Acct 5312 McGraw Ch4

18. Martin & Associates borrowed $5,000 on April 1, 2013 at 8% interest with both principal and interest due on March 31, 2014. How much should be in the firm's interest payable account at December 31, 2013? A. $300 B. $400 C. $0 D. $333

$400

12. Sage, Inc. has 20 employees who work Monday through Friday each week; each employee earns $100 per day and is paid every Friday. The end of the accounting period is on a Wednesday. How much wages expense should the firm accrue at the end of the period? A. $2,000 B. $1,000 C. $0 D. $6,000

$6,000

1. An expanded version of the accounting equation could be: A. Assets + Revenues = Liabilities + Stockholders' Equity - Expenses B. Assets - Liabilities = Paid-in Capital - Revenues - Expenses C. Assets = Liabilities + Paid-in Capital + Beginning Retained Earnings + Revenues - Expenses - Dividends D. Assets = Liabilities + Paid-in Capital - Revenues + Expenses

C. Assets = Liabilities + Paid-in Capital + Beginning Retained Earnings + Revenues - Expenses - Dividends

10. An engineering consultant provided $300 of services to a client; the client paid $50 when the bill was submitted and will pay the balance within a week. The consultant will record this transaction by: A. Option A B. Option B C. Option C D. Option D

Debit Cash, Fees Receivable Credit Revenue

To accrue $3,200 of employee salaries for the last week of February, the employer's journal entry is:

Debit Salary Expense Credit Salary Payable

Martin & Associates borrowed $5,000 on April 1, 2013 at 8% interest with both principal and interest due on March 31, 2014. Which of the following journal entries should the firm use to accrue interest at the end of each month?

Debit interest expense Credit interest payable

Martin & Associates borrowed $5,000 on April 1, 2013 at 8% interest with both principal and interest due on March 31, 2014. Which of the following journal entries should the firm use to record the payment of interest on March 31, 2014?

Debit interest payable Credit cash

When a firm purchases supplies for use in its business, and the cost of the supplies purchased is recorded as an asset, the following adjustment to recognize the cost of supplies used will probably be required:

Debit supplies expense Credit supplies

13. Which of the following is not one of the 5 questions of transaction analysis? A. What's going on? B. Which accounts are affected? C. Is this an accrual? D. Does the balance sheet balance? E. Does my analysis make sense?

Is this an accrual?

22. The Interest Receivable account for February showed transactions totaling $8,500 and an adjustment of $11,200. A. The transactions probably resulted from accruing interest income earned. B. The transactions were probably entered on the credit side of the account. C. The adjustment was probably for cash receipts of interest receivable accrued in prior months. D. The balance in the interest receivable account decreased $2,700.

The transactions were probably entered on the credit side of the account.

23. The balance in the Wages Payable account increased from $12,200 at the beginning of the month to $15,000 at the end of the month. Wages accrued during the month totaled $61,000. A. Wages paid during the month totaled $58,200. B. Wages paid during the month totaled $64,800. C. Wages expense for the month totaled $58,200. D. Wages expense for the month totaled $76,000.

Wages paid during the month totaled $58,200.

16. Wisdom Co. has a note payable to its bank. An adjustment is likely to be required on Wisdom's books at the end of every month that the loan is outstanding to record the: A. amount of interest paid during the month. B. amount of total interest to be paid when the note is paid off. C. amount of principal payable at the maturity date of the note. D. accrued interest expense for the month.

accrued interest expense for the month.

25. When a firm purchases supplies for its business: A. the supplies account should always be debited. B. the supplies expense account should always be debited. C. either the supplies account or the supplies expense account should be credited. D. an adjustment will probably be required as supplies are used.

an adjustment will probably be required as supplies are used.

20. The accountant at Abco, Inc. made an adjusting entry at the end of February to accrue interest on a note receivable from a customer. The effect of this entry is to: A. decrease ROI for February. B. increase ROI for February. C. decrease working capital at February 28. D. decrease the acid-test ratio at February 28.

increase ROI for February.

7. A credit entry will: A. increase an asset account. B. increase a liability account. C. decrease paid-in capital. D. increase an expense account.

increase a liability account.

6. A debit entry will: A. decrease an asset account. B. increase a liability account. C. increase paid-in capital. D. increase an expense account.

increase an expense account.

2. In the seller's records, the sale of merchandise on account would: A. increase assets and increase expenses. B. increase assets and decrease liabilities. C. increase assets and increase paid-in capital. D. increase assets and decrease revenues.

increase assets and increase expenses.

4. In the buyer's records, the purchase of merchandise on account would: A. increase assets and increase expenses. B. increase assets and increase liabilities. C. increase liabilities and increase paid-in capital. D. have no effect on total assets.

increase assets and increase liabilities.

5. A newspaper ad submitted and published this week, with the agreement to get paid for it next week would, in the newspaper's records: A. increase assets and increase revenues. B. increase assets and decrease liabilities. C. increase assets and increase expenses. D. have no effect on total assets.

increase assets and increase revenues.

3. In an advertiser's records, a newspaper ad submitted and published this week with the agreement to pay for it next week would: A. decrease assets and decrease expenses. B. increase liabilities and increase expenses. C. decrease assets and increase revenue. D. increase assets and decrease liabilities.

increase liabilities and increase expenses.

26. The effect of an adjustment on the financial statements is usually to: A. make the balance sheet balance. B. increase net income. C. increase the accuracy of both the balance sheet and income statement. D. match revenues and assets.

increase the accuracy of both the balance sheet and income statement.

A credit entry will: A. always decrease the account balance. B. always increase the account balance. C. increase the balance of a revenue account. D. increase the balance of an expense account.

increase the balance of a revenue account.

9. A debit entry will: A. always decrease the account balance. B. always increase the account balance. C. increase the balance of a revenue account. D. increase the balance of an expense account.

increase the balance of an expense account.

21. The accounting concept/principle being applied when an adjustment is made is usually: A. matching revenue and expense. B. consistency. C. original cost. D. materiality.

matching revenue and expense.

15. A journal entry recording an accrual: A. results in a better matching of revenues and expenses. B. will involve a debit or credit to cash. C. will affect balance sheet accounts only. D. will most likely include a debit to a liability account.

results in a better matching of revenues and expenses.

14. The effect of an adjustment is: A. to correct an entry that was not in balance. B. to increase the accuracy of the financial statements. C. to record transactions not previously recorded. D. to close the books.

to increase the accuracy of the financial statements.