Question : 21. What happens to the accounting equation when the adjustment recorded : 1224885

21. What happens to the accounting equation when the adjustment is recorded to recognize earned revenue previously recorded as unearned revenue? 
A. Assets and liabilities increase
B. Liabilities decrease and stockholders’ equity increases
C. Assets and liabilities decrease
D. Stockholders’ equity increases and decreases by the same amount

22. Adjustments for which of the following involves the cash account? 
A. Deferred revenues
B. Accrued expenses
C. Deferred liabilities
D. None of these

23. Which one of the following adjustments will increase assets? 
A. Interest incurred on money borrowed during the period but not yet paid to the bank.
B. Rent revenue is recorded for amounts owed by a tenant but not yet paid.
C. The use of supplies is recorded.
D. Depreciation for the period is recorded.

24. Accumulated Depreciation: 
A. increases with a debit.
B. decreases with a credit.
C. increases with a credit.
D. is an adjunct account.

25. Suppose that a business sells 6-month subscriptions to its monthly magazine. On January 1, the company receives a total of $600 for 10 subscriptions. To record this transaction, the company debits “Cash” for $600 and credits “Unearned Subscription Revenue” for $600. As of January 31, the company has provided one month of magazines and has earned one month of revenue.  What adjusting entry is necessary at January 31? 
A. Unearned Subscription Revenue          600
     Subscription Revenue                                600
B. Subscription Revenue                          100
     Unearned Subscription Revenue                100
C. Unearned Subscription Revenue          100
     Subscription Revenue                                100
D. Subscription Revenue                           600
     Unearned Subscription Revenue               600

26. Suppose a company received a $2,500 utility bill for the month of March but has not yet recorded the transaction or paid the bill. What adjusting entry is necessary at March 31? 
A. Utilities Expense                     2,500
     Utilities Payable                               2,500
B. Utilities Expense                     2,500
     Cash                                                  2,500
C. Utilities Payable                      2,500
     Utilities Expense                              2,500
D. No Entry

27. Pine Corporation makes adjusting entries monthly. Property, Plant, and Equipment depreciates at a rate of $9,000 per month. No entry for depreciation has been recorded in the month of March. What adjusting entry is necessary at March 31? 
A. Accumulated Depreciation                750
     Property, Plant, & Equipment                  750
B. Depreciation Expense                    9,000
     Accumulated Depreciation                    9,000
C. Property, Plant & Equipment            750
     Depreciation Expense                              750
D. Depreciation Expense                    9,000
     Property, Plant & Equipment                9,000

28. Pine Corporation makes adjusting entries monthly. As of March 31, the general ledger shows Prepaid Rent to have a debit balance of $6,000. Rent expires at a rate of $1,200 per month. No entry for rent has been recorded in the month of March. What adjusting entry is necessary at March 31? 
A. Prepaid Rent                500
     Cash                                       500
B. Rent Expense            1,200
     Cash                                    1,200
C. Rent Expense            1,200
     Prepaid Rent                       1,200
D. Prepaid Rent             6,000
     Rent Expense                      6,000

29. Suppose that a business purchases a 6-month general liability insurance policy for $24,000 on January 1. To record this transaction, the company debits “Prepaid Insurance” for $24,000 and credits “Cash” for $24,000.  As of January 31, the company has consumed one month of insurance.  What adjusting entry is necessary at January 31? 
A. Insurance Expense                   24,000
     Prepaid Insurance                              24,000
B. Insurance Expense                     4,000
     Cash                                                    4,000
C. Prepaid Insurance                     24,000
     Insurance Expense                             24,000
D. Insurance Expense                     4,000
     Prepaid Insurance                                 4,000

30. Income statement accounts are also known as which of the following? 
A. Temporary accounts
B. Real accounts
C. Permanent accounts
D. Asset accounts