1. Immediately after closing entries are made, the balances of the asset accounts will be

		A. equal to the balances before the closing entries were made
		B. smaller than before the closing entries were made.
		C. larger than before the closing entries were made.
		D. equal to zero.

2. Assume that $18,000 cash is paid for insurance to cover the next year. The appropriate debit and credit are:

		A. Debit Insurance Expense $18,000, credit Prepaid Insurance $18,000.
		B. Debit Prepaid Insurance $18,000, credit Insurance Expense $18,000.
		C. Debit Prepaid Insurance $18,000, credit Cash $18,000.
		D. Debit Cash $18,000, credit Prepaid Insurance $18,000.

3. Bostel wanted to expand the size of its warehouse in order to generate more profits. The company decided to purchase the building adjacent to its existing warehouse. The company pays for the building by borrowing from the bank. The purchase would be recorded as:

		A. Debit Cash; credit Notes Payable.
		B. Debit Buildings; credit Cash.
		C. Debit Buildings; credit Notes Payable.
		D. Debit Cash and Buildings; credit Notes Payable.

4. Jerome purchased a building for his business by signing a note to be repaid over the next ten years. Which of the following correctly describes how to record this transaction?

		A. Debit assets, credit liabilities.
		B. Debit assets, credit stockholders' equity.
		C. Debit liabilities, credit assets.
		D. Debit expenses, credit liabilities.