107.If office equipment is sold at cost in exchange for a promissory note,
a.
total liabilities increase.
b.
total assets remain the same.
c.
total liabilities and stockholders’ equity decrease.
d.
total assets decrease.
108.The declaration and payment of a dividend will
a.
decrease net income.
b.
not affect total assets.
c.
decrease stockholders’ equity.
d.
increase liabilities.
109.Payment on a portion of Accounts Payable will
a.
decrease net income.
b.
increase total liabilities.
c.
not affect stockholders’ equity.
d.
not affect total assets.
110.A transaction in which six months’ rent is paid in advance results in a credit to Cash and a debit to
a.
Rent Revenue.
b.
Rent Receivable.
c.
Rent Expense.
d.
Prepaid Rent.
111.Which of the following events does not require a journal entry?
a.
Agreement to perform a service at a future date
b.
Purchase of a one-year insurance policy
c.
Performance of a service agreed to at a past date
d.
Payment for a service performed previously
112.Which of the following events does not result in the recording of an expense?
a.
Purchase of gasoline for fill-up of a company car
b.
Payment of wages
c.
Receipt of a bill from the telephone company
d.
Payment of a dividend
113.A company that receives money in advance of performing a service
a.
debits Cash and credits Unearned Revenue.
b.
debits Unearned Revenue and credits Accounts Receivable.
c.
debits Cash and credits Prepaid Fees.
d.
debits Cash and credits Fees Earned.
114.When a company has performed a service but has not yet received payment, it
a.
debits Revenue from Services and credits Accounts Receivable.
b.
makes no entry until the cash is received.
c.
debits Revenue from Services and credits Accounts Payable.
d.
debits Accounts Receivable and credits Revenue from Services.
115.When a company receives an electric bill but does not pay it right away, it should
a.
make no entry until the bill is paid.
b.
debit Utilities Expense and credit Accounts Receivable.
c.
debit Accounts Payable and credit Utilities Expense.
d.
debit Utilities Expense and credit Accounts Payable.
116.When a magazine company receives advance payment for a subscription, it
a.
debits Prepaid Subscriptions and credits Cash.
b.
debits Unearned Subscriptions Revenue and credits Cash.
c.
debits Cash and credits Unearned Subscriptions Revenue.
d.
debits Cash and credits Subscriptions Revenue.
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