Chapter 3—The Adjusting Process

MULTIPLE CHOICE
41.The type of account and normal balance of Unearned Rent is
a revenue, credit
.
b expense, debit
.
c liability, credit
.
d liability, debit
.
ANS: C PTS: 1 DIF: Easy OBJ: 03-02
NAT: AACSB Analytic | AICPA FN-Measurement

42. Data for an adjusting entry described as "accrued wages, $2,020" means to debit
a Wages Expense and credit Wages Payable
.
b Wages Payable and credit Wages Expense
.
c Accounts Receivable and credit Wages Expense
.
d Drawing and credit Wages Payable
.
ANS: A PTS: 1 DIF: Moderate OBJ: 03-02
NAT: AACSB Analytic | AICPA FN-Measurement | ACBSP-APC-07-Adjusting Entries

43. Supplies are recorded as assets when purchased. Therefore, the credit to supplies in the adjusting entry is
for the amount of supplies
a still on hand
.
b purchased
.
c used
.
d either used or still on hand
.
ANS: C PTS: 1 DIF: Easy OBJ: 03-02
NAT: AACSB Analytic | AICPA FN-Measurement | ACBSP-APC-07-Adjusting Entries

44. If there is a balance in the prepaid rent account after adjusting entries are made, it represents a(n)
a deferral
.
b accrual
.
c revenue
.
d liability
 .
ANS: A PTS: 1 DIF: Moderate OBJ: 03-02
NAT: AACSB Analytic | AICPA FN-Measurement | ACBSP-APC-04-Cash vs. Accrual

45. If there is a balance in the unearned subscriptions account after adjusting entries are made, it represents
a(n)
a deferral
.
b accrual
.
c drawing
.
d revenue
.
ANS: A PTS: 1 DIF: Easy OBJ: 03-02
NAT: AACSB Analytic | AICPA FN-Measurement | ACBSP-APC-04-Cash vs. Accrual