18 Questions
What is the correct adjusting entry for supplies on hand at 12/31/10?
Debit Supplies Expense for $600, credit Supplies for $600.
What is the adjusting entry for insurance policy on December 31?
Debit Insurance Expense for $1,200, credit Prepaid Insurance for $1,200.
What is the adjusting entry for office equipment depreciation?
Debit Depreciation Expense for $1,000, credit Accumulated Depreciation for $1,000.
What is the purpose of adjusting entries for supplies?
To match the cost of supplies with the revenue earned during the period.
What is the purpose of adjusting entries for insurance policy?
To allocate the cost of insurance over the period benefited.
What is the purpose of adjusting entries for depreciation?
To allocate the cost of asset over its useful life.
What is the correct adjusting entry for the amount of supplies used up in November?
Debit Supplies Expense and credit Supplies
What is the effect of the adjusting entry on retained earnings and stockholders' equity?
Retained earnings and stockholders' equity will decrease
What is the correct account to debit for the insurance used during the month?
Insurance Expense
What is the purpose of the adjusting entry for the insurance used during the month?
To recognize the expense incurred during the month
What is the balance in the Prepaid Insurance account after the adjusting entry?
$2,770
What type of account is Prepaid Insurance?
Asset account
What is the result of improper accrual of prepaid insurance?
Assets and expenses will be understated.
What is the correct adjusting entry on December 31, 2010, for the insurance policy?
Debit to Insurance Expense $4,500 and credit to Prepaid Insurance $4,500.
How much cash was paid for wages during 2010?
$52,950
What is the adjusting journal entry to be made at the end of the period for supplies?
Debit to Supplies Expense $1,000 and credit to Supplies $1,000.
What is the adjusting entry on December 31, 2010, for the unearned rent?
Debit to Unearned Rent $1,200 and credit to Rent Revenue $1,200.
What is the purpose of making adjusting entries?
To match revenues with expenses.
This quiz tests your understanding of adjusting journal entries in accounting, specifically in regards to assets and expenses. You'll be asked to identify the correct entries for supplies and prepaid insurance.
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