Which the adjusting entry on december of the current year

Assignment Help Managerial Accounting

Reference no: EM132710780

Problem 1: On July 1 of the current calendar year, Plum Co. paid $7,500 cash for management services to be performed over a two-year period beginning July 1. Plum follows a policy of recording all prepaid expenses to asset accounts at the time of cash payment. The adjusting entry on December 31 of the current year for Plum would include:

Multiple Choice

A. A debit to an expense and a credit to a prepaid expense for $5,625.

B. A debit to a prepaid expense and a credit to Cash for $5,625.

C. A debit to an expense and a credit to a prepaid expense for $1,875.

D. A debit to a prepaid expense and a credit to an expense for $1,875.

E. A credit to a liability and a debit to a prepaid expense for $1,875.

Problem 2: The total amount of depreciation recorded for an asset for all periods for which an asset has been used:

Multiple Choice

A. Is referred to as depreciation expense.

B. Is referred to as accumulated depreciation.

C. Is shown on the income statement of the final period.

D. Is only recorded when the asset is disposed of.

E. Is referred to as an accrued asset.

Problem 3: Prior to recording adjusting entries, the Office Supplies account had a $359 debit balance. A physical count of the supplies showed $105 of unused supplies available. The required adjusting entry is:

Multiple Choice

A. Debit Office Supplies $105 and credit Office Supplies Expense $105.

B. Debit Office Supplies Expense $105 and credit Office Supplies $105.

C. Debit Office Supplies Expense $254 and credit Office Supplies $254.

D. Debit Office Supplies $254 and credit Office Supplies Expense $254.

E. Debit Office Supplies $105 and credit Supplies Expense $254.

Problem 4: If throughout an accounting period the fees for legal services paid in advance by clients are recorded in an account called Unearned Legal Fees, the end-of-period adjusting entry to record the portion of those fees that has been earned is:

Multiple Choice

A. Debit Cash and credit Legal Fees Earned.

B. Debit Cash and credit Unearned Legal Fees.

C. Debit Unearned Legal Fees and credit Legal Fees Earned.

D. Debit Legal Fees Earned and credit Unearned Legal Fees.

E. Debit Unearned Legal Fees and credit Accounts Receivable.

Reference no: EM132710780

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