Test IMULTIPLE CHOICE$30$ POINTS $1.$ It is one of the adjustments of income already earned but not yet received.a$.$ Prepaymentc. Accrualb. Pre$-$collectiond. Amortization $2.$ An adjustment on expense paid but not yet consumed is called:a$.$ Prepaymentc. Accrualb. Pre$-$collectiond. Amortization $3.$ The cost of wear and tear of an asset is recorded as:a$.$ Repair and maintenance expenseb. Depreciation expensec. Consumptiond. Scrap value $4.$ The income statement contains a$/$an:a$.$ Prepaid expensec. Unused suppliesb. Unearned rentd. Expired insurance $5.$ In the balance sheet, this account will appear:a$.$ Allowance for bad debtsc. Interest incomeb. Supplies expensed. Expired insurance $6.$ A Pre$-$collection is a mixed account that is partly income and partly:a$.$ Assetc. Expenseb. Liabilityd. Revenue $7.$ Accrued revenue to be recorded will:a$.$ Decrease asset.c$.$ increase assetb. Decrease liabilitiesd. increase expense $8.$ Accrued expenses to be recorded will:a$.$ Increase assetsc. Decrease assetsb. Increase liabilitiesd. Decrease liabilities $9.$ It is one of the adjustments of income already earned but not yet received.a$.$ Prepaymentc. Accrualb. Pre$-$collectiond. Amortization $10.$ An adjustment on expense paid but not yet consumed is called:a$.$Prepaymentc. Accrualb.Pre$-$collectiond. Amortization $11.$ If the pre$-$payment is initially recorded as asset, part of the year$-$end adjustment will be a:a$.$ Debit to expensec. Credit to liabilityb. Debit to assetd. Credit to income $12.$ If the pre$-$collection is initially recorded as income, the year$-$end adjustment will require a:a$.$ Debit to incomec. Credit to assetb. Debit to liabilityd. Credit to expense $13.$ If an unpaid expense pertaining to consumption for the period is to be part of the year$-$end adjustment, this will require a:a$.$ Debit to assetc. Credit to expenseb. Debit to incomed. Credit to liability $14.$ If an allowance for doubtful accounts is to increase, this will require aa$.$ Credit to expenseb. Credit to contra asset valuation accountc. Credit to accounts receivabled. Credit to liability account $15.$ To accrue a salary incurred but yet to be paid will require aa$.$ Debit to expensec. Credit to incomeb. Debit to assetd. Credit to expense $16.$ When the year adjustment on a pre$-$collection requires a debit to liability account, then the initial recording was under the liability method.a$.$ Trueb. False $17.$ Unearned income is a revenue account.a$.$ Trueb. False $18.$ The cost of noncurrent assets is allocated throughout the useful life of the assets by debiting the annual depreciation expense account.a$.$ Trueb. False $19.$ Rent deposit is an expense account.a$.$ Trueb. False $20.$ Accumulated depreciation is a liability account.a$.$ Trueb. False $21.$ Depreciation expense is always equal to accumulated depreciation at the end of any accounting period.a$.$ Trueb. False $22.$ Salvage value is the same as scrap value for the computation of depreciable amount.a$.$ Trueb. False $23.$ Allowance for doubtful account is an expense account.a$.$ Trueb. False $24.$ Prepayments are always taken up in the books as assets at the initial recording.a$.$ True b$.$ False $25.$ Deferral is intended to recognize income earned but not yet received.a$.$ Trueb. False $26.$ Under the expense method of recording prepayments, the unexpired portion at the end of accounting period is to be debited to asset account.a$.$ Trueb. False $27.$ The cost of noncurrent asset less accumulated depreciation is called net book value.a$.$ Trueb. False $28.$ The difference between the amount of accounts receivable and allowance for doubtful accounts is called carrying amount.a$.$ Trueb. False $29.$ Adjusting entries are made to conform to the matching principle of accounting.a$.$ Trueb. False $30.$ Adjusting entries are entries made at the end of an accounting period to update some accounts and ensure their accuracy before preparing the financial statements.a$.$ Trueb. False