< BUSA-202 Test 3 (2015)>

Question 1                                                                                                                          1.5 out of 1.5 points

 On May 1, Lord of the Fries, Inc., issued a $10,000, 3-month, 12% note. It also issued another $10,000 6-month, 12% note on the same day. On May 31, the adjusting entry to record the interest owed will be ______.                                   

Question 2                                                                                                                                          1.5 out of 1.5 points

 On May 1, its first month of business, Squid Roe, Inc., recorded the receipt of $900 in advance for services to be performed over the three months as Unearned Revenue. Record the May 31 adjusting entry to recognize the first month of revenue earned.

Question 3                                                                                                                          1.5 out of 1.5 points

 Lox, Stock & Bagel, Inc. bought machinery at a cost of $583,000 on January 1. If its salvage value is $0 (i.e., it plans to not sell the machinery when it is done using it) and its useful life is 10 years, Depreciation Expense for the year ended December 31, Year 1 equals ______.

Question 4                                                                                                                          1.5 out of 1.5 points

 Lox, Stock & Bagel, Inc. bought machinery at a cost of $416,000 on January 1, Year 1. It plans to dispose of the machinery after 10 years of use. Depreciation Expense for the year ended December 31, Year 2 equals ______.

Question 5                                                                                                                                          1.5 out of 1.5 points

 A pizza company receives a check from a customer as partial payment of his account balance. This transaction does not involve the sale of new pizzas. How should the entry be recorded?                        

Question 6                                                                                                                                          1.5 out of 1.5 points

 On December 31, Year 1, Accounts Payable had a balance of $10,000. During Year 2, there were $500,000 purchases on account and $490,000 payments of Accounts Payable. The December 31, Year 2, balance must equal $______. Do not include a $ in your answer.                                         

Question 7                                                                                                                          1.5 out of 1.5 points

 When a company makes a payment for amounts owed from prior purchases of inventory, it will record a debit to ______ and a credit to ______.                                                

Question 8                                                                                                                                          1.5 out of 1.5 points       

 The credit side of the Retained Earnings T-Account will include which of the following after recording the closing entries?                                                

 Revenues for the month.

Retained Earnings balance at the end of the month.

Question 9                                                                                                                                          1.5 out of 1.5 points

 Record the entry for the sale and the cost of the sale of merchandise to a customer on account for $800, which cost $500, by selecting which accounts are debited and which are credited.                              

Question 10                                                                                                                                       1.5 out of 1.5 points

 Curl Up & Dye, Inc. began May with $200 of supplies. It purchased $850 of supplies on account during May. It paid $450 of the amount it owed for its supplies in May. At May 31, it only had $110 of supplies left. Supplies Expense for the month ended May 31 equals ______.

Question 11                                                                                                                                       1.5 out of 1.5 points

 How many of the following accounts have a normal debit balance?

Accounts Receivable

Unearned Revenue

Wages Expense

Wages Payable

Depreciation Expense

Sales Revenue

Question 12                                                                                                                                       1.5 out of 1.5 points

 If a company credited Revenues, the debit may have been to ______. (Select all that apply.)                                   

Question 13                                                                                                                                       1.5 out of 1.5 points

 If a company debited an expense, the credit may have been to ______.

Question 14                                                                                                                                       1.5 out of 1.5 points

 Record the purchase of $800 of merchandise on account by selecting which accounts would be debited and credited. (Select all that apply.)                                   

Question 15                                                                                                                                       1.5 out of 1.5 points

 The entry to close expense accounts ______.                                  

Question 16                                                                                                                       1.5 out of 1.5 points

 On November 1, Year 1, Pitts’ Pits, Inc., paid $35,000 for a 5-month insurance policy beginning on that date. Prepaid Insurance at December 31, Year 1 equals ______.

Question 17                                                                                                                       1.5 out of 1.5 points

 On November 1, Nim Com Soup, Inc., borrowed $40,000 by issuing a 3-month note at 9%. Interest Payable at December 31, equals ______.

Question 18                                                                                                                                       1.5 out of 1.5 points

Record the adjusting entry on December 31 for wages owed to employees that will be paid in January, the next accounting period. (Select all that apply.)                                    

Question 19                                                                                                                                       1.5 out of 1.5 points

 Given the Accounts Receivable T-account, match the correct description with each number. For the beginning (1. or 2.) and ending balances (5. or 6.), select “Blank” for the side that is opposite the account’s normal balance.

Question 20                                                                                                                                       1.5 out of 1.5 points

Select all accounts that are closed at the end of an accounting period.                                   

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