1. Which of the following are adjusting entries?

a) Record office supplies purchased on account mid- month.

b) Adjust prepaid assets

c) Record the initial sale of shares

d) Record dividends

2. Which of the below account type increases and decreases in the same way as assets?

a) Liabilities

b) Expenses

c) Share Capital

d) Revenues

3. The unadjusted trial balance has unearned revenue of $2,500. We are told $1,800 of this was

earned at year end. What would adjusting entry be?

a) Debit revenue $700 and credit unearned revenue $700.

b) Credit revenue $700 and debit unearned revenue $700.

c) Debit unearned revenue $1,800 and credit revenue $1,800.

d) Credit unearned revenue $1,800 and debit revenue $1,800.

4. On XYZ Companys unadjusted trial balance at December 31, 2022 prepaid insurance was $3,600. The policy was taken out October 1, 2022. Which of the following is true if the prepaid adjusting entry was not recorded at December 31, 2022?

a) Revenues were overstated and liabilities were understated.

b) Assets were understated and retained earnings were understated.

c) Liabilities were overstated and cash was understated.

d) Expenses were understated and assets were overstated.

5. Which of the following is not a temporary account?

a) Prepaid Insurance

b) Expenses

c) Dividends

d) Revenue

6. An economic activity is recognized when it meets the following two criteria: it is probable that any future economic benefit associated with the item will flow to the

business; and it has a value that can be measured with reliability

TRUE OR FALSE

7. We record depreciation by debiting depreciation expense and crediting

cash. TRUE OR FALSE

8. Dividends are closed to the income summary account at year end. TRUE OR FALSE