A newspaper ad submitted and published this week, with the agreement to pay for it next week would, in the newspaper's records:
Increase assets and increase revenues.
Increase assets and decrease liabilities.
Increase assets and increase expenses.
Have no effect on total assets.
The accountant at Abco, Inc. made an adjusting entry at the end of February to accrue interest on a note receivable from a customer. The effect of this entry is to:
Decrease ROI for February.
Increase ROI for February.
Decrease working capital at February 28.
Decrease the acid-test ratio at February 28.
In the buyer's records, the purchase of merchandise on account would:
Increase assets and increase liabilities.
Increase liabilities and increase paid-in capital.
The effect of an adjustment is:
To correct an entry that was not in balance.
To increase the accuracy of the financial statements.
To record transactions not previously recorded.
To close the books.
Wisdom Co. has a note payable to its bank. An adjustment is likely to be required on Wisdom's books at the end of every month that the loan is outstanding to record the:
Amount of interest paid during the month.
Amount of total interest to be paid when the note is paid off.
Amount of principal payable at the maturity date of the note.
Accrued interest expense for the month.
When a firm purchases supplies for its business:
The supplies account should always be debited.
The supplies expense account should always be debited.
Either the supplies account or the supplies expense account should be credited.
An adjustment will probably be required as supplies are used.
The Interest Receivable account for February showed transactions totaling $8,500 and an adjustment of $11,200.All of the following responses are correct except:
The transactions probably resulted from accruing interest income earned.
The transactions were probably entered on the credit side of the account.
The adjustment was probably for cash receipts of interest receivable accrued in prior months.
The balance in the interest receivable account decreased $2,700.
In the seller's records, the sale of merchandise on account would:
Increase assets and increase paid-in capital.
Increase assets and decrease revenues.
The balance in the Accrued Wages Payable account increased from $12,200 at the beginning of the month to $15,000 at the end of the month. Wages accrued during the month totaled $61,000.
Wages paid during the month totaled $58,200.
Wages paid during the month totaled $64,800.
Wages expense for the month totaled $58,200.
Wages expense for the month totaled $76,000.
The effect of an adjustment on the financial statements is usually to:
make the balance sheet balance.
increase net income.
increase the accuracy of both the balance sheet and income statement.
match revenues and assets.
When a firm purchases supplies for use in its business, and the cost of the supplies purchased is recorded as an asset, the following adjustment to recognize the cost of supplies used will probably be required:
A. Dr. Supplies
Cr Accounts Payable
B. Dr Supplies
Cr Supplies Expense
C. Dr Supplies Expense
D. No adjustment will probably be required
To accrue $5,500 of employee salaries for the last week of February, the employer's journal entry is:
Dr Salaries Expense 5500
Cr Cash 5500