Question 7

1.The net income of Hendley Company for the year is $25,000. Withdrawals during the year were $30,000. No new capital contributions were made during the year. Which of the following statements is TRUE?

Hendley, Capital account decreases by $25,000.

Hendley, Capital account decreases by $5,000.

Hendley, Capital account increases by $30,000.

Hendley, Capital will remain the same.

5 points

Question 8

1.Which of the following is the most liquid asset?

Building

Prepaid Expenses

Accounts Receivable

Cash

5 points

Question 9

1.Your business advisor, a consulting company, uses reversing entries. On March 31, 2018, the bookkeeper journalized and posted the following adjusting entry to accrue Utilities Expense:

Utilities Expense

100

Utilities Payable

100

Which of the following entries is the correct reversing entry to be prepared on April 1, 2018?

Utilities Payable

100

Utilities Expense

100

Utilities Expense

100

Income Summary

100

Cash

100

Utilities Expense

100

Utilities Expense

100

Accounts Receivable

100