Unit of Competence :-maintain Accrual and Cash Accounting System

Trainee's Name __________________________ ID No. ________Time All. 2 hrs

Part I.Choose the best answer

1. Which of the following items represents a deferral?

A. Prepaid insuranceB. Wage's payable

C. Fees earnedD. Accumulated depreciation

2. If the supplies account, before adjustment on May31, indicated a balance of $2,250, and supplies on hand at May 31 totaled $950, the adjusting entry would be:

A. debit Supplies, $950; credit Supplies Expense,$950.

B. debit Supplies, $1,300; credit Supplies Expense,$1,300.

C. debit Supplies Expense, $950; credit Supplies,$950.

D. debit Supplies Expense, $1,300; credit Supplies,$1,300.

3. The balance in the unearned rent account for JonesCo. as of December 31 is $1,200. If Jones Co. failed to record the adjusting entry for $600 of rent earned during December, the effect on the balance sheet and income statement for December is:

A. assets understated $600; net income overstated$600.

B. liabilities understated $600; net income understated$600.

C. liabilities overstated $600; net income understated$600.

D. liabilities overstated $600; net income overstated$600.

4. If the estimated amount of depreciation on equipment for a period is $2,000, the adjusting entry to record depreciation would be:

A. debit Depreciation Expense, $2,000; credit Equipment,$2,000.

B. debit Equipment, $2,000; credit Depreciation Expense,$2,000.

C. debit Depreciation Expense, $2,000; credit Acc.Depreciation, $2,000.

D. debit Accumulated Depreciation, $2,000; credit Depr. Expense, $2,000.

5.If the equipment account has a balance of $22,500 and its Acc. depreciation account has a balance of $14,000, the book value of the equipment is:

A. $36,500.B. $22,500C. $14,000.D. $8,500.

6. Adjustments for unearned revenues:

a. decrease liabilities and increase revenues.

b. have an assets and revenues account relationship.

c. increase assets and increase revenues.

d. decrease revenues and decrease assets.

7. Adjustments for accrued revenues:

a. have a liabilities and revenues account relationship.

b. have an assets and revenues account relationship.

c. decrease assets and revenues.

d. decrease liabilities and increase revenues.

8. Kathy Siska earned a salary of $400 for the last week of September. She will be paid on October 1. The adjusting entry for Kathy's employer at September 30 is:

a. No entry is required.

b. Salaries Expense 400

Salaries Payable 400

c. Salaries Expense 400

Cash 400

d. Salaries Payable 400

Cash 400

9. Each of the following is a major type (or category) of adjusting entries except:

a. prepaid expenses.

b. accrued revenues.

c. accrued expenses.

d. earned revenues.

10. The trial balance shows Supplies $1,350 and Supplies Expense $0. If $600 of supplies are on hand at the end ofthe period, the adjusting entry is:

a. Supplies 600

Supplies Expense 600

b. Supplies 750

Supplies Expense 750

c. Supplies Expense 750

Supplies 750

d. Supplies Expense 600

Supplies 600

11. Adjustments for prepaid expenses:

a. decrease assets and increase revenues.

b. decrease expenses and increase assets.

c. decrease assets and increase expenses.

d. decrease revenues and increase assets

12.The trial balance shows Supplies $0 and Supplies Expense $1,500. If $800 of supplies are on hand at the end of the period, the adjusting entry is:

a. Debit Supplies $800 and credit Supplies Expense $800.

b. Debit Supplies Expense $800 and credit Supplies $800.

c. Debit Supplies $700 and credit Supplies Expense $700.

d. Debit Supplies Expense $700 and credit Supplies $700.

13.Uearned revenues are classified as

A. LiabilityB. An AssetC. An ExpenseD. a RevenueE. None

Part -II Matching

Column "A"Column "B"

1. Prepaid ExpenseA. Deferred Expense

2. Deferred RevenueB. Unearned Revenue

3. Accrued ExpenseC. Accrued liability

4. Accrued RevenueD. Accrued Asset

Part -II Work Out

2.At the end of the first month of operations, the following selected data were taken from the financial statement of the HAHA-Cleaners

Net income for OctoberBr 102,500

Total Asset at October 31Br 228,750

Total Liability at October 31Br 60,500

Total stockholder's Equity at October 31 Br 168,250

The following adjusting entries were omitted at the end of the month

A).Supplies used during October, 31 Br 800

B).Depreciation of Equipment for October, 31 Br 3000

C).Unbilled fees earned at October, 31 Br 1200

D).Accrued wages at October, 31 Br 500

Required:-

I. Journalizing the entries to record the omitted adjustments.

II. Determine the correct amounts for

Net Income,_________________________

Total Asset,________________________________

Total Liability____________________________

Stockholders equity as of October,31_________________