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Adv. Accounting - Ch. 9 Review
Test Description: Notes Payable, Prepaid Expenses & Accured Expenses
Instructions: Answer all questions to get your test result.
1) Expenses paid in one fiscal period but not reported as expenses until a later fiscal period are known as
A
matching revenue with expenses
B
prepaid expenses
C
accrued expenses
D
postponed expenses
2) The closing entry for Office Supplies Expense would be a debit to Office Supplies Expense and a credit to Income Summary.
A
False
B
True
3) The adjusting entry for accrued interest debits an expense account and credits a liability account. So, the closing entry debits a liability account and credits an expense account.
A
True
B
False
4) On Dec. 31, Wilson, Inc., owes 10 days worth of accrued interest on a $5,000 note payable at 9% interest. The adjusting entry includes a debit to Interest Expense for
A
$10
B
$12.50
C
$20
D
$22.50
5) Companies reverse accrued salary entries so that they do not have to remember that the payroll liability accounts reflect an expense from the previous accounting period.
A
True
B
False
6) Adjusting entries for prepaid expenses recognize the portion of the asset used in the current period as an asset.
A
False
B
True
7) When a note is paid at maturity, the credit is to Cash. The debit(s) are to
A
Notes Pay. for the maturity value of the note and Interest Exp. for the interest due on the note.
B
Notes Payable for the principal of the note and Interest Expense for the interest due on the note.
C
Notes Payable for the maturity value of the note.
D
Notes Payable for the principal of the note and Interest Expense for the interest due on the note.
8) Wilson, Inc. signed a 90-day note on May 5 of the current year. The maturity date of the note is
A
May 5
B
August 30
C
August 3
D
August 5
9) An entry that is the exact opposite of an adjusting entry is known as a(n)
A
opening entry
B
general journal entry
C
closing entry
D
reversing entry
10) If corporations record employee income tax payable, they do not need to record federal income tax expense.
A
True
B
False
*select an answer for all questions
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