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1. Accrued expenses are considered asA) AssetB) LiabilityC) Gain

D) Income2. Prepaid expenses are regarded as

A) AssetB) LiabilityC) LossD) Capital

. !"ic" o# t"e #ollo$ing ad%usting double entries is correct #or &nearnedincome no$ earned'

A) D(BI* Income+ C,(DI* &nearned incomeB) DEBIT= Unearned income, CREDIT= IncomeC) D(BI* Cas"+ C,(DI* &nearned incomeD) D(BI* Income+ C,(DI* Cas"

-. (arned but not yet receied income is treated asA) AssetB) LiabilityC) LossD) Capital

/. !"ic" o# t"e #ollo$ing ad%usting double entries is correct #or accruedexpenses'

A) DEBIT= Expenses, CREDIT= Accrued expensesB) D(BI* Accrued expenses+ C,(DI* (xpensesC) D(BI* Cas"+ C,(DI* Accrued expensesD) D(BI* (xpenses+ C,(DI* Cas"

0. !"ic" o# t"e #ollo$ing ad%usting double entries is correct #or Prepaid

expenses expired'A) DEBIT= Expenses, CREDIT= repaid expensesB) D(BI* Prepaid expenses+ C,(DI* (xpensesC) D(BI* Cas"+ C,(DI* Prepaid expensesD) D(BI* (xpenses+ C,(DI* Cas"

. &nearned income is classied asA) AssetB) LiabilityC) LossD) Capital

3. 4ailure to ma5e ad%usting entries #or accrued income results inA) 6erstatement o# expenses

B) &nderstatement o# expensesC) Understatement o! capitalD) 6erstatement o# income

7. Identi#y t"e conse8uences o# not ma5ing ad%ustment entry #or accruedexpense

A) 6erstatement o# liabilitiesB) Understatement o! liabilitiesC) 6erstatement o# expenses

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D) &nderstatement o# capital

10. Which of the following is an example of an accrual?

a. wages incurred but not yet paid

b. payment of advertising six months in advance

c. purchase of supplies

d. revenue collected in advance

e. all of the above

11. An example of a current asset is:

a. paid-in capital

b. euipment

c. inventory

d. retained earnings

e. fixed assets

1!. "oo# value is defined as:

a. cost less salvage value

b. current mar#et value less accumulated depreciation

c. cost less accumulated depreciation

d. cost plus accumulated depreciation

e. cost plus salvage value

1$. . %he double-declining-balance method of depreciation:

a. causes less depreciation in the early years of an asset&s use as compared to other

depreciation methods

b. causes the same amount of depreciation in the early years of an asset&s use as compared

to other depreciation methodsc. causes more depreciation in the early years of an asset's use as compared to other

depreciation methods

d. is not an acceptable depreciation method according to generally accepted accounting

principles

e. none of the above

1-.,eenue earned but not yet receied by t"e business is 5no$n asA) Contra asset reenueB) Accrued expensesC) Accrued re"enueD) &nearned reenue

1/.Anot"er name o# accrued reenue isA) #utstandin$ assetB) (arned assetC) &nearned reenueD) (arned reenue

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10.!"at is depreciation'A) Cost o# a xed assetB) Cost o# a xed asset9s repairC) "e residual alue o# a xed asset

D) ortion o! a %xed asset&s cost consumed durin$ t'e current accountin$period

1.&nder $"ic" depreciation met"od t"e amount o# depreciation expensesremains same t"roug"out t"e use#ul li#e o# a xed asset

A) (trai$'t line met'odB) ,educing balance met"odC) :umber o# units produced met"od

13.!"at is t"e accumulated deprecation'A) (um o! all depreciation expenses o! a %xed assetB) Depreciation expensesC) Cost o# depletion o# assetsD) 4uture alue o# xed asset

17.!"ic" o# t"e #ollo$ing is t"e normal balance o# an accumulated depreciationaccount'

A) Debit balanceB) Credit balanceC) :il balance

2;.ationB) DepletionC) Bot' o! t'em