Adv. Accounting - Ch. 9 Review Question Preview (ID: 13144)


Notes Payable, Prepaid Expenses & Accrued Expenses. TEACHERS: click here for quick copy question ID numbers.

The interest rate that banks charge their most creditworthy customers is called the prime rate.
a) True
b) False
c)
d)

Corporations pay estimated federal income taxes quarterly. Any unpaid federal income tax is recorded as a prepaid expense.
a) True
b) False
c)
d)

Wilson, Inc. initially records prepaid insurance as an asset; therefore, it should record a reversing entry for insurance.
a) True
b) False
c)
d)

If supplies are initially recorded as assets, the adjusting entry to record the use of supplies is a debit to Supplies and a credit to Supplies Expense.
a) True
b) False
c)
d)

After the adjusting entry has been recorded for sales supplies, the asset amount represents the portion of sales supplies not used during the current fiscal period.
a) True
b) False
c)
d)

if the adjusting entry included a debit to the asset account and a credit to the expense account, the reversing entry would include a debit to the expense and a credit to the asset
a) True
b) False
c)
d)

Adjusting entries are recorded so that the supplies used during a fiscal period are reported as expenses & the supplies not used are reported as assets. This is an application of
a) adequate disclosure
b) historical cost
c) matching expenses with revenue
d) revenue recognition

To determine if a reversing entry is needed, accountants apply which of the following rules?
a) If an adj. entry creates a bal. in an asset or liability acct., the adj. entry needs to be reversed.
b) If a clos. entry creates a bal. in an asset or liability acct., the clos. entry needs to be reversed
c) If an adj. entry creates a bal. in an expense or revenue acct., the adj. entry needs to be reversed.
d) If a clos. entry creates a bal. in an expense or revenue acct., the clos. entry needs to be reversed

Wilson, Inc. signs a 180-day, 8% note for $6,000. The interest due on the note at maturity will be
a) $200
b) $240
c) $280
d) $480

The beg. bal. of Supplies is $12,000, and the adjusting entry to record the supplies used is $8,000. The amount of supplies remaining at the end of the period is
a) $12,000
b) $8,000
c) $4,000
d) $0

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