Adv. Accounting - Ch. 9 Review Question Preview (ID: 13141)


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

Expenses paid in one fiscal period but not reported as expenses until a later fiscal period are known as
a) accrued expenses
b) matching revenue with expenses
c) postponed expenses
d) prepaid expenses

The closing entry for Office Supplies Expense would be a debit to Office Supplies Expense and a credit to Income Summary.
a) True
b) False
c)
d)

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
c)
d)

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) $20
c) $12.50
d) $22.50

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
c)
d)

Adjusting entries for prepaid expenses recognize the portion of the asset used in the current period as an asset.
a) True
b) False
c)
d)

When a note is paid at maturity, the credit is to Cash. The debit(s) are to
a) Notes Payable for the maturity value of 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 principal of the note and Interest Expense for the interest due on the note.
d) Notes Pay. for the maturity value of the note and Interest Exp. for the interest due on the note.

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 3
c) August 5
d) August 30

An entry that is the exact opposite of an adjusting entry is known as a(n)
a) closing entry
b) general journal entry
c) opening entry
d) reversing entry

If corporations record employee income tax payable, they do not need to record federal income tax expense.
a) True
b) False
c)
d)

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