Question 2

1. Jupiter Company signed a one-year $36,000 note payable at 8% interest on March 1, 2019. How much interest expense must be accrued on May 31, 2019? (Round any intermediate calculations to two decimal places, and your final answer to the nearest whole number.)

   		$2,880
   		$1,080
   		$720
   Question 3 Anthony Delivery Service has a weekly payroll of $34,000. December 31 falls on Tuesday and Anthony will pay its employees the following Monday (January 6) for the previous full week. Assume that Anthony has a five-day workweek and has an unadjusted balance in Salaries Expense of $925,000 at December 31. What is the December 31 balance of Salaries Expense after adjusting entries are recorded and posted? $925,000 $959,000 $945,400 $938,600		$360

Question 4

1. On January 1, 2017, the Accounts Receivable of Martha Company had a debit balance of $190,000. During January, the company provided services for $400,000 on account. The company collected $240,000 from its customers on account in January. What was the ending balance in the Accounts Receivable account at the end of January?

   		$160,000
   		$590,000
   		$350,000
   		$400,000

Question 5

1. Which of the following statements is TRUE of accrual basis accounting?

   		Accrual basis accounting is required by Generally Accepted Accounting Principles (GAAP).
   		Accrual basis accounting records expenses only when cash has been paid for them.
   		Accrual basis accounting records revenue only when cash is received.
   		Accrual basis accounting always results in greater net income than cash basis accounting.

Question 6

1. ABC Tax Planning Service started business in January 2018. The company rented an office for $1,800 per month starting from January 1, 2018. On that day, ABC prepaid the rent through June 30. The company makes adjusting entries at the end of each month. What is the balance in the Prepaid Rent account as of April 30, 2018?

   		$3,600
   		$300
   		$1,800
   		$900

Question 7

1. A business purchased equipment for $145,000 on January 1, 2019. The equipment will be depreciated over the five years of its estimated useful life using the straight-line depreciation method. The business records depreciation once a year on December 31. Which of the following is the adjusting entry required to record depreciation on the equipment for the year 2019? (Assume the residual value of the acquired equipment to be zero.)

   		Debit $145,000 to Equipment, and credit $145,000 to Cash.
   		Debit $145,000 to Depreciation Expense-Equipment, and credit $145,000 to Accumulated Depreciation-Equipment.
   		Debit $29,000 to Depreciation Expense-Equipment, and credit $29,000 to Accumulated Depreciation-Equipment.
   		Debit $29,000 to Depreciation Expense, and credit $29,000 to Equipment.

Question 8

1. If a company is using accrual basis accounting, when should it record revenue?

   		When cash is received, even though services may be performed at a later date
   		When services are performed, even though cash may be received at a later date
   		Before services are performed
   		When cash is received, 30 days after the completion of the services

Question 9

1. On September 1, 2018, Real Estate Professionals Company paid $5,000 in advance for an eight-month rental space covering the period of September 1, 2018 through April 30, 2019. The deferred expense was initially recorded as an asset. The company makes adjusting entries once a year at year-end. The adjusting entry on December 31, 2018 would include a __________.

   		debit of $5,000 to Cash
   		credit of $5,000 to Prepaid Rent
   		debit of $2,500 to Rent Expense
   		credit of $2,500 to Rent Expense

Question 10

1. When does a company account for revenue if it uses cash basis accounting?

   		When services are performed, even though cash may be received at a later date
   		Before services are performed
   		When the services are being performed
   		When cash is received, either prior to, at the time of, or after the services are perform

Question 11

1. Hudson Landscaping Service bought equipment for $10,800 on January 1, 2019. It has an estimated useful life of five years and zero residual value. Hudson uses the straight-line method to calculate depreciation and records depreciation expense in the books at the end of every month. As of June 30, 2019, the book value of this equipment shown on its balance sheet will be __________.

   		$9,720
   		$10,800
   		$11,880
   		$10,980

Question 12

1. Mercury Company sells tickets in advance for its weekly productions and records the proceeds as Unearned Revenue. At the end of each month, the company makes an adjusting entry to account for the tickets used during the month (ticket revenue.) On March 1, the Unearned Revenue account had a credit balance of $5,000. During March, Mercury sold 500 tickets at $40 each, and 450 tickets were used during the month. What is the balance in Unearned Revenue at the end of March?

   		Credit balance of $7,000
   		Debit balance of $5,000
   		Credit balance of $5,000
   		Debit balance of $7,000

Question 13

1. Which of the following accounting elements does the matching principle help to match?

   		Revenues and liabilities
   		Expenses and assets
   		Expenses and revenues
   		Expenses and liabilities

Question 14

1. The asset account, Office Supplies had a beginning balance of $5,700. During the accounting period, office supplies were purchased, on account, for $5,100. A physical count, on the last day of the accounting period, shows $2,000 of office supplies on hand. What is the amount of Supplies Expense for the accounting period?

   		$5,100
   		$2,600
   		$8,800
   		$3,700

Question 15

1. Accumulated depreciation is a(n) __________ account and carries a normal __________ balance.

   		revenue; debit
   		expense; debit
   		contra asset; credit
   		liability; credit

Question 16

1. Which of the following is considered a fiscal year?

   		Six months
   		Three months
   		Twelve months
   		Four months

Question 17

1. Advance cash payments of future expenses are called __________.

   		accrued revenues
   		deferred expenses
   		deferred revenues
   		accrued expenses

Question 18

1. Princeton Financial Services Company purchased computers that are to be used in its consulting services. Based on the matching principle, what account, other than Computers, should appear on the balance sheet as of December 31 of that same year?

   		Depreciation Expense – Equipment
   		Service Revenue
   		Accumulated Depreciation – Equipment
   		Equipment Expense

Question 19

1. Which of the following accounting terms assumes that a business’s activities can be divided into small segments and that financial statements can be prepared for specific periods of time?

   		Adjusting entry concept
   		Economic entity concept
   		Matching principle
   		Time period concept