Question :
71.Refer to the information above. On March 1, Hoffman paid : 1237602
71.Refer to the information above. On March 1, Hoffman paid in advance for four months’ insurance. The necessary adjusting entry at March 31 includes which of the following?
A. A credit to Prepaid Insurance for $2,340.
B. A credit to Prepaid Insurance for $780.
C. A debit to Prepaid Insurance for $2,340.
D. A debit to Prepaid Insurance for $780.
$3,120/4 = $780
72.Refer to the information above. At March 31, the amount of supplies on hand is $520. What amount is reported in the March income statement for supplies expense?
A. $1,300.
B. $0.
C. $520.
D. $780.
$1,300 – $520 = $780
73.Refer to the information above. The equipment had an estimated useful life of five years. Compute the book value of the equipment at March 31, after the proper March adjustment is recorded.
A. $10,833.
B. $15,167.
C. $25,567.
D. $10,400.
$26,000/60 = $433; $10,400 + $433 = $10,833; $26,000 – $10,833 = $15,167
74.Refer to the information above. Employees are owed $750 for services since the last payday in March, to be paid the first week in April. The amount to be reported in the March income statement for salaries expense is:
A. $7,800.
B. $750.
C. $7,050.
D. $8,550.
$7,800 + $750 = $8,550
75.Under accrual accounting, fees received in advance from customers should be shown as being earned:
A. When cash is collected.
B. When services are performed or goods delivered.
C. When tax rates are low.
D. When tax rates are high.
76.The United Shipping Co. borrowed $25,000 at 12% interest on March 1, 2015. The note is to be repaid, with interest, in six months. If United Shipping makes monthly adjusting entries, which of the following is included as part of the March 31 adjusting entry?
A. Debit Interest Receivable $250.
B. Credit Interest Payable $2,500.
C. Debit Interest Expense $250.
D. Debit Interest Payable $250.
$25,000 × 12% = $3,000; $3,000/12 = $250
77.Hahn Corp. has three employees. Each earns $600 per week for a five day work week ending on Friday. This month the last day of the month falls on a Wednesday. The company should make an adjusting entry:
A. Debiting Wage Expense for $1,080 and crediting Wages Payable for $1,080.
B. Debiting Wage Expense for $360 and crediting Wages Payable for $360.
C. Crediting Wage Expense for $1,080 and debiting Wages Payable for $1,080.
D. Crediting Wage Expense for $360 and debiting Wages Payable for $360.
$600 × 3/5 × 3 = $1,080
78.Interest that has accrued during the accounting period on a note payable requires an adjusting entry consisting of:
A. A debit to Interest Expense and a credit to Cash.
B. A debit to Notes Payable and a credit to Interest Payable.
C. A debit to an asset and a credit to a liability.
D. A debit to Interest Expense and a credit to Interest Payable.
79.The adjusting entry to record interest that has accrued on a note payable to the bank will cause an immediate:
A. Increase in liabilities and reduction in net income.
B. Decrease in liabilities and reduction in net income.
C. Decrease in assets and reduction in net income.
D. Increase in assets and increase in net income.
80.Which of the following would not be considered an adjusting entry?
A. A Above.
B. B Above.
C. C Above.
D. D Above.
