1 Alpha company recorded prepaid rent at the beginning of the year when he paid a 2-year advance payment. The adjusting entry will include a (A) Credit to cash B Credit to prepaid rent Debit to prepaid rent Debit to rent expense Question 2 The adjusting entry to record depreciation will: Decrease contra-assets B Have no effect on net income (C) Increase liabilities (D) Decrease assets Question 3 Bravo company lended cash to Charlie company on February 1. It will be paid after a year. The adjusting entry by Charlie company will include a Debit to a receivable Credit to cash Credit to a liability None of the answers are correct Question 4 Adjusting entries are: prepared on December 31, except for companies that use the calendar period for accounting used to recorded revenues that have been incurred, and expenses that have been earned. recorded to avoid over- and understatements in both the income statement and the balance sheet All of the answers are correct Question 5 The adjusting entry to record bad debts: A may either debit or credit bad debts expense B may either debit or credit allowance for bad debts will reduce the net amount of accounts receivable (D) All of the answers are correct 2 Points 2 Points 2 Points 2 Points 2 Points