Question

4.  Johnson Co. paid $2,400 for eight months' rent on the first day of the month.  At the end of the month, what adjusting entry must be made relating to this transaction?

a.  a debit to Rent Expense and a credit to Prepaid Rent for $300

b.  a debit to Prepaid Rent and a credit to Rent Expense for $300

c.  a debit to Rent Expense and a credit to Prepaid Rent for $2,100

d.  a debit to Prepaid Rent and a credit to Rent Expense for $2,100

5.  At Williams Co., total employee salaries are $6,000 each Friday for a 5-day work week (Monday through Friday).  Assuming the month ends on Monday, what adjusting entry must be made at the end of the month relating to employee salaries?  (Assume the employees earn the same amount daily over the 5 days.)

a.  a debit to Salaries Expense and a credit to Salaries Payable for $4,800

b.  a debit to Salaries Payable and a credit to Salaries Expense for $4,800

c.  a debit to Salaries Expense and a credit to Salaries Payable for $1,200

d.  a debit to Salaries Payable and a credit to Salaries Expense for $1,200

6.  Which of the following pairs of accounts would be found in a deferral adjusting entry?

a.  Accounts Receivable and Revenue

b.  Income Tax Expense and Income Taxes Payable

c.  Wages Expense and Wages Payable

d.  Depreciation Expense and Accumulated Depreciation

7.  An account that is not part of any of the adjusting entries is:

a.  Depreciation Expense                c.  Unearned Revenue

b.  Interest Payable                       d.  Cash

8. A company began the month with $900 of supplies, which was reflected in the Supplies account. $400 more

supplies were bought during the month and added to the Supplies account. At the end of the month, only $500 of supplies were actually still on hand. The entry to adjust the supplies account for supplies used during the month would be:

a.   debit Supplies and credit Supplies Expense for $800.

b.   debit Supplies Expense and credit Supplies for $500.

c.   debit Supplies Expense and credit Supplies for $800.

d.   debit Supplies and credit Supplies Expense for $500.

1.  James Co. was paid $4,500 in advance on the first day of  the month for 6 months of accounting services to be performed regularly throughout the 6-month period.  At the end of the month, what adjusting entry must be made relating to this transaction?

      a. Unearned Revenue            $750

                           Revenue                            $750

              b. Unearned Revenue         $3,750

                           Revenue                          $3,750

              c. Revenue                       $3,750

                           Unearned Revenue            $3,750

              d. Revenue                         $750

                           Unearned  Revenue              $750

3.   An accrual adjusting entry will always include a ‘receivable’ or ‘payable’ account.

a.  true                           b.  false

Answer 1

Ans 4 - Option a is correct,

When rent is paid in advance journal entry will be :

Prepaid Rent A/c Dr. 2400

To CAsh/ Bank A/c 2400

At the end of each month recognise rent exoense :

Rent Expenses A/c Dr. 300

To Prepaid Rent A/c 300

Ans 5. Option c is correct,

Since daily salary is 6000/5 = 1200

If ,month ends on monday then only one day salary wiil be recognised as expense and also since payment is made only at the end of the week thus one day salary expense will be recognised as payable as per accrual based accounting system.:

Salary A/c Dr. 1200

To Salary Payable 1200

Ans 7 Option a is correct, Depreciation.

Ans 8 Option c is correct ,