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TEST 2 DIRECTIONS: Each question or incomplete statement is followed by several suggested answers or completions. Select the one that BEST answers the question or completes the statement. PRINT THE LETTER OF THE CORRECT ANSWE IN THE SPACE AT THE RIGHT Questions 1-4. In the audi it of the Audell Co. for the calendar year 2004, the accountant noted the follow ing errors: An adjusting entry for $10 for int note was not recorded at the end of December 2003. In 2004 the total interest received was credited to Interest Income erest accrued on a customer's $4,000, 60-day, 6% pment was leased on December 1, 2003, and rental of $300 was paid in advance for the next three months and charged to Rent Expense. On November 1, 2003, space was rented at $75 per month. The tenant paid six months rent in advance which was credited to Rent Income. Salary expenses in the amount of $60 were not recorded at the end of 2003. Depreciation in the amount of $80 was not recorded at the end of 2003. An error of $200 in addition on the year-end 2003 physical inventory sheets was made. The inventory was overstated . . . . 1. The amount of the net adjustment to Net Income for 2003 is A. Credit $430 C. Credit $600 B. Debit $430 D. Credit $560 2. The net change in asset values at December 31, 2003 is A. Credit $70 C. Debit $110 B. Debit $70 D. Credit $60 3. The net change in liabilities at December 31, 2003 is A. Debit $360 C. Debit $560 B. Credit $430 D. Credit $360 4. The net change in Owner's Equity at December 31, 2003 is A. Debit $710 C. Credit $320 B. Debit $430 D. Credit $710