multiple-choice questions Financial Accounting for Business about ( Accrual Accounting)

1)On June 1, 20x7, Cambo Corp. paid an annual business insurance premium of $19012. At the time, the bookkeeper debited insurance expense and credited cash. It is now December 31, 20x7 and the adjusting entries are being prepared. Which of the following entries would adjust the prepaid insurance and insurance expense accounts to the appropriate balances?

Select one:

a. Debit insurance expense $11090; Credit prepaid insurance $11090

b. Debit insurance expense $7922; Credit prepaid insurance $7922

c. Debit prepaid insurance $11090; Credit insurance expense $11090

d. Debit prepaid insurance $7922; Credit insurance expense $7922

2)On October 31, 20x4, you lend $ 1570191 to another company for one year. At October 31, 20x5, you will receive the $1570191 plus 6% interest. The December 31, 20x4 adjusting entry will include a credit to:

Select one:

a. Interest revenue in the amount of $23553

b. Interest revenue in the amount of $15702

c. Interest receivable in the amount of $15702

d. Interest receivable in the amount of $23553

3)An analysis of Thrift Corp.'s unadjusted prepaid expense account at December 31, 20x1, revealed the following:

An opening balance of $ 2303 for Thrift's comprehensive insurance policy. Thrift had paid an annual premium of $ 4606 on July 1, 20x0

A $ 1580 annual insurance premium payment made July 1, 20x1

A $ 2063 advance rental payment for a warehouse Thrift leased for one year beginning January 1, 20x2

In its December 31, 20x1 statement of financial position, what amount should Thrift report as prepaid expenses?

Select one:

a. $ 790

b. $ 3643

c. $ 2063

d. $ 2853

4)

A company started the year with $47246 in supplies. During the year, it purchased $142146 in supplies and these were charged to the supplies expense account. At year-end, there was $22595 in supplies remaining. The year-end adjusting entries will include the following entry to the supplies inventory account:

Select one:

a. $166797 dr.

b. $24651 cr.

c. $24651 dr.

d. No adjusting entry is needed.

5)On August 31, 20x5, you receive $ 20952 in advance for rental income on a property for the period August 31, 20x5 to February 28, 20x6. The entire amount was credited to unearned rental income. The December 31 adjusting entry will include a debit to:

Select one:

a. Rental income in the amount of $6984

b. Rental income in the amount of $13968

c. Unearned rental income in the amount of $13968

d. Unearned rental income in the amount of $6984