24) Paid the rent for the next six months. A) An asset would be debited and an expense credited. B) An asset would be debited and a revenue credited. C) Capital would be debited and a revenue credited. D) An asset would be debited and an asset credited. 24) Paid the rent for the next six months. A) An asset would be debited and an expense credited. B) An asset would be debited and a revenue credited. C) Capital would be debited and a revenue credited. D) An asset would be debited and an asset credited. 38) Andrew Antiques showed store supplies available during the year of $400. A count of the supplies on hand as of May 31 is $150. The adjusting entry for Store Supplies would include: A) a debit to Store Supplies for $150. B) a credit to Store Supplies Expense for $250. 40) The capital balance amount shown in the balance sheet column of the worksheet represents: A) beginning capital plus net income. B) beginning capital plus investments to capital. C) beginning capital less withdrawals. D) beginning capital plus net income less withdrawal. 43) The purchase of equipment will require an adjustment of: A) increasing the total assets and increasing the total expenses at the end of the month. B) decreasing the total assets and decreasing the total expenses at the end of the month. C) decreasing the total assets and increasing the total expenses at the end of the month. D) none of the above. 44) Which of the following would cause an asset to be debited and a liability credited? A) Recorded the adjustment for the expiration of the insurance policy B) Recorded the adjustment for the expiration of rent C) Purchased supplies on account D) None of these would have that effect. 45) Which of the following would cause a liability to be credited and an expense debited? A) Recorded the adjustment for the accrual of wages B) It is the end of the month and no utility bill has been received C) Recorded an accrued expense D) All of the above would have that effect. 46) The adjusting entries are journalized: A) whenever time permits. B) before preparing financial reports. C) before the next accounting period starts. D) at the beginning of the accounting period. 47) Which of the following accounts would be considered a permanent account? A) Service Fees B) Salaries Expense C) Salaries Payable D) Depreciation Expense 48) An important purpose of closing entries is to: A) set nominal account balances to zero to begin the next period. B) adjust the accounts in the ledger. C) help in preparing financial statement. D) set real account balances to zero to begin the next period. 49) Which of the following accounts will not be closed to Income Summary at the end of the fiscal year? A) Word Processing Fees B) Smith, Withdrawals C) Salaries Expense D) Supplies Expense 50) Which of the following accounts will be directly closed to Capital at the end of the fiscal year? A) Depreciation Expense B) Fees Revenue C) Sal.

1. 24) Paid the rent for the next six months.
A) An asset would be debited and an expense credited.
B) An asset would be debited and a revenue credited.
C) Capital would be debited and a revenue credited.
D) An asset would be debited and an asset credited.
24) Paid the rent for the next six months.
A) An asset would be debited and an expense credited.
B) An asset would be debited and a revenue credited.
C) Capital would be debited and a revenue credited.
D) An asset would be debited and an asset credited.
38) Andrew Antiques showed store supplies available during the
year of $400. A
count of the supplies on hand as of May 31 is $150. The
adjusting entry for
Store Supplies would include:
A) a debit to Store Supplies for $150.
B) a credit to Store Supplies Expense for $250.
40) The capital balance amount shown in the balance sheet
column of the worksheet represents:
A) beginning capital plus net income.
B) beginning capital plus investments to capital.
C) beginning capital less withdrawals.
D) beginning capital plus net income less withdrawal.
43) The purchase of equipment will require an adjustment of:
A) increasing the total assets and increasing the total expenses
at the end of the
month.
B) decreasing the total assets and decreasing the total expenses
at the end of

2. the month.
C) decreasing the total assets and increasing the total expenses
at the end of
the month.
D) none of the above.
44) Which of the following would cause an asset to be debited
and a liability
credited?
A) Recorded the adjustment for the expiration of the insurance
policy
B) Recorded the adjustment for the expiration of rent
C) Purchased supplies on account
D) None of these would have that effect.
45) Which of the following would cause a liability to be
credited and an expense
debited?
A) Recorded the adjustment for the accrual of wages
B) It is the end of the month and no utility bill has been
received
C) Recorded an accrued expense
D) All of the above would have that effect.
46) The adjusting entries are journalized:
A) whenever time permits.
B) before preparing financial reports.
C) before the next accounting period starts.
D) at the beginning of the accounting period.
47) Which of the following accounts would be considered a
permanent account?
A) Service Fees
B) Salaries Expense
C) Salaries Payable
D) Depreciation Expense

3. 48) An important purpose of closing entries is to:
A) set nominal account balances to zero to begin the next
period.
B) adjust the accounts in the ledger.
C) help in preparing financial statement.
D) set real account balances to zero to begin the next period.
49) Which of the following accounts will not be closed to
Income Summary at the
end of the fiscal year?
A) Word Processing Fees
B) Smith, Withdrawals
C) Salaries Expense
D) Supplies Expense
50) Which of the following accounts will be directly closed to
Capital at the end
of the fiscal year?
A) Depreciation Expense
B) Fees Revenue
C) Salaries Expense
D) Withdrawals
58) A check for $78 is incorrectly recorded on the checkbook
stub as $87. The
$9 error should be shown on the bank reconciliation as:
A) deducted from the balance per bank statement.
B) added to the balance per bank statement.
C) added to the balance per books.
D) deducted from the balance per books.
59) Which of the following bank reconciliation items would not
be reflected in a
journal entry?
A) Outstanding checks

4. B) NSF customer check
C) Collection of a note by the bank
D) Bank service charges
63) The entry to replenish the petty cash fund debited Supplies
instead of Postage Expense. This would cause:
A) expenses to be overstated.
B) revenues to be understated.
C) expenses to be understated.
D) revenues to be overstated.
64) An error recording a $72 check as $27 would be included on
the bank reconciliation as a(n):
A) subtraction from the balance per bank.
B) subtraction from the balance per books.
C) addition to the balance per books.
D) addition to the balance per bank..
68) The payroll register includes sections for recording:
A) assets, liabilities, equity, revenues, and expenses.
B) gross pay, deductions, and net pay.
C) accrued expenses, unearned revenues, and net pay.
D) trade accounts receivable and short-term note receivables.
D) take-home pay.
70) Both employees and employers pay which of the following
taxes?
A) FICA taxes (Social Security and Medicare)
B) Excise tax
C) Federal income tax
D) FUTA tax
75) The entry to record the payroll tax expense would include:
A) a credit to Cash.
B) a credit to FICA (Social Security and Medicare) Taxes
Payable.

5. C) a credit to Federal Income Taxes Payable.
D) a credit to Wages Payable.
76) The percentage of FICA-Medicare multiplied by taxable
earnings on the 941
is:
A) 12.4%.
B) 6.2%.
C) 2.9%.
D) 1.45%.
77) The employer’s annual Federal Unemployment Tax Return
is:
A) Form 940EZ.
B) Form 8109.
C) Form 941.
D) Form W-4.
78) Workers’ Compensation Insurance is:
A) paid by the employer to protect the employee against job-
related injury or
death.
B) paid by the employee to protect himself/herself against no-
njob-related accidents and death.
C) paid by the employee to protect himself/herself against job-
related accidents
or death.
D) paid by the employer to protect the employee against non-
job-related injury
or death
83) Accounts of a single type are kept in this ledger:
A) subsidiary ledger.
B) supplemental ledger.
C) additional ledger.
D) None of these answers are correct.

6. 90) Purchased office supplies on account. This will be recorded
with:
A) a debit to a liability and a credit to an asset.
B) a credit to a liability and a debit to an asset.
C) a credit to an asset and a debit to an expense.
D) a debit to an asset and a credit to an expense.
93) Deluth Corporation has a normal gross profit of 40%. The
current year’s
beginning inventory was $2,000, purchases were $5,000, and
retail sales
were $6,000. The estimated ending inventory under the gross
margin method
is:
A) $3,600.
B) $3,400.
C) $3,450.
D) $4,500.
96) What would the depreciation be in year 2 for a computer
system using the
straight-line method when cost is $5,000, residual value is
$1,000, and the
expected life is 4 years?
A) $1,250
B) $800
C) $2,000
D) $1,000
99) When an asset is exchanged for a similar asset and a gain
results, under
accounting rules the gain is:
A) subtracted from the cost of the new asset.
B) credited to Gain on Exchange of an Asset.
C) absorbed into the cost of the new asset.

7. D) recorded in the other income section of the income
statement.