1. Which of the following is not an equity account?

A) Owner's Capital
B) Owner's Withdrawals
C) Revenue
D) Unearned Revenue
E) Expenses
2. An account titled Prepaid Rent would be classified as which of the following?
A) Asset account
B) Liability account
C) Revenue account
D) Expense account
E) None of the above
3. Which of the following statements is true?
A) Journalizing precedes posting
B) Revenue accounts are increased by debit entries
C) An account shows increase and decreases, but does not show the balance
D) Debit entries are entries involving the right-hand side on an account
E) Journalizing errors should be erased and a correct entry made
4. Beginning capital was $10,000. Withdrawals were $24,000. The owner made additional
investments during year of $60,000. The ending capital balance was $90,000. What was the net
income or net loss for the period?
A) Net income, $56,000
B) Net loss, $44,000
C) Net income, $44,000
D) Net income, $30,000
E) None of the above
5. Total revenues were $105,000, total expenses, except for wage expense were $50,000, and net
income was $35,000. What was the amount of wage expense?
A) $15,000
B) $20,000
C) $55,000
D) $70,000
E) Cannot be determined from information provided
6. At the beginning of the year, a business had a two-year, $2,400 insurance policy on its office
equipment. On July 1, it purchased a three-year, $3,600 policy on a newly constructed building.
Which of the following will be the December 31, year-end, adjusting entry?
A) Insurance Expense, debit, $6,000; Prepaid Insurance, credit, $6,000
B) Insurance Expense, debit, $2,400; Prepaid Insurance, credit, $2,400
C) Insurance Expense, debit, $2,100; Prepaid Insurance, credit, $2,100
D) Insurance Expense, debit, $1,800; Prepaid Insurance, credit, $1,800
E) None of the journal entries in this group
7. At the end of the fiscal year, an adjusting entry was made for accrued salaries of $1,500. The
salaries for one week, $3,750, were paid on the first Friday of the new fiscal period. Which of
the following is the entry to record paying the salaries expense for the week?
A) Salaries Expense, debit, $3,750; Cash, credit, $3,750
B) Salary Exp., debit, $1,500; Salaries Payable, debit, $2,250; Cash, credit, $3,750
C) Salaries Expense, debit, $3,750; Salaries Payable, credit, $3,750
D) Salary Exp., debit, $2,250; Salaries Payable, debit, $1,500; Cash, credit, $3,750
E) None of the journal entries shown above
8. The notion that the life of a business is divisible into time periods of equal length is known as
which of the following?
A) Continuing-concern principle
B) Monetary unit principle
C) Recognition principle
D) Time-period principle
E) Business entity principle
9. Cash $15,000 Accounts Payable $15,000 Accounts Receivable 35,000
Notes Payable 25,000 Supplies 4,000 Mortgage Payable 85,000
Prepaid Insurance 3,000 Capital, Mary Ling 195,000 Other Prepaids 1,000
Withdrawals, Mary Ling 22,000 Equipment 65,000 Revenues 190,000
Buildings 140,000 Salaries Expense 73,000 Land 40,000
Rent Expense 65,000 Patents 10,000 Utilities Expense 37,000
Assuming all of the accounts have normal balances, what is the total of the trial balance?
A) $532,000
B) $508,000
C) $488,000
D) $510,000
E) Does not balance
10. The records for Uptown Pet Shop showed the following:Sales $225,000 Beginning merchandise
inventory $ 30,000 Purchases 135,000 Cost of goods sold 150,000 What was the ending
merchandise inventory?
A) $120,000
B) $ 75,000
C) $ 45,000
D) $ 15,000
E) None of the above

Problem #1 FOR 5 POINTS

Professor Quark opens his own company, Electronic Tutorial Services, and completes the following
transactions in June:
6/1 Quark invests $12,000 into the business.
6/3 Purchased $1,800 of equipment on account.
6/4 Paid $360 premium for a two-year insurance policy.
6/6 Purchased office supplies for cash, $300.
6/9 Purchased a new computer for $7,500. Paid $1,500 cash agreed to pay the remainder in 30 days.
6/10 Billed student Fiona Smith $40 for tutorial services that were performed.
6/14 Paid for the equipment purchased on June 3rd.
6/25 Received $35 cash from student Bert Bantrum for tutorial services performed.
6/30 Student billed on June 10 pays the amount due to Quark.
6/30 Quark withdraws $500 for personal use.

Required: Prepare the journal entries to record these transactions.