7. At December 31, 2023, before any year-end adjustments, Dallis Company's Prepaid Insurance account had a balance of $2,900. It was determined that $1,300 of the Prepaid Insurance had expired. The adjusted balance for Insurance Expense for the year would be: a. $1,300. b. $1,600. c. $2,900. d. $1,400. 8. Waltz Company had the following transactions during 2023: - Sales of $10,800 on account - Collected $4,800 for services to be performed in 2024 - Paid $3,100 cash in salaries for 2023 - Paid for $600 in advertising to be placed in 2024 What is Waltz's 2013 net income using accrual accounting? a. $8,300 b. $13,100 c. $12,500 d. $7,700 9. If a company fails to adjust a Prepaid Rent account for rent that has expired, what effect will this have on that month's financial statements? a. Failure to make an adjustment does not affect the financial statements. b. Expenses will be overstated and net income and stockholders' equity will be under-stated. c. Assets will be overstated and net income and stockholders' equity will be understated. d. Assets will be overstated and net income and stockholders' equity will be overstated. 10. Walton Company collected $9,600 in May of 2023 for 4 months of service which would take place from October of 2023 through January of 2024 . The revenue reported from this transaction during 2013 would be: a. $0. b. $7,200. c. $9,600. d. $2,400 1. Which statement is correct? a. Accumulated Depreciation should always have a debit balance in the adjusted trial b. balance. b. Accumulated Depreciation is added to the long-term liabilities on the balance sheet. c. Accumulated Depreciation represents the total depreciation taken since an asset's. d. acquisition. d. Accumulated Depreciation represents the total depreciation taken for the current year. 2. At the end of the fiscal year, the usual adjusting entry for depreciation on equipment was omitted. Which of the following statements is true? a. Net income will be overstated for the current year. b. Total assets will be understated at the end of the current year. c. The balance sheet and income statement will be misstated but the Retained Eamings Statement will be correct for the current year. d. Total expenses will be overstated at the end of the current year. 3. Mary Richardo has performed $500 of CPA services for a client but has not billed the client as of the end of the accounting period. What adjusting entry must Mary make? a. An adjusting entry is not necessary. b. Debit Accounts Receivable and credit Uneamed Service Revenue c. Debit Accounts Receivable and credit Service Revenue d. Debit Unearned Service Revenue and credit Service Revenue 4. Accrued revenues are: a. received and recorded as liabilities before they are recognized. b. recognized and recorded as liabilities before they are received. c. eamed but not yet received or recorded. d. earned and already received and recorded. 5. A furniture factory's employees work overtime to finish an order that is sold and shipped on January 31. The office sends a statement to the customer in early February and payment is received by mid-February. The overtime wages should be expensed in: a. January. b. February. c. the period when the workers receive their checks. d. either January or February depending on when the pay period ends. 6. At March 1, I. Repo Inc. reported a balance in Supplies of $200. During March, the company purchased supplies for $950 and used supplies of $700. If no adjusting entry is made for supplies: a. stockholders' equity will be overstated by $700. b. expenses will be understated by $950. c. assets will be understated by $450. d. net income will be understated by $700
