Question :
21) The employees of Roll n Dough, Inc. get paid : 1253201
21) The employees of Roll n Dough, Inc. get paid every Friday for a 5-day workweek (Monday through Friday). The total payroll is $4,000 per day of work. If the accounting period ends on Tuesday of a given week, what adjustment must be made to the company’s accounting records?
A) Increase Salaries payable by $8,000 and decrease shareholders’ equity by recognizing Salaries expense for the same amount.
B) Decrease Salaries payable by $8,000 and increase shareholders’ equity by recognizing Salaries expense for the same amount.
C) Decrease Cash by $8,000 and decrease shareholders’ equity by recognizing Salaries expense for the same amount.
D) No adjustment is necessary because the expense is not recorded until the employees are paid.
22) The employees of Roll n Dough, Inc. get paid every Friday for a 5-day workweek (Monday through Friday). The total payroll is $4,000 per day of work. If the accounting period ends on Friday of a given week, what entry must be made to the company’s accounting records?
A) Decrease Cash by $20,000 and decrease shareholders’ equity by recognizing Salaries expense for the same amount.
B) Increase Salaries payable by $20,000 and decrease shareholders’ equity by recognizing Salaries expense for the same amount.
C) Increase Salaries payable by $20,000 and increase shareholders’ equity by recognizing Salaries expense for the same amount.
D) Decrease Cash by $4,000 and decrease shareholders’ equity by recognizing Salaries expense for the same amount.
23) The employees of Curel, Inc. get paid every Friday for a 5-day workweek (Monday through Friday). The total payroll is $6,000 per day of work. If the accounting period ends on Tuesday of a given week, what adjustment must be made to the company’s accounting records?
A) Increase Salaries payable by $12,000 and decrease shareholders’ equity by recognizing Salaries expense for the same amount.
B) Increase Salaries payable by $12,000 and increase shareholders’ equity by recognizing Salaries expense for the same amount.
C) Decrease Cash by $12,000 and decrease shareholders’ equity by recognizing Salaries expense for the same amount.
D) No adjustment is necessary because there is no expense until the employees are paid on Friday.
24) At December 31, 2010, McToil, Inc. owes its employees $20,000 for work performed in 2010. Payday is not until the first week in January 2011. What is the effect of the December 31, 2010 adjusting entry on the company’s total assets?
A) increase
B) decrease
C) no effect
D) changed in a way that cannot be predicted
25) At December 31, 2010, McToil, Inc. owes its employees $20,000 for work performed in 2010. Payday is not until the first week in January 2011. What is the effect of the December 31, 2010 adjusting entry on the company’s total liabilities?
A) increase
B) decrease
C) no effect
D) changed in a way that cannot be predicted
26) At December 31, 2010, McToil, Inc. owes its employees $20,000 for work performed in 2010. Payday is not until the first week in January 2011. What is the effect of the December 31, 2010 adjusting entry on total shareholders’ equity?
A) increase
B) decrease
C) no effect
D) changed in a way that cannot be predicted
27) Which financial statement shows Salaries payable?
A) Income statement
B) Statement of changes in shareholders’ equity
C) Statement of cash flows
D) Balance sheet
28) Which financial statement shows Salaries expense?
A) Income statement
B) Statement of changes in shareholders’ equity
C) Statement of cash flows
D) Balance sheet
29) Which financial statement shows Cash paid to employees?
A) Income statement
B) Statement of changes in shareholders’ equity
C) Statement of cash flows
D) Balance sheet
30) The employees of Dew Drop Inn get paid every Friday for a 5-day workweek (Monday through Friday). The total payroll is $5,000 per day of work. If the accounting period ends on Wednesday of a given week, what adjustment must be made to the company’s accounting records?
A) Increase Salaries payable by $15,000 and increase shareholders’ equity by recognizing Salaries expense for the same amount.
B) Increase Salaries payable by $15,000 and decrease shareholders’ equity by recognizing Salaries expense for the same amount.
C) Decrease Cash by $15,000 and decrease shareholders’ equity by recognizing Salaries expense for the same amount.
D) No adjustment is necessary because there is no expense until the employees are paid on Friday.
