Use the following information to answer questions 2224. On July 1, 20X0, CriCo takes out a 10%, $10,000 note payable that is due on July 1, 20X1. No interest is accrued at year-end 20X0. 24. To correct this error in 20X0, you need to record just the adjusting entry that was not made because . . . a. an expense account is involved b. no error was made recording the note payable on July 1, 20X0 c. an accrual is involved rather than a deferral d. the books have not been closed

26. On October 1, 20X1, MarCo signs a one-year, 8% note payable for $10,000 with principle and interest due on October 1, 20X2. It is MarCos only note outstanding. On October 1, 20X2 when the note is paid, MarCo debits Notes Payable and credits Cash for $10,800, the sum of principle and interest. This error is likely to be found because . . . a. the bank reconciliation will be out of balance when the check clears b. the trial balance will be out of balance by $800 c. the trial balance will show a balance in Notes Payable that is not normal d. interest expense will be understated

39. Which of the following is an example of an accrual error? a. failure to adjust Prepaid Insurance to its proper balance at year end b. failure to adjust Inventory to its proper balance at year end c. failure to record depreciation at year end d. none of the above

44. Which of the following is an accurate description of how failure to record an accrual is likely to be found? a. An expense that was not accrued is paid, but there is no payable on the books as there should be. b. A revenue that was not accrued is received, but there is no receivable on the books as there should be. c. A review of the trial balance reveals that an asset or liability account that is normally present after accruals are recorded is not present. d. All above statements are accurate descriptions of how failure to record an accrual is likely to be found.

49. If trial balance total debits are $72,000 and total credits are $74,700, then the error cannot be . . . a. a slide b. a doubling error c. a transposition for which you can find the error by investigating each account where the difference between the first two digits of its balance is 3 d. Actually, you can find the error using a, b or c.