5) Which of the following accounts has a normal debit balance?

Accrued taxes.

Advertising expense.

Accumulated depreciation.

Accounts payable.

6) XYZ Corporation receives $100,000 from investors for issuing them shares of its stock. XYZ's journal entry to record this transaction would include a:

Credit to revenue.

Credit to capital stock.

Credit to retained earnings.

Debit to investments.

7) An economic resource of an entity is:

A revenue.

An asset.

A liability.

A contra asset until used.

8) Somerset Leasing received $12,000 for 24 months' rent in advance. How should Somerset record this transaction?

Interest expense	12,000
Interest payable		12,000

Salaries expense	12,000
Salaries payable		12,000

Cash	12,000
Deferred revenue		12,000

Prepaid rent	12,000
Rent expense		12,000

9) The employees of Neat Clothes work Monday through Friday. Every other Friday the company issues payroll checks totaling $32,000. The current pay period ends on Friday, July 3. Neat Clothes is now preparing quarterly financial statements for the three months ended June 30. What is the adjusting entry to record accrued salaries at the end of June?

Salaries expense	6,400
Salaries payable		6,400

Salaries expense	22,400
Prepaid salaries	9,600
Salaries payable		32,000

Salaries expense	22,400
Salaries payable		22,400

Prepaid salaries	9,600
Salaries payable		9,600

10) An example of a contra account is:

Accumulated depreciation.

Sales revenue.

Depreciation expense.

Accounts receivable.