Instructions: Designate the best answer for each of the following questions. 1. "GAAP" refers to a. General Accounting and Auditing Principles. b. Guidelines for American Accounting Procedures. c. General Association of Accounting Practitioners. d. None of these answer choices are correct..! . 2. The requirement that only transaction data capable of being expressed in terms of money be included in the accounting records relates to the a. historical cost principle. b. monetary unit assumption. c. economic entity assumption. d. both the historical cost principle and the monetary unit assumption, 3. The initials "CPA' stand for a. Certified Practical Auditor. b. Chartered Public Auditor. c. Certified Public Accountant. d. Can't Pass Accounting. 4. Which of the following is not an external user of accounting data? a. Company officers b. Regulatory agency c. Labor union d. Taxing authority 5. Which of the following is not generally understood to be a major service of a public accounting firm? a. Auditing b. Taxation c. Budgeting d. Management consulting PART III-ADJUSTING ENTRIES (24 points) The ledger accounts given below, with an identification number for each, are used by Riley Company. Instructions: Prepare appropriate adjusting entries for the year ended December 31, 2015, by placing the appropriate identification number(s) in the debit and credit columns provided and the dollar amount in the adjoining column. Item O is given as an example. 1. Notes Receivable 2. Accounts Receivable 3. Interest Receivable 4. Supplies 5. Prepaid Insurance 6. Equipment 7. Accumulated Depreciation Equipment 8. Salaries and Wages Payable 9. Interest Payable 10. Unearned Service Revenue 11. Notes Payable 12. Interest Revenue 13. Service Revenue 14. Depreciation Expense 15. Salaries and Wages Expense 16. Interest Expense 17. Supplies Expense 18. Insurance Expense Dollar Amount Entry Information Account(s) Account(s) Debited Credited 3 . 12 0. Interest of $500 is accrued on a note receivable at December 31, 2015. $500 1. Riley has three employees who each earn $120 per day. At December 31, four days' salaries have been earned but not paid. 2. A customer paid Riley $ 16,000 on December 1, 2015, for services to be rendered from December 1 through January 31, 2016. The receipt was credited to a liability account. Half of the services were rendered in December. 3. Riley purchased equipment costing $48,000 on January 1, 2014. Monthly depreciation is $400. 4. Riley provided services to a customer in 2015 at a fee of $500. This fee has not yet been received or billed. 5. Riley started the year with no supplies on hand. They purchased $6,000 in supplies during the year and have $1,500 on hand at December 31. Supplies were debited to an asset account when purchased. 6. Riley paid $15,000 for a three-year insurance policy on July 1, 2015, debiting an asset account at that time. 7. Riley borrowed $30,000 by signing a three-month, 6% Interest, note payable on November 1, 2015. 8. Riley purchased short-term investments on November 1, 2015. Interest of $300 per month has been earned but not received prior to December 31
