41.Which of the following transactions would NOT be considered an adjusting entry?
a.annual depreciation expense
b.cash paid for current month rent
c.wages earned by employees in 2007 but not paid until 2008
d.interest expense in 2007 to be paid in 2008
42.Which of the following statements about closing entries is NOT true?
a.all expense accounts will be closed
b.all revenue accounts will be closed
c.assets will be increased for an amount equal to the period's net income
d.after closing entries are recorded, all temporary accounts will have a zero balance
43.If an end-of-period adjusting entry is made to accrue wages, it means that
a.the company pays its employees monthly
b.employees have earned wages since the end of the last payroll period, but have not been paid
c.the account Wages Payable will be decreased
d.the company has already distributed payroll checks
44.An adjusting entry generally requires entries into
a.two balance sheet accounts
b.the cash account and an income statement account
c.an income statement account and a balance sheet account
d.two income statement accounts
45.If an adjustment to record the accrual of interest payable is omitted from the accounting system by the accountant, which of the following effects will result?
a.total expenses will be overstated on the income statement
b.net income will be overstated
c.liabilities on the balance sheet will be overstated
d.cash will be overstated
46.Which of the following entries would likely be considered an adjusting entry?
a.an increase to both depreciation expense and accumulated depreciation
b.an increase to cash and a decrease to accounts receivable
c.a decrease to cash and a decrease to accounts payable
d.an increase to merchandise inventory and an increase to accounts payable
47.Which of the following events would require an adjusting entry?
Wages earned but not paid to Depreciation of
employees totaled $3,000 this period $2,500 was incurred this period
48.Which of the following situations would require an adjusting entry?
Recording $480 of interest expense Recording $9,000 for machinery
incurred during 2007 but not paid until 2008 acquired on the last day of the year for cash
49.Famous Frames Company purchased office equipment on January 1, 2007 for $10,000. Its annual depreciation was computed as $1,000. To record the depreciation for 2007, the accounting system entry should be which of the following?
a.increase both Depreciation Expense and Accumulated Depreciation by $1,000
b.increase Depreciation Expense and decrease Equipment, both by $1,000
c.increase Depreciation Expense and decrease Accumulated Depreciation, both by $1,000
d.decrease both Depreciation Expense and Accumulated Depreciation by $1,000
50.Consider the following events that occurred during the accounting period just ended.
1.A five-year insurance policy that had been purchased two years ago was partially used up.
2.Wages to be paid next year were recorded during the current year.
3.Goods which a customer had paid for last year were manufactured this year and delivered to her satisfaction.
Which of the transactions above represents an example of an adjusting entry?
b.transactions 1 and 2
c.transactions 1 and 3
d.transactions 1, 2 and 3