1.Kareem's Consulting (KC) prepares annual financial statements at December 31 of each year. The following paragraph gives you information necessary to determine any necessary adjusting entries for KC at 12/31/2005.

On January 1, 2005, KC had $4000of office supplies on the shelf. During 2005, KC purchased $11300of office supplies. On December 31, there were $1720of office supplies that were still unused.

How do you record the adjusting entry?

For each question choose the TWO parts from the list that would represent the correct adjusting entry. If no adjustment is necessary, choose that as the correct answer.

Credit supplies $11300

Credit supplies $1720

Debit supplies expense $1720

Credit supplies $13580

Debit supplies expense $11300

No adjusting entry is necessary

Debit supplies expense $13580

2.

Kareem's Consulting (KC) prepares annual financial statements at December 31 of each year. The following paragraph gives you information necessary to determine any necessary adjusting entries for KC at 12/31/2005.

OnNovember1, 2005, Kareem's Consulting borrowed $100000on a18month Note Payable with a6% annual interest rate. Principle and interest will be paid in full on the maturity date of the note.

How do you record the adjusting entry at 12/31/2005?

For each question choose the TWO parts from the list that would represent the correct adjusting entry. If no adjustment is necessary, choose that as the correct answer.

Debit interest expense $1000

Debit interest expense $6000

No adjusting entry is necessary

Credit cash $9000

Credit cash $1000

Debit interest expense $9000

Credit cash $6000

Credit interest payable $6000

Credit interest payable $1000

Credit interest payable $9000

3.

Top of Form

Kareem's Consulting (KC) prepares annual financial statements at December 31 of each year. The following paragraph gives you information necessary to determine any necessary adjusting entries for KC at 12/31/2005.

Early in 2005, KC received $120000in advance for agreeing to provide15consulting sessions for employees of a client. By December 31, KC had completed6of the consulting sessions.

How do you record the adjusting entry?

For each question choose the TWO parts from the list that would represent the correct adjusting entry. If no adjustment is necessary, choose that as the correct answer.

Credit consulting revenue $72000

Debit unearned revenue $72000

Credit consulting revenue $120000

Debit unearned revenue $48000

No adjusting entry is necessary

Debit unearned revenue $120000

Credit consulting revenue $48000

Bottom of Form

4.

Kareem's Consulting (KC) prepares annual financial statements at December 31 of each year. The following paragraph gives you information necessary to determine any necessary adjusting entries for KC at 12/31/2005.

OnSeptember1, 2005 KC pays $6000for a 6 month lease.

How do you record the adjusting entry?

For each question choose the TWO parts from the list that would represent the correct adjusting entry. If no adjustment is necessary, choose that as the correct answer.

Credit prepaid rent $4000

Debit rent expense $2000

No adjusting entry is necessary

Debit rent expense $4000

Credit prepaid rent $2000

Credit prepaid rent $6000

Debit rent expense $6000

5. Kareem's Consulting (KC) prepares annual financial statements at December 31 of each year. The following paragraph gives you information necessary to determine any necessary adjusting entries for KC at 12/31/2005.

On December 1, KC hired a new consultant for $3500per month.The consultant will start work on January 1, 2006, and did not receive any wages from KC prior to that date.

How do you record the adjusting entry at 12/31/2005?

For each question choose the TWO parts from the list that would represent the correct adjusting entry. If no adjustment is necessary, choose that as the correct answer.

Debit cash $3500

Debit wage payable $3500

Credit wage payable $3500

Credit cash $3500

No adjusting entry is necessary

Credit wage expense $3500

Debit wage expense $3500

6.

Kareem's Consulting (KC) prepares annual financial statements at December 31 of each year. The following paragraph gives you information necessary to determine any necessary adjusting entries for KC at 12/31/2005.

OnMay1, 2005, Kareem's Consulting invested $10000in a 12 month Certificate of Deposit with a12% annual interest rate. KC will receive the interest at the end of one year.

How do you record the adjusting entry at 12/31/2005?

For each question choose the TWO parts from the list that would represent the correct adjusting entry. If no adjustment is necessary, choose that as the correct answer.

Credit interest payable $800

Debit interest expense $800

No adjusting entry is necessary

Debit cash $1200

Credit interest revenue $1200

Debit interest receivable $1200

Debit interest receivable $800

Debit cash $800

Credit interest revenue $800

7.

Kareem's Consulting (KC) prepares annual financial statements at December 31 of each year. The following paragraph gives you information necessary to determine any necessary adjusting entries for KC at 12/31/2005.

KC pays clerical employees every Friday for that week's work. The company has a 5 day work week from Monday-Friday and has a daily payroll of $2000. December 31, 2005 falls on aWednesday.

How do you record the adjusting entry at 12/31/2005?

For each question choose the TWO parts from the list that would represent the correct adjusting entry. If no adjustment is necessary, choose that as the correct answer.

Credit cash $4000

Credit wage payable $4000

Credit cash $10000

Debit wage expense $10000

Debit wage expense $4000

Credit cash $6000

No adjusting entry is necessary

Credit wage payable $10000

Debit wage expense $6000

Credit wage payable $6000

8.

You increase an asset account with a debit.

True

False

9. The normal balance for an expense account is a credit.

True

False