Question 4

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On March 31, Calvin Co owed employees $800 in salaries that the company will pay in April. What is the adjusting entry that will be required (if any) on March 31 in the quarterly financial statements?

Select one:

Increase Salary expense; decrease Accounts payable with $800

Increase Salary payable and decrease Salary expense with $800

Increase Salary expense and decrease cash with $800

Increase Salary expense and increase Salary payable with $800

None of the above because no entry is required.

Question 5

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When a company receives the service and a bill for electricity consumed, but does not pay it right away, the required journal entry is:

Select one:

Debit expense; credit accounts receivable

Debit Prepaid expense; credit accounts payable

Debit expense; credit accounts payable

Debit expense; credit prepaid expense

None of the above because no entry is required

Question 6

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On January 1, Calvin Company borrowed $30,000 from a local bank on a 15 year note. The annual interest rate is 10%. What (if any) adjusting entry is required on January 31? (Assume the interest owing is $250).

Select one:

Debit Interest expense and Credit Cash $250

Debit Loan payable and Credit Interest payable $250

Debit Interest expense and Credit Interest payable $250

Debit Interest payable and Credit Loan payable $250

None of the above because no journal entry is required

Question 7

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The accounting principle under which the losses arising from events such as the death of a president are not shown on the income statement is:

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The going concern concept

The monetary unit principle

The economic entity concept

The cost principle

The conservatism concept

Question 8

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Which of the following accounts is an asset?

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Unearned revenue

Notes payable

Capital

Prepaid rent

None of the above are assets

Question 9

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The purchase of an asset on account

Select one:

Increases assets and increases owner's equity

Increases assets and increases liabilities

Decreases assets and increases liabilities

Leaves total assets unchanged

None of the above