Question : 41. If the prepaid expenses not adjusted, assets the balance sheet A. will : 1197837

41. If the prepaid expenses are not adjusted, assets on the balance sheet 

A. will be overstated.

B. will be understated.

C. will not be affected.

D. may be either overstated or understated.

42. If long-term assets are not adjusted, expenses on the income statement 

A. will be overstated.

B. will be understated.

C. will not be affected.

D. may be either overstated or understated.

43. On November 25, 2013, the company paid $24,000 rent in advance for a six-month period (December 2013 through May 2014). On December 31, 2013, the adjustment for expired rent would include 

A. a $4,000 debit to Prepaid Rent.

B. a $4,000 credit to Rent Expense.

C. a $24,000 debit to Rent Expense.

D. a $4,000 credit to Prepaid Rent.

44. The adjusting entry to account for the use of supplies consists of 

A. a debit to Supplies Expense and a credit to Supplies.

B. a debit to Supplies and a credit to Supplies Expense.

C. a debit to Supplies and a credit to Accumulated Depreciation.

D. a debit to Accumulated Depreciation and a credit to Supplies.

45. The adjusting entry to account for the expiration of prepaid insurance consists of 

A. a debit to Insurance Expense and a credit to Prepaid Insurance.

B. a debit to Insurance Expense and a credit to Accumulated Depreciation.

C. a debit to Prepaid Insurance and a credit to Accumulated Depreciation.

D. a debit to Accumulated Depreciation and a credit to Prepaid Insurance.

46. The adjusting entry to account for the expiration of prepaid advertising consists of 

A. a debit to Prepaid Advertising and a credit to Advertising Expense.

B. a debit to Advertising Expense and a credit to Accumulated Depreciation.

C. a debit to Prepaid Advertising and a credit to Accumulated Depreciation.

D. a debit to Advertising Expense and a credit to Prepaid Advertising.

47. Which of the following statements is not correct? 

A. Generally accepted accounting principles require that the original cost of a long-term asset continue to appear in the asset account until the disposition of the asset.

B. The book value of a long-term asset is reduced each year as depreciation is recorded.

C. Buildings and trucks are examples of long-term assets.

D. Salvage value is computed by subtracting the accumulated depreciation from the cost of a long-term asset.

48. Which of the following statements is correct? 

A. The cost of supplies used is reported on the statement of owner’s equity.

B. The cost of supplies used represents an operating expense of the business.

C. Accumulated Depreciation–Equipment is presented in the Liabilities section of a balance sheet.

D. At the time of their acquisition, prepaid expenses are recorded in expense accounts.

49. On a worksheet, the adjusted balance of the Accumulated Depreciation account is extended to: 

A. the Income Statement Debit column.

B. the Income Statement Credit column.

C. the Balance Sheet Debit column.

D. the Balance Sheet Credit column.

50. On a worksheet, the adjusted balance of the Depreciation Expense account is extended to: 

A. the Income Statement Debit column.

B. the Income Statement Credit column.

C. the Balance Sheet Debit column.

D. the Balance Sheet Credit column.