16.In terms of debits and credits, which types of accounts have the same (debit or credit) normal balances? dividends, expenses, assets assets, capital stock, revenues expenses, liabilities, capital stock retained earnings, dividends, liabilities

Information related to the Berkley Company for the calendar year 2015 follows:

Liabilities, December 31, 2015 $400 Assets, December 31, 2015 700 Dividends distributed during 2015 90 Liabilities, December 31, 2014 250 Assets, December 31, 2014 350

17.Assuming no capital stock was issued during 2015, the net income earned by the Berkley Company during 2015 was $260 $110 $290 $200

18.An example of a transposition is presenting the cash account at $1,500 instead of $15,000. presenting prepaid insurance at $920 instead of $290. not journalizing a sales transaction at all. incorrectly posting a credit amount as a debit amount in the general ledger.

19.Which of the following is an economic resource that should be depreciated over the accounting periods estimated to be benefited? salaries incurred but unpaid at year-end equipment purchased for use in the business operations interest revenue accrued on investment in bonds rent collected in advance for a three-year rental period

20.The Oliver Construction Company received $18,000 for six months rental income in advance on November 1, 2015, and credited the Rental Revenue account. The required adjusting entry on December 31, 2015, would include a credit to Rental Revenue for $6,000 debit to Rental Revenue for $6,000 credit to Rental Receivable for $12,000 debit to Rental Revenue for $12,000

21.On March 31, 2015, the Turi Company purchased a two-year fire insurance policy. Turi recorded the purchase by debiting Prepaid Insurance and crediting Cash for $10,000. Which of the following adjusting entries should Turi prepare at the end of 2015?

Insurance Expense 3,750 Prepaid Insurance 3,750

Insurance Expense 5,000 Prepaid Insurance 5,000

Prepaid Insurance 3,750 Insurance Expense 3,750

Prepaid Insurance 5,500 Insurance Expense 5,500

22.On April 1, 2015, Miller Company paid $6,280 for a two-year insurance policy. On that date, Miller recorded the purchase by debiting Prepaid Insurance and crediting Cash. The correct December 31, 2015, adjusting entry would be

Insurance Expense 3,925 Prepaid Insurance 3,925

Insurance Expense 2,355 Prepaid Insurance 2,355

Prepaid Insurance 2,355 Insurance Expense 2,355

Prepaid Insurance 3,140 Insurance Expense 3,140

23.On August 1, 2015, Yellow Company paid $6,320 for a three-year insurance policy. On that date, an expense account was charged. In the adjusting entry on December 31, 2015, there would be a credit to Prepaid Insurance for $527. credit to Insurance Expense for $5,442. credit to Prepaid Insurance for $2,107. debit to Insurance Expense for $175.

24.On June 1, 2015, Little Corporation received $5,320 in advance for a two-year rental of some land and properly credited Unearned Rent. In the adjusting entry at December 31, 2015, there would be a credit to Unearned Rent for $1,552 debit to Unearned Rent for $5,320 debit to Unearned Rent for $1,108 credit to Rent Revenue for $1,552

25.On May 1, 2015, Alang Corporation borrowed $3,600 on a two-year, 6% note payable. Interest is due and payable at the end of each six months. Alang makes all interest payments on schedule. The correct December 31, 2016, adjusting entry would be

Interest Expense 36 Interest Payable 36

Interest Expense 108 Cash 108

Interest Payable 144 Cash 144

Interest Expense 144 Interest Payable 144

26.The balances in deferred (unearned) revenue accounts represent amounts that are

Earned Collected I. Yes No II. Yes Yes III. No No IV. No Yes I IV III II

27.Rental receipts for the period July 1, 2015, through June 30, 2016, were collected on June 30, 2015. The effects of these economic events on the 2015 financial statements for unearned revenue and rent revenue are

Unearned Revenue Rent Revenue I. Increase Increase II. Increase Decrease III. Decrease No effect IV. Decrease Increase I II IV III

28.On the balance sheet, treasury stock is presented as a long-term investment account. contra shareholders' equity account. contra asset account. companion shareholders' equity account.

29.The ease with which an asset can be converted into cash is termed capital maintenance. liquidity. operating capability. financial flexibility.

30.Which financial statement is also called the statement of financial position? The balance sheet The statement of shareholders' equity The statement of cash flows The income statement