Multiple Choice Answers

Question 1 of 20
Allowance for Doubtful Accounts is:
A. subtracted from Accounts Receivable in the Assets section of the balance sheet.
B. deducted from Sales in the Revenue section of the income statement.
C. listed in the Operating Expenses section of the income statement.
D. listed in the Liabilities section of the balance sheet.
Question 2 of 20
The adjusting entry for uncollectible accounts requires a debit to __________ and a credit to __________.
A. Allowance for Doubtful Accounts; Accounts Receivable
B. Uncollectible Accounts Expense; Allowance for Doubtful Accounts
C. Uncollectible Accounts Expense; Accounts Receivable
D. Allowance for Doubtful Accounts; Uncollectible Accounts Expense
Question 3 of 20
The adjusting entry to record accrued interest on a note payable requires a debit to __________ and a credit to __________.
A. Interest Income; Notes Payable
B. Interest Payable; Interest Expense
C. Interest Expense; Cash
D. Interest Expense; Interest Payable
Question 4 of 20
On July 1, 2010, a firm purchased a 1-year insurance policy for $1,800 and paid the full premium in advance. The insurance expense associated with this policy for 2010 is:
A. $600.
B. $1,050.
C. $900.
D. $1,800.
Question 5 of 20
On January 2, 2011, a firm purchased equipment for $8,500. Depreciation expense for 2011, given the straight-line method, a 5-year useful life, and a salvage value of $1,500, is:
A. $1,500.
B. $1,700.
C. $1,200.
D. $1,400.
Question 6 of 20
Accrued expenses are:
A. paid for and recorded in one period but not fully used until a later period.
B. used in one period but not paid for until a later period.
C. paid for, recorded, and used in one period.
D. budgeted but not paid for or used during the period.
Question 7 of 20
On November 1, 2010, a firm accepted a 4-month, 10 percent note for $900 from a customer with an overdue balance. The accrued interest recorded for this note for the year ended December 31, 2010, is:
A. $90.
B. $75.
C. $30.
D. $15.
Question 8 of 20
With the accrual basis of accounting, it is appropriate to recognize revenue from a credit sale:
A. on the date of the sale.
B. on the date the account is collected in full.
C. each time a payment on an account balance is received.
D. either on the date of the sale or when the amount of the sale is collected.
Question 9 of 20
The net income for an accounting period appears on the worksheet in the:
A. Income Statement Debit column only.
B. Income Statement Credit column only.
C. Income Statement Credit and the Balance Sheet Debit columns.
D. Income Statement Debit and the Balance Sheet Credit columns.
Question 10 of 20
The ending merchandise inventory is recorded on the worksheet in the:
A. Income Statement Credit and the Balance Sheet Debit columns.
B. Income Statement Credit column only.
C. Balance Sheet Debit column only.
D. Income Statement Debit column only