Question : 31.Which of the following debits and credits describes the payment : 1253618

31.Which of the following debits and credits describes the payment of interest and principal on a loan?

a. Debit an asset and credit a liability

b. Debit an asset, debit an expense, and debit a liability

c. Credit an asset, debit an expense, and debit a liability

d. Credit an asset and debit a liability

32.Favre Company paid for insurance in advance. Which transaction will Favre record?

a. Debit Cash and credit Insurance Expense.

b. Debit Prepaid Insurance and credit Cash.

c. Debit Prepaid Insurance and credit Accounts Payable.

d. Debit Cash and Credit Prepaid Insurance.

33.A company has a 4-month, 11%, $10,000 Notes Payable account in its general ledger at the end of the year. The note matures two months after the end of the accounting period. Which statement is true?

a.Interest revenue must be accrued at the end of the accounting period.

b.The notes payable could generate a gain if the note is paid off early.

c.The interest was paid when the cash was borrowed.

d.Interest expense must be accrued at the end of the accounting period.

34.Gilbert Company purchased equipment financed by the issuance of a 4-year note payable. To record this, Gilbert will

a. debit assets and credit shareholders’ equity.

b. debit shareholders’ equity and credit liabilities.

c. debit assets and credit liabilities.

d. debit liabilities and credit assets.

35.Goodyear Co. purchased $2,000 of equipment with a $2,000 cash payment. Goodyear Co. should

a. debit one asset and credit another asset for $2,000..

b. debit shareholders’ equity and credit assets for $2,000.

c. debit assets and credit liabilities for $2,000.

                  no entry

36.Buckeye Company received $1,000 from customers for services provided during the current month. Buckeye will

a. debit liabilities and credit revenue for $1,000.

b. debit revenue and credit assets for $1,000.

c. debit assets and credit revenue for $1,000.

d. debit liabilities and credit assets for $1,000.

37.When an adjusting entry for depreciation expense for the accounting period is recorded,

a.assets and shareholders’ equity increase.

b.the amount of depreciation expense is subtracted from accumulated depreciation.

c.assets and shareholders’ equity decrease.

d.assets increase and shareholders’ equity decreases.

38.An asset account

a. has a debit balance.

b. is increased with a credit.

c. is a shareholders’ equity account because it has a book value.

d. will have a negative balance if the company’s expenses exceed revenues for the period.

39.When making adjustments to plant asset accounts,

a.the total dollar amount in the accumulated depreciation account will determine the amount of depreciation expense for the current accounting period.

b.depreciation expense is added to the plant asset account.

c.depreciation expense reduces net income.

d.the current market value of the long-lived asset determines the amount of depreciation expense.

e.the accrual system is ignored.

40.During April, Tempe Corp. paid $4,000 on account for supplies that were purchased, recorded, and used during March. In recording this transaction, Tempe will

a. debit Accounts Payable and credit Cash.

b. debit Shareholders’ equity and credit Accounts Payable.

c. debit Supplies Expense and credit Accounts Payable.

d. accrue an expense of $4,000.