Exam 1 Review

What is the normal balance of the equipment account, if equipment is purchased on credit?

• Debit

• Credit

Which of the following are not part of the triangle of Fraud?

• Opportunity

• Pressure

• Clawback

• Rationalization

Dividends are expenses and decrease Retained Earnings

• True

• False

The adjusting entry to record an accrued expense results in which of the following types of accounts being debited and credited?

• Asset/Revenue
• Asset/Liability
• Expense/Asset
• Expense/Liability

The adjusting entry to record an accrued revenue results in which of the following types of accounts being debited and credited?

• Asset/Revenue
• Asset/Liability
• Expense/Asset
• Expense/Liability

Which of the following do NOT have a negative effect on the owner's capital?

• Depreciation expense

• Adjusting entry for unearned revenue

• Owner's drawings

• Payment of liabilities

Which of the following accounts should be credited when closed to income summary?

• cash

• expenses

• revenue

• accounts payable

Which account is closed last?

• income summary

• dividends

• revenue

• expenses

Office Equipment was purchased on May 1, 2017 at a cost of 140,000 with a salvage value of 20,000. The equipment’s useful life is five years. How much is the depreciation expense on December 31, 2017.

• 24,000

• 16,000

• 6,000

• 28,000