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6 Cards in this Set
- Front
- Back
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Which of the following accounts would not appear in a closing entry? a) Salary Expense b) Interest Income c) Accumulated Depreciation d) Retained Earnings |
c) Accumulated Depreciation because closing entries are to close out all of the income statement accounts and accumulated depreciation is a balance sheet account |
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Which account is least likely to appear in an adjusting journal entry? a) Interest Receivable b) Cash c) Property Tax Expense d) Salaries Payable |
b) Cash because adjustments are usually not need to the cash account |
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On October 1, the $12,000 premium on a one-year insurance policy was paid and recorded as Prepaid Insurance. On December 31, what adjusting entry is needed? |
Insurance Expense 3,000 Prepaid Insurance 3,000 |
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On June 1, 2013, Oakcrest Company signed a 3 year $110,000 note payable with 9 percent interest. Interest is due on June 1 of each year beginning in 2014. What amount of interest expense should be reported on the income statement for the year ended December 31, 2013? |
$5,775 (110,000 * 9%)/12 months*7 months |
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Failure to make an adjusting entry to recognize accrued salaries payable would cause which of the following? a) an understatement of expenses, liabilities and SE b) an understatement of expenses and liabilities and an overstatement of SE c) an overstatement of assets and SE d) an overstatement of assets and liabilities |
b) because the entry to record accrued salaries payable is: Salaries Expense Salaries Payable |
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What ratio is required to be reported on the financial statements or in the notes to the statements? |
EPS (Earnings per Share ratio) |
