On April 1, 2011, the premium on a one-year insurance policy on equipment was paid amounting to $3,000. At the end of 2011 (end of the accounting period), the financial statements for 2011, would report

A) Insurance expense, $3,000; Prepaid insurance $0.

B) Insurance expense, $0; Prepaid insurance $3,000.

C) Insurance expense, $750; Prepaid insurance $2,250.

D) Insurance expense, $2,250; Prepaid insurance $750.

E) None of the above is correct.

.

5. On January 1, 2012, the ledger of Global Corporation correctly showed supplies inventory of $1,000. During 2012, supplies purchases amounted to $5,000. A count (inventory) of supplies on hand at December 31, 2012, showed $1,200. The 2012 income statement should report supplies expense amounting to

A) $ 6,000.

B) $ 5,200.

C) $ 4,800.

D) $ 4,600.

E) None of the above is correct.

6. On January 1, 2013, Street Sweepers Company purchased a new street sweeper. Cash of $30,000 was paid, and the balance of $90,000 was payable on January 31, 2014. The sweeper has an estimated useful life of four years and no residual value. Considering only these facts, depreciation expense (on the sweeper) for 2013, would be

A) $30,000.

B) $ 22,500.

C) $52,500.

D) $ 26,250.

E) None of the above is correct.

7. On December 31, 2011, (end of the accounting period), Marie Company recorded depreciation on its company truck of $100,000. Transaction analysis of the depreciation should reflect the following

A) decrease stockholders' equity and increase liabilities.

B) decrease assets and increase liabilities.

C) decrease stockholders' equity and decrease assets.

D) decrease assets and increase stockholders' equity.

E) None of the above is correct.

8.

If certain assets are partially used up during the accounting period, then:

A.	nothing is recorded on the financial statements until they are completely used up.

B.	a liability account is decreased or eliminated and an expense is recorded.

C.	an asset account is decreased or eliminated and an expense is recorded.

D.	nothing is recorded on the financial statements until they are replaced or replenished.