A journal entry for a

$270

payment to purchase office supplies was erroneously recorded as a debit to Office Supplies for

$510

and a credit to Cash for

$270.

Which of the following statements correctly states the effect of the error on the trial balance?

A.

The sum of the credits will exceed the sum of the debits by

$240.

B.

The sum of the debits will exceed the sum of the credits by

$510.

C.

The sum of the debits will exceed the sum of the credits by

$270.

D.

The sum of the debits will exceed the sum of the credits by

$240.

Murphy, Inc. prepaid

$9,600

on October 1, 2018 for a

oneyear

insurance premium. Coverage begins October 1. On January 1, 2019 (after December 31 adjustments), the Prepaid Insurance account will have a debit balance of ________. (Round any intermediate calculations to two decimal places, and your final answer to the nearest whole number.)

A.

$10,400

B.

$7,200

C.

$8,000

D.

$9,600

The equity of Alliance Company is

$130,000

and the total liabilities are

$30,000.

The total assets are ________.

A.

$260,000

B.

$60,000

C.

$160,000

D.

$100,000

Martinville, Inc. earned revenues of

$11,000

and incurred expenses of

$9,000.

The company declared and paid cash dividends of

$2,500.

What is the balance in the Income Summary account prior to closing net income or loss to the Retained Earnings account?

A.

credit balance of $2,000

B.

debit balance of $(500)

C.

credit balance of $11,000

D.

debit balance of

Johnson Waterworks Corporation provides plumbing services. Transactions during the first year of operations are provided below.

a) Received

$10,000

cash and issued common stock to Mitchell Johnson.

b) Paid

$1,400

for equipment to be used for plumbing repairs.

c) Borrowed

$10,000

from a local bank and deposited the money in the checking account.

d) Paid

$400

in rent for the year.

e) Paid

$200

for plumbing supplies to be used on various jobs next year.

f) Completed a plumbing repair for a law firm and received

$3,000.

Calculate the amount of total assets at the end of the first year. Assume the plumbing supplies of

$200

are left at the end of the year.

A.

$1,600

B.

$22,600

C.

$1,400

D.

The Interest Expense in the worksheet's unadjusted trial balance column is

$6,000.

Interest Expense in the income statement column is

$12,000.

Which of the following entries would have caused this difference?

A.

a

$6,000

credit to Interest Expense in the worksheet's adjustments column

B.

a

$12,000

credit to Interest Payable in the worksheet's adjustments column

C.

a

$12,000

credit to Interest Expense in the worksheet's adjustments column

D.

a

$6,000

debit to Interest Expense in the worksheet's adjustments column

The following are the current month's balances for selected accounts of Sandlin Marketing Company.

Accounts Payable	$8,000
Revenue	10,000
Cash	9,350
Expenses	1,400
Furniture	11,000
Accounts Receivable	14,000
Common Stock	10,250
Notes Payable	7,500

What is the net income for Sandlin Marketing for the current month?

A.

$19,350

B.

$10,000

C.

$8,600

A business purchased equipment for

$135,000

on January 1, 2019. The equipment will be depreciated over the five years of its estimated useful life using the

straightline

depreciation method. The business records depreciation once a year on December 31. Which of the following is the adjusting entry required to record depreciation on the equipment for the year 2019? (Assume the residual value of the acquired equipment to be zero.)

A.

Debit

$135,000

to Depreciation

ExpenseEquipment,

and credit

$135,000

to Accumulated

DepreciationEquipment.

B.

Debit

$135,000

to Equipment, and credit

$135,000

to Cash.

C.

Debit

$27,000

to Depreciation

ExpenseEquipment,

and credit

$27,000

to Accumulated

DepreciationEquipment.

D.

Debit

$27,000

to Depreciation Expense, and credit

$27,000

to Equipment.

The assets of Star Company are

$130,000

and the total liabilities are

$40,000.

The equity is ________.

A.

$40,000

B.

$170,000

C.

$130,000

D.

Dynamic Production Services started the year with total assets of

$110,000

and total liabilities of

$40,000.

The revenues and the expenses for the year amounted to

$150,000

and

$70,000,

respectively. During the year, the company did not issue any common stock, but it distributed dividends of

$50,000.

Calculate Dynamic's net income for the year.

A.

$80,000

B.

$150,000

C.

$110,000

D.

Saturn, Inc. paid

$13,000

on accounts payable. How does this transaction affect the accounting equation of Saturn?

A.

assets increase by

$13,000

and equity decreases by $13,000

B.

assets decrease by

$13,000

and equity increases by $13,000

C.

assets decrease by

$13,000

and liabilities decrease by $13,000

D.

assets increase by

$13,000

and liabilities increase by

On December 31, 2018 the balance in Energy Exploration Company's Unearned Revenue account was a credit of

$6,000.

In January, 2019, the company received an advance payment of

$10,000

from a new customer for services to be performed. By January 31, adjustments were made to recognize

$5,000

of the revenue that had been earned during January. What was the balance in Unearned Revenue on January 31, 2019?

A.

$5,000

credit

B.

$11,000

credit

C.

$6,000

credit

Global Enterprises, Inc. signed a

oneyear

$47,000

note payable at

6%

interest on April 1, 2018. If Global only adjusts its accounts once a year at

yearend,

how much interest expense was accrued on December 31, 2018? (Round any intermediate calculations to two decimal places, and your final answer to the nearest whole number.)

A.

$705

B.

$2,820

C.

$2,350

D.

$2,115

Regent Plumbing Corporation provides plumbing services. Selected transactions of Regent Plumbing Corporation are described as follows:

a) Received

$9,000

cash and issued common stock to Sharon Regent.

b) Paid

$4,000

cash for equipment to be used for plumbing repairs.

c) Borrowed

$12,000

from a local bank and deposited the money in the checking account.

d) Paid

$600

rent for the year.

e) Paid

$200

cash for plumbing supplies to be used next year.

f) Completed a plumbing repair project for a local lawyer and received

$4,000

cash.

Calculate the net income. Assume plumbing supplies of

$200

are left at the end of the accounting period.

A.

$400

B.

$4,000

C.

$3,800

D.

$3,400

Watson Foods, Inc. reported the following transactions for September 2019.

a)	The business received $21,000 cash and issued common stock. It was credited to Common Stock.
b)	The business purchased office equipment for $10,000 for which $3,500 cash was paid and the balance was put on a note payable.
c)	Paid insurance expense of $1,700 cash.
d)	Paid the September utility bill for $800 cash.
e)	Paid $1,800 cash for September rent.
f)	The business had sales of $9,000 in September. Of these sales, 60% were cash sales, and the balance was credit sales.
g)	The business paid $6,000 cash for office furniture.

What are the total liabilities at the end of September, 2019?

A.

$9,000

B.

$1,700

C.

$6,500

D.

$10,000