1. Which of the following refers to any period of time covering a complete accounting cycle?

a) A matching cycle

b) A time cycle

c) A journal period

d) A fiscal period

2. An asset's book value represents the true market value of the asset.

False

True

3. In recording the adjusting entries for depreciation, both accounts involved are increased.

False

True

4. Any additional investments by the owner should be shown as a(n)

a) addition on the Income Statement.

b) subtraction on the Statement of Owner’s Equity.

c) addition on the Statement of Owner’s Equity.

d) subtraction on the Income Statement.

5. Sunny Day Company has $740 of supplies reported on its unadjusted trial balance as of July 31. During the month of July Sunny Day Company used $325 worth of supplies. What is the entry to adjust supplies?

a) Supplies $415

Supplies Expense $415

b) Supplies Expense $325

Cash $325

c) Supplies Expense $325

Supplies $325

d) Supplies Expense $415

Supplies $415

6. The amount of net income will appear on the debit side of the Income Statement columns on a worksheet,

a) if total revenue exceeded total expenses for the period.

b) if total assets exceeded total liabilities for the period.

c) if withdrawals have been made during the period.

d) if net income exceeds the owner's withdrawals.

e) if total expenses exceeded total revenue for the period.

7. Assume that Gatesville Co. pays its employees $1,200 per day and that pay day falls on Friday. Gatesville Co. employees work Monday through Friday. Assume the last day of the fiscal period falls on Tuesday. Gatesville Co. would record an adjusting entry for the wages worked as follows:

a) Wages Expense $2,400

Cash $2,400

b) Wages Expense $2,400

Wages Payable $2,400

c) Wages Expense $6,000

Cash $6,000

d) Wages Payable $6,000

Cash $6,000