01. Abbott Corp. collected $100,000 from customers in 2018 of which $70,000 was from revenue earned on account in 2017. In addition, Abbott Corp. earned $57,000 of revenue in 2018 which will not be collected until 2019. In 2018, Abbott Corp. paid $80,000 for expenses. Of this amount paid, $30,000 was for expenses incurred on account in 2017. In addition, Abbott Corp. also incurred $5,000 expenses in 2018, which will not be paid until 2019. Based on the above information, what are Abbott Corporporation's 2018 cash-basis and accrual- bases net income: a. Select one: $20,000 and 52,000, respectively. b. $20,000 and 32,000, respectively. O c. $15,000 and 52,000, respectively. d. $15,000 and 32,000, respectively. 02. On November 1 of the current year, Prepaid Insurance was debited for $9,000. This amount represents payment for one year of insurance paid in advance. The adjusting entry on December 31 will involve a: Select one: O a. debit to Insurance Expense for $1,500 b. credit to Prepaid Insurance for $7,500 O c. debit to Prepaid Insurance for $1,500 O d. credit cash for $1,500 03. A note of $50,000 with an annual interest of 3% was issued for the purchase of a machine on 10/1/2018. Interests were paid semiannually. The entry to recognize the accrued interest expense on 12/31/2018 would include a: Select one: a. X credit to interest expense for $375 O b. credit to interest payable for $375 c. debit to cash for $375 d. debit to interest receivable for $375 04. On October 31 of the current year, a contract was signed and a check received for delivery services to be performed by October 31 of the following year. The Unearned Service Revenue account was credited for $9,600. Assuming services were performed evenly during the remainder of the year, the adjusting entry on December 31 will involve a: Select one: X O a. debit to Service Revenue for $8,000 ob. credit to Unearned Service Revenue for $1,600 O c. debit to Service Revenue $1,600 O d. debit to Unearned Service Revenue $1,600 05.Acamki Company had $2,000 supplies at the beginning of 2018 and purchased $15,500 of supplies in 2018. By the end of 2018, $5,800 of supplies were still on hand. The adjusting entry at the end of 2018 would include a: Select one: a. debit to Supplies Expense for $5,800 O b. debit to Supplies Expense for $11,700 C. credit to Supplies for $5,800 O d. debit to Supplies for $11,700 x 06. If the adjusting entry to record the accrued interest expense is omitted: Select one: O a. net income would be overstated and liabilities would be overstated. b. net income would be understated and assets would be understated. O c. net income would not be affected but assets would be overstated. X O d. net income would be overstated and liabilities would be understated. 07. Presented below is the adjused trial balance columns on a worksheet of Aflact Company for the year ended December 31, 2018. Using this adjusted trial balance to answer questions 7 and 8: Adjusted Trial Balance Debit Credit Account Titles 1,500 500 1,700 30,000 Cash Supplies Prepaid Insurance Equipment Accumulated Depreciaton for Equipment Accounts Payable Notes Payable Interest Payable Common Stock Retained Earnings Dividends Copy Revenue Utility Expense Supplies Expense InsuranceExpense Depreciation Expense Rent Expense 5.800 3,400 3,500 700 5,800 12,500 2,600 7,000 300 600 500 300 700 Totals 38,700 38,700 What is the net income (net loss) of Aflact Company for the year ended December 31, 2018? Select one: a. net income, $7.000 b. net income, $4,600. C. net income. $2.000. d. net loss, $3,500. 08. Using the adjusted trial balance presented in question 7, what is the retained earnings reported on the balance sheet statement of December 31, 2018? Select one: a. $17,100 b. $12,100 c. $14,500 d. $2,000 09. The entry to close a service revenue account includes a Select one: a. debit to Retained Earnings. b. credit to Service Revenue. C. debit to Income Summary d. credit to Income Summary 10. The entry to close a rent expense account includes a Select one: a. credit to Rent Expense. b. debit to Retained Earnings. c. credit to Retained Earnings. d. credit to Income Summary