Exam 3: The Adjusting Process

A) debit of $4,500 to rent expense on December 31, 2010.
B) credit of $4,500 to rent expense on December 31, 2010.
C) debit of $2,250 to rent expense on December 31, 2010.
D) credit of $2,250 to rent expense on December 31, 2010.

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A) to measure net income or loss and to update the balance sheet.
B) to compute ending retained earnings and to journalize the period's activity.
C) both A and B.
D) none of the above.

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A) $16,400
B) $9,100
C) $10,700
D) $4,300

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A) has been paid and incurred.
B) the business has paid, but not yet incurred .
C) the business has incurred, but not yet paid.
D) will be incurred and paid in the future.

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B

A) the accounting period concept.
B) the revenue concept.
C) the matching principle.
D) all of the above.

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D

A) $960
B) $320
C) $640
D) None of the above

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A) deferred revenue
B) asset
C) expense
D) unearned expense

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A) Total revenue is overstated.
B) Total revenue is understated.
C) Total expenses are overstated.
D) Total expenses are understated.

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A) revenue
B) liability
C) contra liability
D) unearned revenue

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A) Decreases an asset and increases an expense
B) Decreases a liability and increases an expense
C) Decreases a liability and increases a revenue
D) Increases an asset and increases an expense

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A)
$\begin{array} { | l | l | l | l | } \hline \text { Cash } & & 1,000 & \\\hline & \text { Service revenue } & & 1,000 \\\hline\end{array}$
B)
$\begin{array} { | l | l | l | l | } \hline \text { Salary expense } & & 1,000 & \\\hline & \text { Salary payable } & & 1,000 \\\hline\end{array}$
C)
$\begin{array} { | l | l | l | l | } \hline \text { Accounts receivable } & & 1,000 & \\\hline & \text { Service revenue } & & 1,000 \\\hline\end{array}$
D) Both A and B are correct.

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A)
$\begin{array} { | l | l | l | l | } \hline \text { Cash } & & 1,000 & \\\hline & \text { Service revenue } & & 1,000 \\\hline\end{array}$
B)
$\begin{array} { | l | l | l | l | } \hline \text { Cash } & & 1,000 & \\\hline & \text { Accounts receivable } & & 1,000 \\\hline\end{array}$
C)
$\begin{array} { | l | l | l | l | } \hline \text { Salary expense } & & 1,000 & \\\hline & \text { Cash } & & 1,000 \\\hline\end{array}$
D) Both A and C are correct.

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A) Receivable
B) Accrual
C) Deferral
D) Cash

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D

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A) A debit to a deferred revenue account
B) A debit to an unearned expense account
C) A debit to an asset account
D) A debit to a contra account

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A) Cash
B) Receivable
C) Deferral
D) Accrual

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