12 percent note for $5,000 from a customer. The adjusting entry on December 31 to record the interest earned on the note is:
A. a debit to Interest Receivable for $600 and a credit to Interest Income for $600.
B. a debit to Interest Income for $600 and a credit to Interest Receivable for $600.
C. a debit to Interest Receivable for $60 and a credit to Interest Income for $60.
D. a debit to Interest Receivable for $300 and a credit to Interest Income for $300.
