MULTIPLE CHOICE (please also explain it so i can study it later! thanks)

1. A law firm began November with office supplies of P1,600. During the month, the firm purchased supplies of P2,900. At November 30 supplies on hand total P2,100. Supplies expense for the period is:

A. 4,500

B. 2,900

C. 2,400

D. 2,100

2. A building that cost P120,000 has accumulated depreciation of P50,000. The book value of the building is:

A. 170,000

B. 120,000

C. 70,000

D. 50,000

3. The adjusting entry to accrue salary expense:

A. Debits salary payable and credits cash

B. Debits salary expense and credits salary payable

C. Debits salary expense and credits cash

D. Debits salary payable and credits salary expense

4. A business receives cash of P3,000 in advance for services that will be provided later. The cash receipt entry debited Cash and credited Unearned Revenue of P3,000. At the end of the period, P1,100 is still unearned. The adjusting entry for this situation will:

A. Debit Revenue and credit Unearned Revenue for P1,900

B. Debit Revenue and credit Unearned Revenue for P1,100

C. Debit Unearned Revenue and credit Revenue for P1,900

D. Debit Unearned Revenue and credit Revenue for P1,100

5. The book value of the plant asset at the start of the year is P480,000. The depreciation rate is 2% per year. The book value at the end of the year is P470,000. If there are no additions and disposals of assets, the depreciation expense would be:

A. 9,600

B. 9,400

C. 10,000

D. 1,000

6. The prepaid rent is P12,000 good for three months starting November 30, 2007. The balance sheet date is December 31, 2007. The prepayment was recorded under asset method. The correct expense for the given period would be:

A. 4,000

B. 8,000

C. 12,000

D. 16,000

7. The 90-day interest bearing note amounting to P50,000 was issued on November 30, 2007. The prevailing interest rate is 12%. The accrued interest as of December 31, 2007 is:

A. 500

B. 1,000

C. 1,500

D. 250

8. The beginning balance of unused supplies is P500. During the period, the total purchases of supplies amounted to P2,000 initially recorded as asset. At the end of the period, the actual unused supplies are P200. The supplies expense to be reported for the period is:

A. 200

B. 500

C. 1,800

D. 2,300

9. The business received a 90-day promissory note of P20,000, carrying an interest of 12% per year. The promissory note is dated May 1, 2007 and the balance sheet of the business is June 30, 2007. The accrued income is:

A. 200

B. 400

C. 800

D. 1,600

10. Accrued revenue to be recorded will:

A. decrease asset

B. increase assets

C. decrease liabilities

D. increase expense