Review 1

As of December 31, 2017, Kent Company has assets of

$3,500 and owner’s equity of $2,000. What are the liabilities for Kent Company as of December 31, 2017?

• 1500

• 1000

• 2500

• 2000

Which of the following statements about users of

accounting information is incorrect?

• Management is an internal user.

• Taxing authorities are external users.

• Present creditors are external users.

• Regulatory authorities are internal users.

Which of the following events is not recorded in the

accounting records?

• Equipment is purchased on account

• An employee is terminated.

• A cash investment is made into the business

• The owner withdraws cash for personal use.

The expanded accounting equation is:

• Assets + Liabilities= Owner’s Capital + Owner’s

  Drawings+ Revenues + Expenses

• Assets = Liabilities+ Owner’s Capital + Owner’s

  Drawings + Revenues - Expenses.

• Assets = Liabilities - Owner’s Capital- Owner’s

  Drawings - Revenues - Expenses.

• Assets = Liabilities + Owner’s Capital - Owner’s

  Drawings + Revenues - Expenses

Which of the following is not part of the recording

process?

• Analyzing transactions.

• Preparing a trial balance

• Entering transactions in a journal.

• Posting transactions.

One of the following statements about the accrual basis of accounting is false? That statement is:

• Events that change a company’s financial statements are recorded in the periods in which the events occur.

• Revenue is recognized in the period in which the performance obligation is satisfied.

• The accrual basis of accounting is in accord with generally accepted accounting principles.

• Revenue is recorded only when cash is received, and expenses are recorded only when cash is paid.

Adjusting entries are made to ensure that:

• expenses are recognized in the period in which they are incurred.

• revenues are recorded in the period in which services are performed.

• balance sheet and income statement accounts have correct balances at the end of an accounting period.

• all of the above.

The trial balance shows Supplies $1,350 and Supplies

Expense $0. If $600 of supplies are on hand at the end

of the period, the adjusting entry is

• Dr Supplies 600

  Cr Supplies Expense 600

• Dr Supplies Expense 750

  Cr Supplies 750

• Dr Supplies expense 600

  Cr Supplies 600

• Dr Supplies 750

  Cr Supplies expense 750

1. Each of the following is a major type (or category) of

adjusting entries except:

• prepaid expenses

• accrued revenues

• accrued expenses

• recognized revenues

Anika Wilson earned a salary of $400 for the last week

of September. She will be paid on October 1. The

adjusting entry for Anika’s employer at September 30

is:

• No entry is required

• Dr Salaries & Wages Expense 400

  Cr Cash 400

• Dr Salaries & Wages Expense 400

  Cr Salaries & Wages Payable 400

• Dr Salaries & Wages Payable 400

  Cr Cash 400