Question : 41) Prepaid rent shows a beginning balance of $3,600 and : 1212542

41) Prepaid rent shows a beginning balance of $3,600 and an ending balance of $2,900. The income statement for the current period reports rent expense of $3,200. What was the amount of rent purchased during the year?

A) $6,100

B) $6,800

C) $2,500

D) $400

42) Unearned revenue shows a beginning balance of $4,700 and an ending balance of $3,400. The adjusting entry shows a credit to service revenue for $10,200. How much cash was received in advance during the year?

A) $8,900

B) $10,200

C) $14,900

D) $13,600

43) Accumulated amortization shows a beginning balance of $9,300 and an ending balance of $10,700. How much amortization expense was reported on the current year’s income statement?

A) $9,300

B) $1,200

C) $1,400

D) $10,700

44) Equipment with a cost of $103,000 has a useful life of four years. Using straight-line amortization, what is the book value after three years?

A) $77,250

B) $103,000

C) $25,750

D) $51,500

45) Accumulated amortization on an asset plus its book value equals:

A) amortization expense for the current year.

B) amortization expense to be recorded in future years.

C) amortization expense recorded in past years.

D) the cost of the equipment.

46) If a required prepaid adjustment had not been made, the financial statements would have been affected as follows:

A) net income overstated, assets overstated, liabilities unaffected, and owner’s equity overstated.

B) net income understated, assets unaffected, liabilities overstated, and owner’s equity understated.

C) net income overstated, assets understated, liabilities understated, and owner’s equity unaffected.

D) net income understated, assets understated, liabilities understated, and owner’s equity unaffected.

47) If a required accrued expense adjustment had not been made, the financial statements would have been affected as follows:

A) net income understated, assets overstated, liabilities unaffected, and owner’s equity understated.

B) net income overstated, assets unaffected, liabilities understated, and owner’s equity overstated.

C) net income understated, assets overstated, liabilities understated, and owner’s equity unaffected.

D) net income overstated, assets overstated, liabilities understated, and owner’s equity overstated.

48) If a required unearned revenue adjustment had not been made, the financial statements would have been affected as follows:

A) net income understated, assets overstated, liabilities unaffected, and owner’s equity overstated.

B) net income overstated, assets unaffected, liabilities understated, and owner’s equity unaffected.

C) net income understated, assets unaffected, liabilities overstated, and owner’s equity understated.

D) net income overstated, assets overstated, liabilities overstated, and owner’s equity unaffected.

49) If the adjusting entry to record the current periods prepaid rent expired is omitted:

A) current assets will be overstated.

B) current assets will be understated.

C) current liabilities will be overstated.

D) current liabilities will be understated.

50) On September 1, 2013, a company paid $8,400 in advance for two years insurance and debited prepaid insurance. The December 31, 2013, adjusting entry should include a debit to:

A) insurance expense for $1,400.

B) insurance expense for $7,000.

C) prepaid insurance for $2,800.

D) prepaid insurance for $1,400.