Question :
31. Which the correct order of the following steps in the : 1228501
31. Which is the correct order of the following steps in the accounting cycle?
A. Prepare financial statements, journalize and post adjusting entries, journalize and post the closing entries, and prepare a post-closing trial balance.
B. Prepare an unadjusted trial balance, journalize and post adjusting entries, journalize and post the closing entries, and prepare financial statements.
C. Journalize and post adjusting entries, journalize and post the closing entries, prepare financial statements, and prepare an adjusted trial balance.
D. Prepare an unadjusted trial balance, journalize and post adjusting entries, prepare financial statements, and journalize and post the closing entries.
32. On October 1, 2010, Adams Company paid $4,000 for a two-year insurance policy with the insurance coverage beginning on that date. As of December 31, 2010, which of the following account balances are correct after adjusting entries have been made?
A. Prepaid insurance, $4,000 and Insurance expense, $0.
B. Prepaid insurance, $0 and Insurance expense, $4,000.
C. Prepaid insurance, $2,000 and Insurance expense, $2,000.
D. Prepaid insurance, $3,500 and Insurance expense, $500.
33. On April 1, 2011, the premium on a one-year insurance policy was purchased for $3,000 cash with the insurance coverage beginning on that date. Which of the following correctly describes the effect of the December 31, 2011 adjusting entry on the financial statements?
A. (Assume that no adjusting entries have been made during the year.)
B. Prepaid insurance will decrease $750.
C. Insurance expense will increase $750.
D. Insurance expense will increase $2,250.
E. Prepaid insurance will increase $2,250.
34. The CHS Company paid $30,000 cash to its landlord on November 1, 2011 for rent covering the six-month period from November 1, 2011 through April 30, 2012. Which of the following doesn’t correctly describe the effect of the December 31, 2011 adjusting entry on CHS Company’s financial statements? (Assume that no adjusting entries have been made during the year.)
A. Net income decreases $10,000.
B. Prepaid rent decreases $10,000.
C. Rent expense increases $10,000.
D. Stockholders’ equity increases $10,000.
35. Which of the following journal entries was created as the result of an accrual?
A. Option A
B. Option B
C. Option C
D. Option D
36. Which of the following journal entries was created as the result of a deferral?
A. Option A
B. Option B
C. Option C
D. Option D
37. Which of the following journal entries was created as the result of a deferral?
A. Option A
B. Option B
C. Option C
D. Option D
38. Which of the following journal entries was created as the result of an accrual?
A. Option A
B. Option B
C. Option C
D. Option D
39. On July 1, 2011, Allen Company signed a $100,000, one-year, 6 percent note payable. The principal and interest will be paid on June 30, 2012. How much interest expense should be reported on the income statement for the year ended December 31, 2011?
A. $6,000
B. $3,000
C. $1,500
D. $0
40. Which of the following doesn’t correctly describe a journal entry which debits interest expense and credits interest payable?
A. It increases expenses and decreases retained earnings.
B. It decreases net income and decreases stockholders’ equity.
C. It increases expenses and increases liabilities.
D. It decreases assets and decreases stockholders’ equity.