16. As prepaid expenses expire with the passage of time, the correct adjusting entry will be

a. debit to an asset account and a credit to an expense account.

b. debit to an expense account and a credit to an asset account.

c. debit to an asset account and a credit to an asset account.

d. debit to an expense account and a credit to an expense account.

17. Based on the following data, what is the amount of current liabilities?

Accounts payable.. $62,000

Accounts receivable.. 100,000

Cash. 70,000

Unearned revenue 10,000

Inventory. 138,000

Long-term investments. 160,000

Long-term liabilities 200,000

Short-term investments. 80,000

Notes payable. 56,000

Property, plant, and equipment 1,340,000

Prepaid insurance.. 2,000

a. $118,000

b. $128,000

c. $328,000

d. None of the above

18. Which of the following is not a current liability?

a. unearned revenue

b. accounts payable

c. notes payable (debt due 3 years from now)

d. notes payable (debt due 3 months from now)

19. The Vintage Laundry Company purchased $7,500 worth of laundry supplies on June 2 and recorded the purchase as an asset. On June 30, an inventory of the laundry supplies indicated only $2,000 on hand. The adjusting entry that should be made by the company on June 30 is:

a. debit Laundry Supplies Expense, $2,000; credit Laundry Supplies, $2,000.

b. debit Laundry Supplies, $5,500; credit Laundry Supplies Expense, $5,500.

c. debit Laundry Supplies, $2,000; credit Laundry Supplies Expense, $2,000.

d. debit Laundry Supplies Expense, $5,500; credit Laundry Supplies, $5,500

20. Under the perpetual method of accounting for inventory, when a sale is made on account the following journal entry or journal entries are made;

a. Sales

Cost of merchandise sold

b. Cash

Sales

AND

Cost of merchandise sold

Merchandise inventory

c. Accounts receivable

Sales

AND

Cost of Merchandise sold

Merchandise Inventory

d. Accounts receivable

Sales