21) A company using the cash basis of accounting pays for one year of rent in advance. The entry to record this transaction will involve a debit to:
A) Deferred Rent Revenue
B) Rent Revenue
C) Rent Expense
D) Prepaid Rent
22) Adjusting entries:
A) are prepared at the option of the accountant
B) are not needed under the accrual basis of accounting
C) are prepared at the beginning of the accounting period to update all accounts
D) are prepared at the end of the accounting period to update certain accounts
23) Which of the following is
not
one of the three basic categories of adjusting entries?
A) accruals
B) depreciation
C) deferrals
D) expiration
24) The adjusting entry for supplies used during the current period will involve a credit to:
A) Supplies
B) Supplies Expense
C) Accrued Supplies
D) Supplies Revenue
25) An adjustment of an asset for which the business paid cash in advance is:
A) a deferral
B) an accrual
C) unearned revenue
D) revenue recognition
26) The adjusting entry to allocate the cost of a plant asset such as equipment involves a credit to:
A) Equipment Expense
B) Depreciation Expense
C) Accumulated Equipment
D) Accumulated Depreciation
27) The adjusting entry to record salaries owed to employees but not paid until the next accounting period involves a credit to:
A) Salary Expense
B) Unearned Salaries
C) Salary Payable
D) Deferred Salary
28) On September 1 of the current year, Prepaid Rent was debited for $3,000. This amount represents payment for one year of rent, paid in advance. The adjusting entry on December 31 will involve a:
A) debit to Rent Expense for $2,000
B) debit to Rent Expense for $1,000
C) debit to Rent Payable for $2,000
D) debit to Rent Payable for $1,000
29) On October 31 of the current year, a contract was signed and a cheque received for services to be performed by October 31 of the following year. The Unearned Service Revenue account was credited for $4,800. Assuming services were performed evenly during the remainder of the year, the adjusting entry on December 31 will involve a:
A) credit to Unearned Service Revenue $800
B) credit to Service Revenue for $4,000
C) credit to Service Revenue $800
D) debit to Unearned Service Revenue $4,000
30) On December 31, 2010, salaries owed to employees total $5,650 and will be paid on January 4, 2011. The adjusting entry prepared on December 31, 2010, includes a:
A) debit to Salary Expense for $5,650
B) debit to Salary Payable for $5,650
C) credit to Cash for $5,650
D) credit to Salary Expense for $5,650