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QN=140 On May 1, 2009 Giltus Advertising Company received $1,500 from Julie Bee for advertising services to be completed April 30, 2010. The Cash receipt was recorded as unearned fees and at December 31, 2009, $1,000 of the fees had been earned. The adjusting entry on December 31 Year 1 should include:

• a. A debit to Unearned Fees for $500

• b. A credit to Unearned Fees for $500

• c. A credit to Earned Fees for $1,000.

• d. A debit to Earned Fees for $1,000

• e. A debit to Earned Fees for $500.

QN=141 The difference between the cost of an asset and the accumulated depreciation for that asset is called

• a. Depreciation Expense.

• b. Unearned Depreciation

• c. Prepaid Depreciation

• d. Depreciation Value

• e. Book Value

QN=142 Failure to make adjusting entries for prepaid expense will result in

• a. Overstatement of expenses

• b. Understatement of expenses

• c. Understatement of assets

• d. Overstatement of Liabilities

• e. Understatement of Liabilities

QN=143 A company's Office Supplies account shows a beginning balance of $600 and an ending balance of $400. If office supplies expense for the year is $3,100, what amount of office supplies was purchased during the period?

• a. $2,700.

• b. $2,900.

• c. $3,300.

• d. $3,500

• e. $3,700.

QN=144 If accrued salaries were recorded on December 31 with a credit to Salaries Payable, the entry to record payment of these wages on the following January 5 would include:

• a. A debit to Cash and a credit to Salaries Payable.

• b. A debit to Cash and a credit to Prepaid Salaries.

• c. A debit to Salaries Payable and a credit to Cash

• d. A debit to Salaries Payable and a credit to Salaries Expense

• e. No entry would be necessary on January 5.

QN=145 Which statement is true:

• a. Account payable is considered a liability on the balance sheet

• b. Account payable is considered a liability on the statement of owner equity

• c. Account payable is considered a liability on the income statement

• d. Account payable is considered a liability on the cash flow statement

• e. None of these

QN=146 The adjusting entry to record the earned but unpaid salaries of employees at the end of an accounting period is:

• a. Debit Unpaid Salaries and credit Salaries Payable

• b. Debit Salaries Payable and credit Salaries Expense.

• c. Debit Salaries Expense and credit Cash.

• d. Debit Salaries Expense and credit Salaries Payable.

• .e. Debit Cash and credit Salaries Expense.

QN=147 What is the proper adjusting entry at December 31, the end of the accounting period, if the balance in the prepaid insurance account is $7,750 before adjustment, and the unexpired amount per analysis of policies is, $3,250?

• a. Debit Insurance Expense, $3,250; credit Prepaid Insurance, $3,250.

• b. Debit Insurance Expense, $4,500; credit Prepaid Insurance, $4,500.

• c. Debit Prepaid Insurance, $4,500; credit Insurance Expense, $4,500.

• d. Debit Insurance Expense, $7,750; credit Prepaid Insurance, $7,750.

• e. Debit Cash, $7,750; Credit Prepaid Insurance, $7,750.

QN=148 Identity the consequences of not making adjustment for accrued expense

• a. Overstatement of liabilities

• b. Understatement of liabilities

• c. Overstatement of expenses

• d. Understatement of capital

• e. Overstatement of Assets

The balance in Tee Tax Services' office supplies account on February 1 and February 28 was $1,200 and $375, respectively. If the office supplies expense for the month is $1,900, what amount of office supplies was purchased during February?

• $1,075

• $1,500

• $1,525

• $2,325

• $3,100