5.All of the following are examples of prepaid expenses except:

a.prepaid rent.

b.prepaid insurance.

c.supplies.

d.unearned revenues.

6.Depreciation is:

a.the wearing away of an asset.

b.the process of an asset becoming obsolete.

c.a valuation process.

d.The process of allocating the cost of an asset to expense over its useful life.

7.Accumulated depreciation is a:

a.contra asset account.

b.contra revenue account.

c.unearned revenue account.

d.expense account.

8.Which of the following companies would probably not have unearned revenue:

a.Delta Airlines.

b.Hurst Publishing Company.

c.Poppa John's Pizza.

d.All State Insurance Company.

9.Adjusting entries for accruals:

a.are required in order to record revenues for services performed and expenses incurred in the current accounting period that have not been recognized through daily entries and thus are not yet reflected in the accounts.

b.will increase both a balance sheet and an income statement account.

c.are not required under GAAP.

d.both are required in order to record revenues for services performed and expenses incurred in the current accounting period that have not been recognized through daily entries and thus are not yet reflected in the accounts and will increase both a balance sheet and an income statement account are correct.

10.An assumption that the economic life of a business can be divided into artificial time periods is the:

a.cash basis assumption.

b.accrual assumption.

c.calendar year assumption.

d.periodicity assumption.