Accounting Quiz Chapter 3 PDF

Principles of Accounting -- Supplemental Instruction CHAPTER 3 QUIZ 1. During the year, Cheng Company paid salaries of \$24,000. In addition, \$8,000 in salaries has accrued by the end of the year but has not been paid. The year-end adjusting entry would include which one of the follo...

Principles of Accounting -- Supplemental Instruction CHAPTER 3 QUIZ 1. During the year, Cheng Company paid salaries of \$24,000. In addition, \$8,000 in salaries has accrued by the end of the year but has not been paid. The year-end adjusting entry would include which one of the following? a\. Debit to Salaries Expense for \$32,000. b\. Credit to Salaries Expense of \$8,000. c\. Debit to Salaries Payable for \$24,000. d\. Credit to Salaries Payable for \$8,000. 2. At the beginning of December, Global Corporation had \$2,000 in supplies on hand. During the month, supplies purchased amounted to \$5,000, but by the end of the month the supplies balance was only \$1,000. What is the appropriate month-end adjusting entry? a\. Debit Cash \$4,000, credit Supplies \$4,000. b\. Debit Supplies \$6,000, credit Supplies Expense \$6,000. c\. Debit Supplies Expense \$6,000, credit Supplies \$6,000. d\. Debit Cash \$2,000, credit Supplies \$2,000. 3. Adam\'s Apples opened for business on January 1, 2019, and paid for two insurance policies effective that date. The liability policy was \$36,000 for eighteen-months, and the crop damage policy was \$12,000 for a two-year term. What was the balance in Adam\'s Prepaid Insurance account as of December 31, 2019? a\. \$ 9,000. b\. \$18,000. c\. \$30,000. d\. \$48,000. 4. Border Inc. took out a 1-year, 8%, \$100,000 loan on March 31, 2019. Interest is due upon maturity of the loan. The loan and interest must be paid back on March 31, 2020. As of December 31, 2019, what amount, if any, should Border Inc. report for interest payable? a\. \$6,000. b\. \$2,000. c\. \$0. d\. \$8,000. 5. The following financial information is from Daily Construction Company: ---------------------------------- ---------- Accounts Payable \$15,000 Buildings 80,000 Cash 10,500 Accounts Receivable 9,500 Sales Tax Payable 4,500 Retained Earnings 47,500 Supplies 40,000 Notes Payable (due in 18 months) 35,000 Interest Payable 3,000 Common Stock 35,000 ---------------------------------- ---------- What is the amount of current assets, assuming the accounts above reflect normal activity? a\. \$20,000. b\. \$60,000. c\. \$140,000. d\. \$175,000. 6. The following financial information is from Camaro Company. All debt is due within one year unless stated otherwise. ---------------------------------- ---------- Retained Earnings \$52,000 Supplies 37,000 Equipment 72,000 Accounts Receivable 8,600 Unearned Revenue 6,000 Accounts Payable 15,000 Common Stock 25,000 Notes Payable (due in 18 months) 35,000 Interest Payable 7,000 Cash 22,400 ---------------------------------- ---------- What is the amount of current liabilities? a\. \$63,000. b\. \$28,000. c\. \$45,600. d\. \$22,000. 7. The following table contains financial information for Trumpeter Inc. before closing entries: ------------------------ ---------- Cash \$12,000 Supplies 4,500 Prepaid Rent 2,000 Salary Expense 4,500 Equipment 65,000 Service Revenue 30,000 Miscellaneous Expenses 20,000 Dividends 3,000 Accounts Payable 5,000 Common Stock 68,000 Retained Earnings 8,000 ------------------------ ---------- What is Trumpeter's net income? a\. \$3,500. b\. \$2,500. c\. \$5,000. d\. \$5,500. 8. On September 1, 2019, Gold Magazine sold 400 one-year subscriptions for \$90 each. The total amount received was credited to Unearned Revenue. What would be the required adjusting entry at December 31, 2019? a\. Unearned Revenue 36,000 Service Revenue 36,000 b\. Service Revenue 24,000 Unearned Revenue 24,000 c\. Unearned Revenue 24,000 Service Revenue 24,000 d\. Unearned Revenue 12,000 Service Revenue 12,000 9. Earnings balance of Juan\'s Mexican Restaurant chain increased by \$3.2 million from the beginning of the year. The company declared a dividend of \$1.3 million during the year. What was the net income earned during the year? a\. \$1.9 million. b\. \$3.2 million. c\. \$4.5 million. d\. \$1.3 million.