Question : 51.Phoenix Corp. paid rent of $12,000 per month for 3 : 1253620

51.Phoenix Corp. paid rent of $12,000 per month for 3 months in advance on November 1, 2010. Phoenix accounting period ends on December 31, 2010. Which amount will be reported at December 31, 2010?

a.Prepaid Rent of $4,000 on its December 31, 2010 balance sheet

b.Rent Payable of $12,000 on its December 31, 2010 balance sheet

c.Rent Expense of $12,000 on its income statement for the year ending December 31, 2010

d.Rent Expense of $4,000 on its income statement for the year ending December 31, 2010

52.Which one of the following is a characteristic of the double entry system?

a.For every debit in every account, there must be a corresponding credit of the same dollar amount in the same account.

b.The total dollar value of debits must equal the total dollar amount of the credits in most of the accounts.

c.For every asset recorded in the accounting records, there must be a corresponding liability of the same dollar amount.

d.The total dollar amount of debits must equal the total dollar amount of the credits.

53.The statement of shareholders’ equity is a record of activity over a period of time of the

a.contributed capital accounts.

b.retained earnings account.

c.dividends account.

d.both a and b.

54.Journal entries are used to indicate how

a.much profit was earned during the accounting period.

b.events affect the retained earnings account.

c.events affect the accounting equation.

d.much dividends were paid to shareholders.

55.The accounting concepts that underlie the accrual system of accounting are

a.debits and credits.

b.revenue recognition and matching.

c.revenue recognition and debits equal credits.

d.matching and deferrals.

56.Recognition of a gain or loss may result from

a.the sale of goods to customers on account.

b.the sale of a company’s common stock to an investor.

c.the sale of a non-current asset.

d.the revenue recognition process associated with selling products to customers.

57.Which one of the following transactions will ultimately cause a decrease in retained earnings?

a.Payment of the current month’s telephone bill

b.Collection of cash from a customer for services provided in the current month

c.Payment of the prior month’s account payable balance

d.Receipt of interest on a note receivable

58.What effect does recognizing accrued wages expense at the end of the accounting period have on the accounting equation?

a.Assets decrease and shareholders’ equity decreases.

b.Liabilities increase and shareholders’ equity decreases.

c.Assets decrease and liabilities decrease.

d.Liabilities decrease and shareholders’ equity decreases.

59.A company sold vacant land that it had owned for three years. The difference between the amount of cash receipts and the original cost of land owned by the company

a.is reported as a revenue or expense on the income statement.

b.represents the amount of gain or loss associated with the asset sold.

c.represents the amount of cash associated with the asset sold.

d.should be debited or credited directly to retained earnings.

60.What effect does recognizing revenue at the end of the accounting period for rent received in advance have on the accounting equation?

a.Revenues increase and liabilities decrease.

b.Assets increase and shareholders’ equity increases.

c.Revenues decrease and liabilities decrease.

d.Liabilities increase and revenues decrease.