c. Circle the correct answer (2 points each). 1. An adjusting entry should never include a. a debit to an expense account and a credit to a liability account. b. a debit to an expense account and a credit to a revenue account a debit to a liability account and a credit to revenue account. d. a debit to an expense account and a credit to asset account. 2. A trial balance may prove that debits and credits are equal, but an amount could be entered in the wrong account. b. a transaction could have been entered twice. a transaction could have been omitted. d. All of these answer choices are correct. a. C. 3. Maso Company recorded journal entries for the issuance of common stock for $200,000, the payment of $65,000 for a truck, and the payment of salaries expense of $105,000. What net effect do these entries have on stockholders' equity? a. Increase of $200,000. b. Increase of $135,000. c. Increase of $95.000. d. Increase of $30,000 4. a. Panda Corporation paid cash of $120,000 on June 1, 2021 for one year's rent in advance and recorded the transaction with a debit to Prepaid Rent. The December 31, 2021 adjusting entry is debit Prepaid Rent and credit Rent Expense, $50,000. b. debit Prepaid Rent and credit Rent Expense, $70,000 debit Rent Expense and credit Prepaid Rent, $70,000. d. debit Prepaid Rent and credit Cash, $50,000. 0. 5. Tate Company purchased equipment on November 1, 2020 and gave a 3-month, 9% note with a face value of $80,000. The December 31, 2020 adjusting entry is a debit Interest Expense and credit Interest Payable, $7,200. b. debit Interest Expense and credit Interest Payable, $1,800. c. debit Interest Expense and credit Cash, $1,200. d. debit Interest Expense and credit Interest Payable, $1,200. 6. Which of the following is a required disclosure in the income statement when reporting the disposal of a component of the business? The gain or loss on disposal should be reported as an unusual gain or loss. b. Results of operations of a discontinued component should be disclosed immediately before income from continuing operations. c. Earnings per share from continuing operations, discontinued operations, and net income should be disclosed on the face of the income statement. d. The gain or loss on disposal should not be segregated, but should be reported together with the results of continuing operations