101. On March 1, Hoffman paid in advance for four months' insurance. The necessary adjusting entry at March 31 includes which of the following?
A. A credit to Prepaid Insurance for $2,340.
B. A credit to Prepaid Insurance for $780.
C. A debit to Prepaid Insurance for $2,340.
D. A debit to Prepaid Insurance for $780.
$3,120/4 = $780
102. At March 31, the amount of supplies on hand is $520. What amount is reported in the January income statement for supplies expense?
A. $1,300.
B. $0.
C. $520.
D. $780.
$1,300 - $520 = $780
103. The equipment had an estimated useful life of five years. Compute the book value of the equipment at March 31, after the proper March adjustment is recorded.
A. $10,833.
B. $15,167.
C. $25,567.
D. $10,400
$26,000/60 = $433; $10,400 + $433 = $10,833; $26,000 - $10,833 = $15,167
104. Employees are owed $750 for services since the last payday in March, to be paid the first week in April. The amount to be reported in the March income statement for salaries expense is:
A. $7,800.
B. $750.
C. $ 7,050.
D. $8,550.
$7,800 + $750 = $8,550
105. On December 31, Louis Jeweler's made an adjusting entry to record $4,200 accrued interest payable on its mortgage. On January 10, the mortgage payment was made. This payment included interest charges of $6,300, $2,100 of which were applicable to the period from January 1 through January 10. In recording this mortgage payment the accountant should:
A. Debit Interest Expense $2,100 and debit Accrued Interest Payable $4,200.
B. Debit Interest Expense $6,300.
C. Debit Accrued Interest Payable $6,300.
D. Debit Interest Expense $2,100 and credit Accrued Interest Payable $4,200.
106. An asset purchased on January 1, 2006 for $60,000 that has an estimated life of 10 years will have a book value on December 31, 2009 of:
A. $60,000.
B. $24,000.
C. $36,000.
D. $42,000.
$60,000/10 = $6,000 ? 4 = $24,000; $60,000 - $24,000 = $36,000
107. If an asset was purchased on January 1, 2006 for $140,000 with an estimated life of 5 years, what is the accumulated depreciation at December 31, 2009?
A. $28,000.
B. $112,000.
C. $56,000.
D. $84,000.
$140,000/5 = $28,000 ? 4 = $112,000
108. Under accrual accounting, salaries earned by employees but not yet paid should be expensed
A. In the period in which they are earned.
B. In the period in which they are paid.
C. In the period with the higher earnings.
D. In the period with the lower earnings.
109. Under accrual accounting, Fees received in advance from customers should be shown as being earned
A. When cash is collected.
B. When services are performed or goods delivered.
C. When tax rates are low.
D. When tax rates are high.
110. Dolphin Co. received $1,500 in fees during 2009, 1/3 of which was earned in 2010, the rest was earned when received. The company should report which of the following amounts as income in 2009?
A. $1,500
B. $500
C. $1,000
D. $0
$1,500 ? 2/3 = $1,000