Multiple Choice Question 112
Jawbreaker Company paid $940 on account to a creditor. The transaction was erroneously recorded as
a debit to Cash of $490 and a credit to Accounts Receivable, $490. The correcting entry is
Accounts Receivable........................................................................... 490
Cash...............................................................................................
490
Accounts Payable............................................................................... 940
Cash...............................................................................................
940
Accounts Receivable........................................................................... 490
Accounts Payable.............................................................................
490
Accounts Receivable........................................................................... 490
Accounts Payable............................................................................... 940
Cash...............................................................................................
1,430
Multiple Choice Question 111
Zen Arcade paid the weekly payroll on January 2 by debiting Salaries and Wages Expense for $47,000.
The accountant preparing the payroll entry overlooked the fact that Salaries and Wages Expense of
$27,000 had been accrued at year end on December 31. The correcting entry is
Salaries and Wages
Payable...............................................................................
27,000
Salaries and Wages
Expense.............................................................................
Salaries and Wages
Payable...............................................................................
27,000
27,00
0
Cash........................................................................................................
.......
27,00
0
Cash......................................................................................................... 20,00
.......
0
Salaries and Wages
Expense.............................................................................
20,00
0
Cash......................................................................................................... 27,00
.......
0
Salaries and Wages
Expense.............................................................................
Multiple Choice Question 81
The income statement for the year 2014 of Fugazi Co. contains the following information:
27,00
0
Revenues
$70,000
Expenses:
Salaries and Wages Expense $45,000
Rent Expense
12,000
Advertising Expense
10,000
Supplies Expense
6,000
Utilities Expense
2,500
Insurance Expense
2,000
Total expenses
77,500
Net income (loss)
($7,500)
The entry to close the expense accounts includes a
debit to Income Summary for $7,500.
debit to Income Summary for $77,500.
credit to Income Summary for $7,500.
debit to Wages Expense for $2,500.
Multiple Choice Question 122
The following information is for Bright Eyes Auto Supplies:
Bright Eyes Auto Supplies
Balance Sheet
December 31, 2014
Cash
$ 40,000
Prepaid Insurance
80,000
Accounts Payable
Salaries and Wages Payable
$ 130,000
50,000
Accounts Receivable
100,000
Mortgage Payable
150,000
Inventory
140,000
Total Liabilities
330,000
Land Held for Investment
180,000
Land
250,000
Building
$200,000
Less Accumulated
Depreciation
Trademark
Total Assets
Owner’s Capital
(60,000)
740,000
140,000
140,000
$1,070,000
Total Liabilities and
Owner’sEquity
The total dollar amount of assets to be classified as investments is
$1,070,000
$180,000.
$250,000.
$0.
$140,000.
Multiple Choice Question 121
The following information is for Bright Eyes Auto Supplies:
Bright Eyes Auto Supplies
Balance Sheet
December 31, 2014
Cash
$ 40,000
Prepaid Insurance
80,000
Accounts Payable
Salaries and Wages Payable
$ 130,000
50,000
Accounts Receivable
100,000
Mortgage Payable
150,000
Inventory
140,000
Total Liabilities
330,000
Land Held for Investment
180,000
Land
250,000
Building
$200,000
Less Accumulated
Depreciation
Owner’s Capital
(60,000)
Trademark
Total Assets
740,000
140,000
140,000
$1,070,000
Total Liabilities and
Owner’sEquity
$1,070,000
The total dollar amount of assets to be classified as property, plant, and equipment is
$630,000.
$450,000.
$390,000.
$570,000.
Multiple Choice Question 94
Which account listed below would be double ruled in the ledger as part of the closing process?
Accumulated Depreciation—Equipment
Cash
Owner's Drawings
Owner's Capital
Multiple Choice Question 108
If errors occur in the recording process, they
should be corrected as soon as they are discovered.
should be corrected as adjustments at the end of the period.
cannot be corrected until the next accounting period.
should be corrected when preparing closing entries.
Multiple Choice Question 148
Which statement about long-term investments is not true?
They are not currently used in the operation of the business.
They will be held for more than one year.
They include investments in stock of other companies and land held for future use.
They can never include cash accounts.
Multiple Choice Question 59
Closing entries are
journalized in the general journal.
an optional step in the accounting cycle.
made to close permanent or real accounts.
posted to the ledger accounts from the worksheet.
Multiple Choice Question 102
Which of the following steps in the accounting cycle may be performed most frequently?
Prepare a trial balance.
Prepare a post-closing trial balance.
Journalize closing entries.
Post closing entries.
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