1. The current book value of the machine is (a) $12,000.
2. The adjusting entry required to record depreciation on the equipment for the year 2019 is (c) Debit $29,000 to Depreciation Expense—Equipment, and credit $29,000 to Accumulated Depreciation—Equipment.
3. The adjusting entry on December 31, 2018 would include a (c) debit of $2,500 to Rent Expense.
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4. The interest expense that must be accrued on May 31, 2019 is (c) $720.
5. The recorded entry if the company uses accrual basis accounting (a)
| Cash | 1,000 | |
| Accounts Receivable | 1,000 |
6. The balance in Unearned Revenue at the end of March is (a) Credit balance of $7,000.
7. The TRUE statement of accrual basis accounting is (a) Accrual basis accounting is required by Generally Accepted Accounting Principles (GAAP).
8. If a company is using accrual basis accounting, it should record revenue (b) when services are performed, even though cash may be received at a later date.
9. A company account for revenue if it uses cash basis accounting (d) when cash is received, either prior to, at the time of, or after the services are performed.
10. The balance in the Prepaid Rent account as of April 30, 2018 is (a) $3,600.
11 . The December 31 balance of Salaries Expense after adjusting entries are recorded and posted is (d) $ 938,600
12. The ending balance in the Accounts Receivable account at the end of January is (c) $350,000.
13. Accumulated depreciation is a (c) contra asset account and carries a normal credit balance. (c) contra asset; credit
14. The amount of Supplies Expense for the accounting period is (c) $8,800.
15. (d) Time period concept assumes that a business's activities can be divided into small segments and that financial statements can be prepared for specific periods of time.
16. Advance cash payments of future expenses are called (b) deferred expenses
17. Based on the matching principle, the account, other than Computers, that should appear on the balance sheet as of December 31 of that same year is (c) Accumulated Depreciation – Equipment.
18. The allocation of a plant asset's cost to expense over its useful life is called (d) Depreciation.
19. (c) Twelve months is considered a fiscal year.
20. The matching principle helps to match (c) Expenses and revenues.
