1) Of the $1,600 in supplies that were on hand at the beginning of the month, $400 remains at the end. What is the adjusting journal entry required at the end of the month?

None is needed, since accounting rules allow a deferral until the end of the fiscal period.

Debit supplies and credit supplies expense $1,200.

Debit supplies expense and credit supplies $1,200.

None of the choices are correct.

2) After net income has been determined, it is then transferred to:

the statement of retained earnings.

the statement of cash flows.

the income statement.

the balance sheet.

3) Which of the following statements is true?

If revenues are less than expenses, the company has a net loss and retained earnings falls.

If revenues are greater than expenses, the company has net income and contributed capital rises.

If revenues are less than expenses, the company has a net loss and contributed capital rises to balance off the loss.

If revenues are greater than expenses, the company has net income and retained earnings falls.

4) During the month, a company uses up $4,000 of supplies. At the end of the month, the related adjusting journal entry would result in:

a decrease in an asset and an equal increase in liabilities.

a decrease in an asset and an equal increase in expenses.

an increase in liabilities and a loss of equal value.

an increase in liabilities and an equal decrease in shareholders' equity.