FAR — Financial Accounting & Reporting — Quiz 16

Questions in this quiz (10)

1. Which account is reduced when depreciation expense is recorded?

   • Equipment
   • Accumulated depreciation
   • Cash
   • Revenue

2. Which of the following accounts normally has a debit balance?

   • Unearned revenue
   • Accounts payable
   • Prepaid insurance
   • Accumulated depreciation

3. Which type of adjusting entry recognizes expenses after cash is paid?

   • Accrued expense
   • Deferred expense
   • Unearned revenue
   • Accrued revenue

4. A company receives $5,000 for services to be performed next month. Which account is credited initially?

   • Revenue
   • Accounts receivable
   • Unearned revenue
   • Expense

5. Which step follows preparation of financial statements?

   • Closing accounts
   • Recording adjusting entries
   • Posting transactions
   • Preparing journal entries

6. Which adjusting entry records the use of prepaid advertising?

   • Debit Advertising Expense; Credit Prepaid Advertising
   • Debit Prepaid Advertising; Credit Advertising Expense
   • Debit Advertising Expense; Credit Cash
   • Debit Cash; Credit Advertising Expense

7. Which financial statement is affected when revenues increase?

   • Balance sheet
   • Income statement
   • Statement of cash flows
   • Statement of equity

8. Which account is credited when recording accrued rent expense?

   • Rent expense
   • Rent payable
   • Cash
   • Accounts receivable

9. Which account classification describes accumulated amortization?

   • Liability
   • Contra asset
   • Expense
   • Revenue

10. Which transaction requires an adjusting entry?

    • Cash received from customers
    • Cash paid for equipment
    • Interest incurred but not yet paid
    • Cash payment for utilities