5. Adjusting entries often are needed because:

a. there are never enough accounts to record all the transactions.

b. many transactions affect more than one time period.

c. there are always errors made in recording transactions.

d. management can't decide what they want to report.

8. Barnes Company showed the following balances at the end of its first year:

Cash $14,000

Prepaid insurance 700

Accounts receivable 3,500

Accounts payable 2,800

Notes payable 4,200

Common stock 5,400

Dividends 700

Revenues 24,000

Expenses 17,500

What did Barnes Company show as total credits on its trial balance? Assume normal balances in every account

a. $37,100

b. $36,400

c. $35,700

d. $37,800

10. La More Company had the following transactions during 2016:

Sales of $4,500 on account

Collected $2,000 for services to be performed in 2017

Paid $1,375 cash in salaries for 2016

Purchased airline tickets for $250 in December for a trip to take place in 2017

What is La Mores 2016 net income using accrual accounting?

a. $3,375

b. $5,375

c. $5,125

d. $3,125

13. The journal entry to record a return of merchandise purchased on account under a perpetual inventory system would credit

a. Accounts Payable.

b. Purchase Returns and Allowances.

c. Sales Revenue.

d. Merchandise Inventory.

14. The collection of an $1,500 account within the 2 percent discount period will result in a

a. debit to Sales Discounts for $30.

b. debit to Accounts Receivable for $1,470.

c. credit to Cash for $1,470.

d. credit to Accounts Receivable for $1,470.

15. Dobler Company uses a periodic inventory system. Details for the inventory account for the month of January 2017 are as follows:

Units Per unit price Total

Balance, 1/1/2017 200 $5.00 $1,000

Purchase, 1/15/2017 100 5.30 530

Purchase, 1/28/2017 100 5.50 550

An end of the month (1/31/2017) inventory showed that 160 units were on hand. If the company uses FIFO, what is the value of the ending inventory?

a. $880

b. $800

c. $868

d. $1,212