21.Factors that shape an accounting information system include the a. nature of the business. b. size of the firm. c.

volume of data to be handled. d. all of these. 22. Maintaining a set of accounting records is a. optional. b. required by the Internal Revenue Service. c. required by the Foreign orrupt !ractices "ct. d. required by the Internal Revenue Service and the Foreign orrupt !ractices "ct. 2#. $ebit always means a. right side of an account. b. increase. c. decrease. d. none of these. 2%. "n accounting record into &hich the essential facts and figures in connection &ith all transactions are initially recorded is called the a. ledger. b. account. c. trial balance. d. none of these. 2'. " trial balance a. proves that debits and credits are equal in the ledger. b. supplies a listing of open accounts and their balances that are used in preparing financial statements. c. is normally prepared three times in the accounting cycle. d. all of these. 2(. )hich of the follo&ing is a real *permanent+ account, a. -ood&ill b. Sales c. "ccounts Receivable d. .oth -ood&ill and "ccounts Receivable 2/. )hich of the follo&ing is a nominal *temporary+ account, a. 0nearned Revenue b. Salary 12pense c. Inventory d. Retained 1arnings 23. 4ominal accounts are also called a. temporary accounts. b. permanent accounts. c. real accounts. d. none of these. 25. 6he double7entry accounting system means a. 1ach transaction is recorded &ith t&o 8ournal entries. b. 1ach item is recorded in a 8ournal entry9 then in a general ledger account. c. 6he dual effect of each transaction is recorded &ith a debit and a credit. d. More than one of the above. #:. )hen a corporation pays a note payable and interest9 a. the account notes payable &ill be increased. b. the account interest expense &ill be decreased. c. they &ill debit notes payable and interest expense.

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d. they &ill debit cash. Stoc;holders< equity is not affected by all a. cash receipts. b. dividends. c. revenues. d. e2penses. 6he debit and credit analysis of a transaction normally ta;es place a. before an entry is recorded in a 8ournal. b. &hen the entry is posted to the ledger. c. &hen the trial balance is prepared. d. at some other point in the accounting cycle. 6he accounting equation must remain in balance a. throughout each step in the accounting cycle. b. only &hen 8ournal entries are recorded. c. only at the time the trial balance is prepared. d. only &hen formal financial statements are prepared. 6he difference bet&een the accounting process and the accounting cycle is a. the accounting process results in the preparation of financial statements9 &hereas the accounting cycle is concerned &ith recording business transactions. b. the accounting cycle represents the steps ta;en to accomplish the accounting process. c. the accounting process represents the steps ta;en to accomplish the accounting cycle. d. merely semantic9 because both concepts refer to the same thing. "n optional step in the accounting cycle is the preparation of a. ad8usting entries. b. closing entries. c. a statement of cash flo&s. d. a post7closing trial balance. )hich of the follo&ing criteria must be met before an event or item should be recorded for accounting purposes, a. 6he event or item can be measured ob8ectively in financial terms. b. 6he event or item is relevant and reliable. c. 6he event or item is an element. d. "ll of these must be met. )hich of the follo&ing is a recordable event or item, a. hanges in managerial policy b. 6he value of human resources c. hanges in personnel d. 4one of these )hich of the follo&ing is not an internal event, a. $epreciation b. 0sing ra& materials in the production process c. $ividend declaration and subsequent payment d. "ll of these are internal transactions. 12ternal events do not include a. interaction bet&een an entity and its environment. b. a change in the price of a good or service that an entity buys or sells9 a flood or earthqua;e. c. improvement in technology by a competitor. d. using buildings and machinery in operations.

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" trial balance may prove that debits and credits are equal9 but a. an amount could be entered in the &rong account. b. a transaction could have been entered t&ice. c. a transaction could have been omitted. d. all of these. " general 8ournal a. chronologically lists transactions and other events9 e2pressed in terms of debits and credits. b. contains one record for each of the asset9 liability9 stoc;holders< equity9 revenue9 and e2pense accounts. c. lists all the increases and decreases in each account in one place. d. contains only ad8usting entries. " 8ournal entry to record the sale of inventory on account &ill include a a. debit to inventory. b. debit to accounts receivable. c. debit to sales. d. credit to cost of goods sold. " 8ournal entry to record a payment on account &ill include a a. debit to accounts receivable. b. credit to accounts receivable. c. debit to accounts payable. d. credit to accounts payable. " 8ournal entry to record a receipt of rent revenue in advance &ill include a a. debit to rent revenue. b. credit to rent revenue. c. credit to cash. d. credit to unearned rent. )hich of the follo&ing errors &ill cause an imbalance in the trial balance, a. =mission of a transaction in the 8ournal. b. !osting an entire 8ournal entry t&ice to the ledger. c. !osting a credit of >/2: to "ccounts !ayable as a credit of >/2: to "ccounts Receivable. d. ?isting the balance of an account &ith a debit balance in the credit column of the trial balance. )hich of the follo&ing is not a principal purpose of an unad8usted trial balance, a. It proves that debits and credits of equal amounts are in the ledger. b. It is the basis for any ad8ustments to the account balances. c. It supplies a listing of open accounts and their balances. d. It proves that debits and credits &ere properly entered in the ledger accounts. "n ad8usting entry should never include a. a debit to an e2pense account and a credit to a liability account. b. a debit to an e2pense account and a credit to a revenue account. c. a debit to a liability account and a credit to revenue account. d. a debit to a revenue account and a credit to a liability account. )hich of the follo&ing is an e2ample of an accrued e2pense, a. =ffice supplies purchased at the beginning of the year and debited to an e2pense account. b. !roperty ta2es incurred during the year9 to be paid in the first quarter of the subsequent year.

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c. $epreciation e2pense d. Rent earned during the period9 to be received at the end of the year )hich of the follo&ing statements is associated &ith the accrual basis of accounting, a. 6he timing of cash receipts and disbursements is emphasized. b. " minimum amount of record ;eeping is required. c. 6his method is used less frequently by businesses than the cash method of accounting. d. Revenues are recognized in the period they are earned9 regardless of the time period the cash is received. "n ad8usting entry to record an accrued e2pense involves a debit to a*an+@ a. e2pense account and a credit to a prepaid account. b. e2pense account and a credit to ash. c. e2pense account and a credit to a liability account. d. liability account and a credit to an e2pense account. 6he failure to properly record an ad8usting entry to accrue an e2pense &ill result in an@ a. understatement of e2penses and an understatement of liabilities. b. understatement of e2penses and an overstatement of liabilities. c. understatement of e2penses and an overstatement of assets. d. overstatement of e2penses and an understatement of assets. )hich of the follo&ing properly describes a deferral, a. ash is received after revenue is earned. b. ash is received before revenue is earned. c. ash is paid after e2pense is incurred. d. ash is paid in the same time period that an e2pense is incurred. 6he failure to properly record an ad8usting entry to accrue a revenue item &ill result in an@ a. understatement of revenues and an understatement of liabilities. b. overstatement of revenues and an overstatement of liabilities. c. overstatement of revenues and an overstatement of assets. d. understatement of revenues and an understatement of assets. 6he omission of the ad8usting entry to record depreciation e2pense &ill result in an@ a. overstatement of assets and an overstatement of o&nersA equity. b. understatement of assets and an understatement of o&nerAs equity. c. overstatement of assets and an overstatement of liabilities. d. overstatement of liabilities and an understatement of o&nersA equity. "d8ustments are often prepared a. after the balance sheet date9 but dated as of the balance sheet date. b. after the balance sheet date9 and dated after the balance sheet date. c. before the balance sheet date9 but dated as of the balance sheet date. d. before the balance sheet date9 and dated after the balance sheet date. "t the time a company prepays a cost a. it debits an asset account to sho& the service or benefit it &ill receive in the future. b. it debits an e2pense account to match the e2pense against revenues earned. c. its credits a liability account to sho& the obligation to pay for the service in the future. d. more than one of the above. Bo& do these prepaid e2penses e2pire, Rent Supplies a. )ith the passage of time 6hrough use and consumption b. )ith the passage of time )ith the passage of time c. 6hrough use and consumption 6hrough use and consumption d. 6hrough use and consumption )ith the passage of time

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Recording the ad8usting entry for depreciation has the same effect as recording the ad8usting entry for a. an unearned revenue. b. a prepaid e2pense. c. an accrued revenue. d. an accrued e2pense. 0nearned revenue on the boo;s of one company is li;ely to be a. a prepaid e2pense on the boo;s of the company that made the advance payment. b. an unearned revenue on the boo;s of the company that made the advance payment. c. an accrued e2pense on the boo;s of the company that made the advance payment. d. an accrued revenue on the boo;s of the company that made the advance payment. 6o compute interest e2pense for an ad8usting entry9 the formula is *principal C annual rate C a fraction+. 6he numerator and denominator of the fraction are@ Numerator Denominator a. ?ength of time note has been outstanding 12 months b. ?ength of note 12 months c. ?ength of time until note matures ?ength of note d. ?ength of time note has been outstanding ?ength of note "d8usting entries are necessary to 1. obtain a proper matching of revenue and e2pense. 2. achieve an accurate statement of assets and equities. #. ad8ust assets and liabilities to their fair mar;et value. a. 1 b. 2 c. # d. 1 and 2 )hy are certain costs of doing business capitalized &hen incurred and then depreciated or amortized over subsequent accounting cycles, a. 6o reduce the federal income ta2 liability b. 6o aid management in cash7flo& analysis c. 6o match the costs of production &ith revenues as earned d. 6o adhere to the accounting constraint of conservatism )hen an item of e2pense is paid and recorded in advance9 it is normally called a*n+ a. prepaid e2pense. b. accrued e2pense. c. estimated e2pense. d. cash e2pense. )hen an item of revenue or e2pense has been earned or incurred but not yet collected or paid9 it is normally called a*n+ DDDDDDDDDDDD revenue or e2pense. a. prepaid b. ad8usted c. estimated d. none of these )hen an item of revenue is collected and recorded in advance9 it is normally called a*n+ DDDDDDDDDDD revenue. a. accrued b. prepaid c. unearned d. cash "n accrued e2pense can best be described as an amount a. paid and currently matched &ith earnings.

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b. paid and not currently matched &ith earnings. c. not paid and not currently matched &ith earnings. d. not paid and currently matched &ith earnings. If9 during an accounting period9 an e2pense item has been incurred and consumed but not yet paid for or recorded9 then the end7of7period ad8usting entry &ould involve a. a liability account and an asset account. b. an asset or contra asset account and an e2pense account. c. a liability account and an e2pense account. d. a receivable account and a revenue account. )hich of the follo&ing must be considered in estimating depreciation on an asset for an accounting period, a. 6he original cost of the asset b. Its useful life c. 6he decline of its fair mar;et value d. .oth the original cost of the asset and its useful life. )hich of the follo&ing &ould not be a correct form for an ad8usting entry, a. " debit to a revenue and a credit to a liability b. " debit to an e2pense and a credit to a liability c. " debit to a liability and a credit to a revenue d. " debit to an asset and a credit to a liability Eear7end net assets &ould be overstated and current e2penses &ould be understated as a result of failure to record &hich of the follo&ing ad8usting entries, a. 12piration of prepaid insurance b. $epreciation of fi2ed assets c. "ccrued &ages payable d. "ll of these " prepaid e2pense can best be described as an amount a. paid and currently matched &ith revenues. b. paid and not currently matched &ith revenues. c. not paid and currently matched &ith revenues. d. not paid and not currently matched &ith revenues. "n accrued revenue can best be described as an amount a. collected and currently matched &ith e2penses. b. collected and not currently matched &ith e2penses. c. not collected and currently matched &ith e2penses. d. not collected and not currently matched &ith e2penses. "n unearned revenue can best be described as an amount a. collected and currently matched &ith e2penses. b. collected and not currently matched &ith e2penses. c. not collected and currently matched &ith e2penses. d. not collected and not currently matched &ith e2penses. "n ad8usted trial balance a. is prepared after the financial statements are completed. b. proves the equality of the total debit balances and total credit balances of ledger accounts after all ad8ustments have been made. c. is a required financial statement under generally accepted accounting principles. d. cannot be used to prepare financial statements. )hich type of account is al&ays debited during the closing process, a. $ividends. b. 12pense. c. Revenue.

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d. Retained earnings. )hich of the follo&ing statements best describes the purpose of closing entries, a. 6o faciliate posting and ta;ing a trial balance. b. 6o determine the amount of net income or net loss for the period. c. 6o reduce the balances of revenue and e2pense accounts to zero so that they may be used to accumulate the revenues and e2penses of the ne2t period. d. 6o complete the record of various transactions that &ere started in a prior period. If ending accounts receivable e2ceeds the beginning accounts receivable@ a. cash collections during the period e2ceed the amount of revenue earned. b. net income for the period is less than the amount of cash basis income. c. no cash &as collected during the period. d. cash collections during the year are less than the amount of revenue earned. 0nder the cash basis of accounting9 revenues are recorded a. &hen they are earned and realized. b. &hen they are earned and realizable. c. &hen they are earned. d. &hen they are realized. )hen converting from cash basis to accrual7basis accounting9 &hich of the follo&ing ad8ustments should be made to cash receipts from customers to determine accrual basis service revenue, a. Subtract ending accounts receivable. b. Subtract beginning unearned service revenue. c. "dd ending accounts receivable. d. "dd cash sales. )hen converting from cash basis to accrual basis accounting9 &hich of the follo&ing ad8ustments should be made to cash paid for operating e2penses to determine accrual basis operating e2penses, a. "dd beginning accrued liabilities. b. "dd beginning prepaid e2pense. c. Subtract ending prepaid e2pense. d. Subtract interest e2pense. Reversing entries are 1. normally prepared for prepaid9 accrued9 and estimated items. 2. necessary to achieve a proper matching of revenue and e2pense. #. desirable to e2ercise consistency and establish standardized procedures. a. 1 b. 2 c. # d. 1 and 2 "d8usting entries that should be reversed include those for prepaid or unearned items that a. create an asset or a liability account. b. &ere originally entered in a revenue or e2pense account. c. &ere originally entered in an asset or liability account. d. create an asset or a liability account and &ere originally entered in a revenue or e2pense account. "d8usting entries that should be reversed include a. all accrued revenues. b. all accrued e2penses. c. those that debit an asset or credit a liability. d. all of these.

" reversing entry should never be made for an ad8usting entry that a. accrues unrecorded revenue. b. ad8usts e2pired costs from an asset account to an e2pense account. c. accrues unrecorded e2penses. d. ad8usts une2pired costs from an e2pense account to an asset account. S F3'. 6he &or;sheet for Shar;o o. consisted of five pairs of debit and credit columns. 6he dollar amount of one item appeared in both the credit column of the income statement section and the debit column of the balance sheet section. 6hat item is a. net income for the period. b. beginning inventory. c. cost of goods sold. d. 4et loss for the period. 3(.Maso ompany recorded 8ournal entries for the issuance of common stoc; for >3:9:::9 the payment of >2(9::: on accounts payable9 and the payment of salaries e2pense of >%29:::. )hat net effect do these entries have on o&ners< equity, a. Increase of >3:9:::. b. Increase of >'%9:::. c. Increase of >#39:::. d. Increase of >129:::. 3/. Mune ompany recorded 8ournal entries for the declaration of >1::9::: of dividends9 the >(%9::: increase in accounts receivable for services rendered9 and the purchase of equipment for >%29:::. )hat net effect do these entries have on o&ners< equity, a. $ecrease of >1%29:::. b. $ecrease of >/39:::. c. $ecrease of >#(9:::. d. Increase of >229:::. 33. !appy orporation received cash of >139::: on September 19 2:12 for one year<s rent in advance and recorded the transaction &ith a credit to 0nearned Rent Revenue. 6he $ecember #19 2:12 ad8usting entry is a. debit Rent Revenue and credit 0nearned Rent Revenue9 >(9:::. b. debit Rent Revenue and credit 0nearned Rent Revenue9 >129:::. c. debit 0nearned Rent Revenue and credit Rent Revenue9 >(9:::. d. debit ash and credit 0nearned Rent Revenue9 >129:::. 35. !anda orporation paid cash of >#:9::: on Gune 19 2:12 for one year<s rent in advance and recorded the transaction &ith a debit to !repaid Rent. 6he $ecember #19 2:12 ad8usting entry is a. debit !repaid Rent and credit Rent 12pense9 >129'::. b. debit !repaid Rent and credit Rent 12pense9 >1/9'::. c. debit Rent 12pense and credit !repaid Rent9 >1/9'::. d. debit !repaid Rent and credit ash9 >129'::. 5:. 6ate ompany purchased equipment on 4ovember 19 2:12 and gave a #7month9 5H note &ith a face value of >%:9:::. 6he $ecember #19 2:12 ad8usting entry is a. debit Interest 12pense and credit Interest !ayable9 >#9(::. b. debit Interest 12pense and credit Interest !ayable9 >5::. c. debit Interest 12pense and credit ash9 >(::. d. debit Interest 12pense and credit Interest !ayable9 >(::. 51. .ro&n ompanyAs account balances at $ecember #19 2:12 for "ccounts Receivable and the related "llo&ance for $oubtful "ccounts are >52:9::: debit and >19%:: credit9 respectively. From an aging of accounts receivable9 it is estimated that >2'9::: of the $ecember #1 receivables &ill be uncollectible. 6he necessary ad8usting entry &ould include a credit to the allo&ance account for

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a. >2'9:::. b. >2(9%::. c. >2#9(::. d. >19%::. hen ompanyAs account balances at $ecember #19 2:12 for "ccounts Receivable and the "llo&ance for $oubtful "ccounts are >%3:9::: debit and >5:: credit. Sales during 2:12 &ere >19#':9:::. It is estimated that 1H of sales &ill be uncollectible. 6he ad8usting entry &ould include a credit to the allo&ance account for a. >1%9%::. b. >1#9'::. c. >129(::. d. >%93::. Starr orporation loaned >1':9::: to another corporation on $ecember 19 2:12 and received a #7month9 3H interest7bearing note &ith a face value of >1':9:::. )hat ad8usting entry should Starr ma;e on $ecember #19 2:12, a. $ebit Interest Receivable and credit Interest Revenue9 >#9:::. b. $ebit ash and credit Interest Revenue9 >19:::. c. $ebit Interest Receivable and credit Interest Revenue9 >19:::. d. $ebit ash and credit Interest Receivable9 >#9:::. " company receives interest on a >%:9:::9 3H9 '7year note receivable each "pril 1. "t $ecember #19 2:129 the follo&ing ad8usting entry &as made to accrue interest receivable@ Interest Receivable ............................................................. 29%:: Interest Revenue ..................................................... 29%:: "ssuming that the company does not use reversing entries9 &hat entry should be made on "pril 19 2:1# &hen the annual interest payment is received, a. ash ................................................................................... 3:: Interest Revenue ..................................................... 3:: b. ash ................................................................................... 29%:: Interest Receivable ................................................. 29%:: c. ash ................................................................................... #92:: Interest Receivable ................................................. 29%:: Interest Revenue ..................................................... 3:: d. ash ................................................................................... #92:: Interest Revenue ..................................................... #92:: " company receives interest on a >%:9:::9 3H9 '7year note receivable each "pril 1. "t $ecember #19 2:129 the follo&ing ad8usting entry &as made to accrue interest receivable@ Interest Receivable ............................................................. 29%:: Interest Revenue ..................................................... 29%:: "ssuming that the company does use reversing entries9 &hat entry should be made on "pril 19 2:1# &hen the annual interest payment is received, a. ash ................................................................................... 3:: Interest Revenue ..................................................... 3:: b. ash ................................................................................... 29%:: Interest Receivable ................................................. 29%:: c. ash .................................................................................. #92:: Interest Receivable ................................................. 29%:: Interest Revenue ..................................................... 3::

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ash ................................................................................... #92:: Interest Revenue...................................................... #92:: Murphy ompany sublet a portion of its &arehouse for five years at an annual rental of >#:9:::9 beginning on May 19 2:12. 6he tenant9 Sheri harter9 paid one yearAs rent in advance9 &hich Murphy recorded as a credit to 0nearned Rent Revenue. Murphy reports on a calendar7year basis. 6he ad8ustment on $ecember #19 2:12 for Murphy should be a. 4o entry b. 0nearned Rent Revenue .................................................... 1:9::: Rent Revenue ......................................................... 1:9::: c. Rent Revenue ..................................................................... 1:9::: 0nearned Rent Revenue ......................................... 1:9::: d. 0nearned Rent Revenue .................................................... 2:9::: Revenue Revenue................................................... 2:9::: $uring the first year of )il;inson o.As operations9 all purchases &ere recorded as assets. Supplies in the amount of >2'93:: &ere purchased. "ctual year7end supplies amounted to >39(::. 6he ad8usting entry for store supplies &ill a. increase net income by >1/92::. b. increase e2penses by >1/92::. c. decrease supplies by >39(::. d. debit "ccounts !ayable for >39(::. .ig7Mouth Frog orporation had revenues of >#::9:::9 e2penses of >13:9:::9 and dividends of >%'9:::. )hen Income Summary is closed to Retained 1arnings9 the amount of the debit or credit to Retained 1arnings is a a. debit of >/'9:::. b. debit of >12:9:::. c. credit of >/'9:::. d. credit of >12:9:::. 6he income statement of $olan orporation for 2:12 included the follo&ing items@ Interest revenue >1#19::: Salaries and &ages e2pense 1/:9::: Insurance e2pense 1'92::

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6he follo&ing balances have been e2cerpted from $olan orporationAs balance sheets@ $ecember #19 2:12 $ecember #19 2:11 Interest receivable >1392:: >1'9::: Salaries and &ages payable 1/93:: 39%:: !repaid insurance 292:: #9::: 6he cash received for interest during 2:12 &as a. >11293::. b. >12/93::. c. >1#19:::. d. >1#%92::. F1::. 6he income statement of $olan orporation for 2:12 included the follo&ing items@ Interest revenue >1#19::: Salaries and &ages e2pense 1/:9::: Insurance e2pense 1'92:: 6he follo&ing balances have been e2cerpted from $olan orporationAs balance sheets@

Interest receivable Salaries and &ages payable !repaid insurance

$ecember #19 2:12 >1392:: 1/93:: 292::

$ecember #19 2:11 >1'9::: 39%:: #9:::

6he cash paid for salaries during 2:12 &as a. >1/59%::. b. >1(:9(::. c. >1(19(::. d. >13/93::. F1:1. 6he income statement of $olan orporation for 2:12 included the follo&ing items@ Interest revenue >1#19::: Salaries and &ages e2pense 1/:9::: Insurance e2pense 1'92:: 6he follo&ing balances have been e2cerpted from $olan orporationAs balance sheets@ $ecember #19 2:12 $ecember #19 2:11 Interest receivable >1392:: >1'9::: Salaries and &ages payable 1/93:: 39%:: !repaid insurance 292:: #9::: 6he cash paid for insurance premiums during 2:12 &as a. >1#9:::. b. >1292::. c. >1(9:::. d. >1%9%::. F1:2. =lsen ompany paid or collected during 2:12 the follo&ing items@ Insurance premiums paid > 2:93:: Interest collected (/93:: Salaries paid 2%:9%:: 6he follo&ing balances have been e2cerpted from =lsenAs balance sheets@ $ecember #19 2:12 $ecember #19 2:11 !repaid insurance > 29%:: > #9::: Interest receivable /9%:: '93:: Salaries and &ages payable 2%9(:: 2192:: 6he insurance e2pense on the income statement for 2:12 &as a. >1'9%::. b. >2:92::. c. >219%::. d. >2(92::. F1:#. =lsen ompany paid or collected during 2:12 the follo&ing items@ Insurance premiums paid > 2:93:: Interest collected (/93:: Salaries paid 2%:9%:: 6he follo&ing balances have been e2cerpted from =lsenAs balance sheets@ $ecember #19 2:12 $ecember #19 2:11

!repaid insurance Interest receivable Salaries and &ages payable

> 29%:: /9%:: 2%9(::

> #9::: '93:: 2192::

6he interest revenue on the income statement for 2:12 &as a. >'%9(::. b. >((92::. c. >(59%::. d. >319:::. F1:%. =lsen ompany paid or collected during 2:12 the follo&ing items@ Insurance premiums paid > 2:93:: Interest collected (/93:: Salaries paid 2%:9%:: 6he follo&ing balances have been e2cerpted from =lsenAs balance sheets@ $ecember #19 2:12 $ecember #19 2:11 !repaid insurance > 29%:: > #9::: Interest receivable /9%:: '93:: Salaries and &ages payable 2%9(:: 2192:: Salaries e2pense on the income statement for 2:12 &as a. >15%9(::. b. >2#/9:::. c. >2%#93::. d. >23(92::. F1:'. 6he Supplies account had a balance at the beginning of year # of >39::: *before the reversing entry+. !ayments for purchases of supplies during year # amounted to >':9::: and &ere recorded as e2pense. " physical count at the end of year # revealed supplies costing >59':: &ere on hand. Reversing entries are used by this company. 6he required ad8usting entry at the end of year # &ill include a debit to@ a. Supplies 12pense for >19'::. b. Supplies for >19'::. c. Supplies 12pense for >%39'::. d. Supplies for >59'::. F1:(. "t the end of 2:129 $re& ompany made four ad8usting entries for the follo&ing items@ 1. $epreciation e2pense9 >2'9:::. 2. 12pired insurance9 >292:: *originally recorded as prepaid insurance.+ #. Interest payable9 >(9:::. %. Rent receivable9 >1:9:::. In the normal situation9 to facilitate subsequent entries9 the ad8usting entry or entries that may be reversed is *are+ a. 1ntry 4o. #. b. 1ntry 4o. %. c. 1ntry 4o. # and 4o. %. d. 1ntry 4o. 29 4o. # and 4o. %. F1:/. -arcia orporation received cash of >2%9::: on "ugust 19 2:12 for one yearAs rent in advance and recorded the transaction &ith a credit to Rent Revenue. 6he $ecember #19 2:12 ad8usting entry is a. debit Rent Revenue and credit 0nearned Rent Revenue9 >1:9:::. b. debit Rent Revenue and credit 0nearned Rent Revenue9 >1%9:::.

c. debit 0nearned Rent Revenue and credit Rent Revenue9 >1:9:::. d. debit ash and credit 0nearned Rent Revenue9 >1%9:::. F1:3. ?opez ompany received >59(:: on "pril 19 2:12 for one yearAs rent in advance and recorded the transaction &ith a credit to a nominal account. 6he $ecember #19 2:12 ad8usting entry is a. debit Rent Revenue and credit 0nearned Rent Revenue9 >29%::. b. debit Rent Revenue and credit 0nearned Rent Revenue9 >/92::. c. debit 0nearned Rent Revenue and credit Rent Revenue9 >29%::. d. debit 0nearned Rent Revenue and credit Rent Revenue9 >/92::. F1:5. -ibson ompany paid >(9::: on Gune 19 2:12 for a t&o7year insurance policy and recorded the entire amount as Insurance 12pense. 6he $ecember #19 2:12 ad8usting entry is a. debit Insurance 12pense and credit !repaid Insurance9 >19/':. b. debit Insurance 12pense and credit !repaid Insurance9 >%92':. c. debit !repaid Insurance and credit Insurance 12pense9 >19/': d. debit !repaid Insurance and credit Insurance 12pense9 >%92':.