50) Failure to record an accrued revenue:

A) overstates liabilities

B) overstates revenue

C) overstates assets

D) understates assets

51) On September 1, 2010, Two Sisters Company pays $36,000 cash for six months' rent. The balance in prepaid rent on December 31, 2010, after adjustment, would be:

A) $6,000

B) $24,000

C) $12,000

D) $0

52) On November 1, 2010, Two Sisters Company pays $36,000 cash for six months' rent and debits prepaid rent at the time of the payment. The amount of the adjusting entry on December 31, 2010, would be:

A) $12,000

B) $24,000

C) $6,000

D) $0

53) Sabrina's Fabric Land bought $5,000 of equipment at the beginning of 2010. Amortization expense on the 2010 income statement is $400. What is the balance in accumulated amortization on December 31, 2010?

A) $5,000

B) $400

C) $4,600

D) $0

54) The supplies account shows a beginning balance of $3,000. Assume the supplies account shows an entry as a debit for $5,500 representing supplies purchased during the period and the supplies inventory at year end is $1,700. The adjusting entry involves a:

A) debit to supplies expense for $6,800

B) debit to supplies for $6,800

C) debit to supplies expense for $1,700

D) debit to supplies for $1,700

55) A business pays weekly salaries on Friday of $25,000 for a five-day week ending on Friday. Assuming the fiscal period ends on a Wednesday, the adjusting entry for accrued salaries would involve a:

A) debit to salary payable for $10,000

B) debit to salary expense for $15,000

C) credit to salary payable for $10,000

D) credit to salary expense for $15,000

56) Stanley Fuel Services records $8,000 of service revenue being received in advance and $4,500 of service revenue being accrued. Unearned revenue has a year-end balance of $4,900. The effect of these entries on total service revenue for the year is an increase of:

A) $7,600

B) $12,900

C) $9,400

D) $4,900

57) Stan's Shoe Repairs recorded $2,000 of unearned service revenue being earned and the collection of $4,000 cash for service revenue previously accrued. The impact of these two entries on total service revenue is:

A) a decrease of $2,000

B) an increase of $4,000

C) an increase of $6,000

D) an increase of $2,000

58) Nuyen Services Company records the payment of $500 cash for a previously accrued expense and the accrual of $325 for another expense. The impact of these two entries on total expenses and net income is:

A) Total ExpensesNet Income

B) Total ExpensesNet Income

C) Total ExpensesNet Income

D) Total ExpensesNet Income

59) At the end of the fiscal period, Wilf Carter Services omitted the adjusting entry for accrued salaries. The effect of this error on the financial statements is to:

A) overstate net income

B) understate assets

C) understate net income

D) overstate liabilities