1) When a business sets up a credit account for a customer, a/an ___________ is created. a. T account b. Accounts receivable c. Accounts payable d. Interest payable

2) An account to track the purchase and use of supplies would be a/an a. Asset account b. Liability account c. Revenue d. Expense 3) This account is debited for increases and has a normal credit balance. a. Asset b. Revenue c. Owners Drawing d. Expense 4) A double-entry accounting system has specific rules of: a. Periodic entries b. Accounting periods c. Designating account names d. Debit and credit 5) Wages owed but not yet paid are classified as a. Prepaid expense b. Unearned revenue c. Accrued expense d. Accrued revenue 6) Supplies available on 12/01/09 total$5,000. Supplies on hand at 12/31/09 total $1500. What is the type and amount of adjustment to be entered? a. Prepaid expense $3500 b. Accrued expense $3500 c. Prepaid expense $1500 d. Accrued expense $1500 7) Which of the following is an example of accrued revenue? a. Swimming pool cleaning that has been paid for three months in advance. b. Swimming pool cleaning that has been provided but has not yet been billed or paid. c. An agreement has been signed for swimming pool cleaning for the next three months. d. Swimming pool cleaning that has been provided and paid on the same day. 8) What type of adjustment are fees earned but not yet received? a. Accrued expense b. Accrued revenue c. Prepaid expense d. Unearned revenue 9) The prepaid insurance account had a beginning balance of $5,000 and was debited for $2,000 of premiums paid during the year. What is the adjusting journal entry required at the end of the year assuming the amount of unexpired insurance related to future periods is $4,000? a. Debit Insurance expense $3,000, Credit Prepaid insurance $3,000 b. Debit Insurance expense $4,000, Credit Prepaid insurance $4,000 c. Debit Prepaid insurance $3,000, Credit Insurance expense $3,000 d. Debit Prepaid insurance $7,000, Credit Insurance expense $7,000 10) This concept requires that revenues and expenses be recorded in the proper period. a. Accounting b. Matching c. Cost d. Revenue Recognition

11) Under this basis, revenues and expenses are recorded in the period in which cash is received or paid.

a. Accrual

b. Matching

c. Cash

d. Rule of debit and credit