The accrual adjustment recorded to adjust for revenues earned but not yet

collected will cause:

A

assets to increase

B

assets to decrease

C

liabilities to increase

D

liabilities to decrease

On December 31, the Human Bean Coffee Shop paid $12,000 for a full year of

rent beginning on January 1. The rent payment was appropriately recorded in the

Cash and Prepaid Rent accounts. If financial statements are prepared on January 31,

the journal entry to record the adjustment would be:

A

Debit Rent Expense and credit Prepaid Rent for $12,000.

B

Debit Prepaid Rent and credit Rent Expense for $12,000.

C

Debit Rent Expense and credit Prepaid Rent for $1,000.

D

Debit Prepaid Rent and credit Rent Expense for $1,000.

The Accumulated Depreciation account is a(n):

A

expense account.

B

liability account.

C

asset account.

D

contraasset account.

The adjusting entry to record services earned but not yet billed requires:

A

a debit to Accounts Receivable and credit to Service Revenue

B

a debit to Service Revenue and credit to Accounts Receivable

C

a debit to Accounts Payable and credit to Service Revenue

D

no entry since revenues should not be recorded until collected

Which of the following statements about the closing process is correct?

A

Closing entries are recorded at the end of each reporting period which could be monthly, quarterly

or annually.

B

After closing entries are posted, the balances of the income statement accounts will be zero.

C

Closing entries are made to zero out the balances of the permanent accounts on the balance sheet.

D

After closing entries are posted, the only temporary account with a balance is the Dividends account.

Which account below is a temporary account?

A

Note Payable

B

Deferred Revenue

C

Accounts Receivable

D

Depreciation Expense

ates the structure of the journal entry that is used to close revenue and

expense accounts?

A

Debit Retained Earnings, credit Expenses, and credit Revenues

B

Debit Revenues, credit Expenses, and credit Retained Earnings

C

Debit Revenues, debit Expenses, and credit Retained Earnings

D

Debit Expenses, credit Revenues, and credit Retained Earnings