Question :
91. Which of the following not an example of an adjusting : 1245874
91. Which of the following is not an example of an adjusting entry?
A. recognition of depreciation on equipment purchased during the year
B. recording the expiration of a portion of the cost of prepaid insurance that was purchased during the previous year
C. recognition of income tax expense on the net income earned during the period
D. recording of collections received from customers during the period
E. recognition of warranty expense on cars sold during the period
92. Malcolm Corporation purchased an insurance policy for three years beginning January 1, Year 2, and recorded the $6,000 premium in the Prepaid Insurance account. What adjusting entry is required to reflect the proper balances, in the insurance-related accounts at year-end, on December 31, Year 2?
A. Insurance Expense 2,000
Prepaid Insurance 2,000
B. Prepaid Insurance 2,000
Insurance Expense 2,000
C. Insurance Expense 4,000
Prepaid Insurance 4,000
D. Prepaid Insurance 4,000
Insurance Expense 4,000
E. Insurance Expense 6,000
Prepaid Insurance 6,000
93. Gross Company purchased $50,000 worth of office supplies on January 1. Gross expects to use 60 percent of the supplies in the first year and the remainder in the second year. After adjusting entries (and before closing entries), how much should Gross show in its Supplies Expense account?
A. $50,000
B. $30,000
C. $25,000
D. $20,000
E. $0
94. Andrews Corporation’s liability account balances at June 30, 2013, included a 10 percent note payable. The note is dated October 1, 2011, and carried an original principal amount of $600,000. The note is payable in three equal annual payments of $200,000 plus interest. The first interest and principal payment was made on October 1, 2012. In Andrews’ June 30, 2013, balance sheet, what amount should be reported as Interest Payable for this note?
A. $10,000
B. $15,000
C. $30,000
D. $45,000
E. None of these answers is correct.
95. Magic Corp. purchased new equipment during the year but neglected to record depreciation. What is the effect of this omission on each of the named accounts?
Accumulated Retained Depreciation
Depreciation Earnings Expense
A. Understated Overstated Understated
B. Understated No effect Overstated
C. Overstated Understated Understated
D. Overstated No effect Overstated
E. Overstated Understated Overstated
96. Failure to record the expired amount of prepaid rent expense would not
A. understate expense.
B. overstate net income.
C. overstate owners’ equity.
D. understate liabilities.
E. All of these choices would result from failure to record expired prepaid rent.
97. If an expense has been incurred but not yet recorded, then the end-of-period adjusting entry would involve
A. a liability account and an asset account.
B. a liability account and a revenue account.
C. a liability and an expense account.
D. a receivable account and a revenue account.
E. None of these answer choices is correct.
98. Failure to record depreciation expense at the end of an accounting period results in
A. understated income.
B. understated assets.
C. overstated expenses.
D. overstated assets.
E. All of these choices are correct.
99. An adjusting entry will not take the format of which one of the following entries?
A. A debit to an expense account and a credit to an asset account
B. A debit to an expense account and a credit to a revenue account
C. A debit to an asset account and a credit to a revenue account
D. A debit to a liability account and a credit to a revenue account
E. An adjusting entry could take the format of any choice a through d.
100. The Supplies account balance at the beginning of the period was $6,600. Supplies totaling $12,825 were purchased during the period and debited to Supplies . A physical count shows $3,825 of Supplies at the end of the period. The proper journal entry at the end of the period
A. debits Supplies and credits Supplies Expense for $9,000.
B. debits Supplies Expense and credits Supplies for $12,825.
C. debits Supplies and credits Supplies Expense for $15,600.
D. debits Supplies Expense and credits Supplies for $15,600.
E. None of these choices are correct.
