1. AA owes BB $1,000 on account. When AA pays back their debt ($1,000) to BB, the transaction recorded on AAs book will

decrease a liability $1,000 and increase equity $1,000

increase an asset $1,000 and decreases an asset $1,000

increase an asset $1,000 and decrease a liability $1,000

decrease an asset $1,000 and decrease a liability $1,000

2. AA purchased an equipment for $1,000 from Company BB on account.

In the above transaction, AA's assets ["increased", "decreased", "did not change"]

and AA's liability ["did not change", "decreased", "increased"]

3. AA paid $3,000 cash for rent.

In the above transaction, AA's assets ["increased", "decreased", "did not change"]

and AA's equity

4. AAA received $3,000 cash for providing a catering service for Phoenix Entertainment.

Debit - Accounts Payable Unearned Revenue Cash Service Revenue Accounts Receivable

Credit - Accounts Payable Unearned Revenue Cash Service Revenue Accounts Receivable

5. On January 1, AA had a service contract with BB. According to contract, AA provides catering service for January, and BB pays $10,000 cash on January 31. What journal entry should AA have on January 31?

Debit

Unearned Revenue Service Revenue Accounts Receivable Cash

Credit

Unearned Revenue Service Revenue Accounts Receivable Cash

6. AAA received cash $6,000 in advance for catering service scheduled on next month,

Debit Accounts Receivable Unearned Revenue Cash Accounts Payable Catering Service Revenue

Credit Accounts Receivable Unearned Revenue Cash Accounts Payable Catering Service Revenue

7. AAA paid cash $12,000 for fire insurance for next 6 months,

Debit

insurance Expense Prepaid Insurance Insurance Payable Accounts Payable Cash

Credit

Insurance Expense Prepaid Insurance Insurance Payable Accounts Payable Cash

8. On January 31, Carson Catering caters a party for Mary Smith for $1,000. Mary pays $300, and Carson Catering allows Mary to pay the remainder in two weeks. Which Carson Catering accounts are affected? Select all accounts affected by this transaction.

Accounts Receivable

Accounts Payable

Cash

Catering Service Revenue

9.

• Jan 1. Star Catering provided a catering service for Moon Corporation, and received cash $10,000
• Jan 2. Star Catering had a service contract with Mary Corporation. In the contract, Mary Corporation pays cash $20,000 on January 2, and Star Catering will provide a catering service on January 31.
• Jan 3. Star Catering purchased an equipment $3,000 on account.
• Jan 20. Star Catering paid back $3,000 for their equipment purchase on January 3.
• Jan 31. Star Catering provided the catering service for Mary Corporation.

Based on these transactions, how much is the balance of cash?

10.

• Jan 1. Star Catering provided a catering service for Moon Corporation, and received cash $10,000
• Jan 2. Star Catering had a service contract with Mary Corporation. In the contract, Mary Corporation pays cash $20,000 on January 2, and Star Catering will provide a catering service on January 31.
• Jan 3. Star Catering purchased an equipment $3,000 on account.
• Jan 20. Star Catering paid back $3,000 for their equipment purchase on January 3.
• Jan 31. Star Catering provided the catering service for Mary Corporation.

Based on these transactions, how much is the total liability?

11. Jan Spears opened her decorating company on January 1. During the first month of operations, the following transaction occurred.

• Performed service for country club clients. On January 31, $2,300 of such services was earned but not yet billed to the clubs.

Select appropriate accounts for adjusting journal entry at the end of January.

Debit

Service Revenue Accounts Receivable Cash Unearned Revenue Accounts Payable

Credit

Service Revenue Accounts Receivable Cash Unearned Revenue Accounts Payable 12.

12. Jan Spears opened her decorating company on January 1. During the first month of operations, the following transaction occurred.

• Purchased decorating supplies on January 1 for $50,000, paying $10,000 in cash and signing a $40,000, three-year note payable. Interest is $300 per month.

Select correct account for adjusting journal entry at the end of January

Debit

Interest Income Accrued Interest Payable Interest Expense Cash Notes Payable Accrued Interest Receivable

Credit

Interest Income Accrued Interest Payable Interest Expense Cash Notes Payable Accrued Interest Receivable

13. Jan Spears opened her decorating company on January 1. During the first month of operations, the following transaction occurred.

• Purchased a one-year fire insurance policy on January 1 for $6,000.

Select correct account for adjusting journal entry at the end of January.

Debit

Prepaid Insurance Insurance Receivable Insurance Payable Cash Insurance Expense

Credit

Prepaid Insurance Insurance Receivable Insurance Payable Cash Insurance Expense

14. Jan Spears opened her decorating company on January 1. During the first month of operations, the following transaction occurred.

• Purchased supplies costing $2,500 on January 1. An inventory count at the end of January reveals that $1,000 supplies are on hand.

Select correct account for adjusting journal entry at the end of January.

Debit

Supplies Expense Supplies Supplies Revenue Cash

Credit

13. On January 1, Carson Catering purchased purchased an office equipment $10,000 paying in cash.

The estimated salvage value after 5 years of useful life is $1,300.

At the end of January, Carson Catering prepares financial statements, implying they need adjusting entries.

In their journal, they should record ["Depreciation Expense", "Cash", "Equipment", "Accumulated Depreciation"] on debit, and ["Depreciation Expense", "Cash", "Accumulated Depreciation", "Equipment"] on credit as adjusting entries.

The amount should be ["$145", "$1,740", "$1,300", "$8,700"]

14. An accountant has debited an asset account for $2,000 and credited a liability account for $1,000. What can be done to complete the recording of the transaction?

Debit another asset account for $1,000

Debit a stockholders equity account for $1,000

Credit a different asset account for $1,000

Nothing further must be done

15. If AAA purchases an item on account for $5,000, then

stockholders equity increases by $5,000

assets and liabilities both decrease by $5,000

assets increase by $5,000 and liabilities decrease by $5,000

assets and liabilities both increase by $5,000

16. Adjusting entry for the interest on notes receivable (3-month note, $36,000, annual interest rate 10%) at the end of first month should be

Debit: Acc. Interest Receivable $1,200 Credit: Interest Income $1,200

Debit: Interest Expense $300 Credit: Acc. Interest Payable $300

Debit: Acc. Interest Receivable $300 Credit: Interest Income $300

Debit: Interest Expense $1,200 Credit: Acc. Interest Payable $1,200