4. For which of the following types of adjusting entries are liabilities understated and expenses understated before the adjusting entry is made? a. Unearned Revenues b. Accrued Revenues c. Prepaid Expenses d. Accrued Expenses 5. What is the purpose of a post-closing trial balance? a. Prove that all income statement accounts have been properly posted. b. Prove the equality of income statement account balances. c. Prove the equality of all account balances. d. Prove the equality of permanent account balances. 6. An accrued revenue account represents revenue that has a. been earned and received. b. been received but not earned. c. not been earned or received. d. been earned but not received. 7. What type of relationship exists with a prepaid expense adjusting entry? a. Asset/revenue b. Expense/liability c. Asset/expense d. Liability/revenue 8. The net book value of an amortizable asset is defined as the asset's a. cost less accumulated amortization. b. current market value. c. replacement cost. d. cost. 9. Dbono Co. recorded a payment of cash on account to a creditor by debiting Accounts Receivable and crediting Cash. The correcting entry is a. debit Accounts Payable and credit Cash. b. debit Cash and credit Accounts Receivable. c. debit Accounts Payable and credit Accounts Receivable. d. Some other correcting entry is necessary. 10. Svenson Company signed a $3,000 six-month note payable on October 1 that bears interest at a rate of 8%. The total interest to be accrued on this note at December 31 is a. $30. b. $60. c. $240. d. $120. 11. Which of the following is false? a. Current assets are listed in the order of magnitude. b. Obligations expected to be paid after one year are classified as long-term liabilities. c. Intangible assets are noncurrent resources that do not have physical substance. d. Property, plant, and equipment are tangible resources of a relatively permanent nature that are used in the business and not intended for sale. 12. Omission of a prepaid expense adjusting entry will have the following effects