ACG 4101 - Chapter 2 Practice Quiz and
answer correctly solved
The journal entry to record the borrowing of cash and the signing of a note
payable involves:
Multiple Choice
a debit to note payable and a credit to cash.
debits to cash and interest expense and a credit to note payable.
a debit to cash and a credit to note payable.
All of these answer choices are incorrect. - correct answer ✔a debit to cash
and a credit to note payable.
We can state the accounting equation for a corporation as:
Multiple Choice
−A + L − SE = 0.
A + L= SE.
A = L − SE.
A − L − SE = 0. - correct answer ✔A - L - SE = 0
Which of the following is most likely an accrued liability?
Multiple Choice
Depreciation
Interest on borrowing
, Cost of goods sold
Office supplies - correct answer ✔Interest on borrowing
A prepaid expense:
Multiple Choice
occurs when an expense is recorded in the current period but not paid until a
future period.
occurs when a company receives cash from customers prior to providing
goods and services to those customers.
occurs when an asset is acquired in the current period but not expensed until
a future period.
All of these answer choices are incorrect. - correct answer ✔occurs when an
asset is acquired in the current period but not expensed until a future period.
The Esquire Clothing Company borrowed a sum of cash on October 1, 2024,
and signed a note payable. The annual interest rate was 12%. The company's
December 31, 2024, income statement reported interest expense of $1,260
related to this note. What was the amount borrowed?
Multiple Choice
$22,000
$10,500
$31,500
$42,000 - correct answer ✔$42,000
Which of the following adjusting entries causes a decrease in assets?
answer correctly solved
The journal entry to record the borrowing of cash and the signing of a note
payable involves:
Multiple Choice
a debit to note payable and a credit to cash.
debits to cash and interest expense and a credit to note payable.
a debit to cash and a credit to note payable.
All of these answer choices are incorrect. - correct answer ✔a debit to cash
and a credit to note payable.
We can state the accounting equation for a corporation as:
Multiple Choice
−A + L − SE = 0.
A + L= SE.
A = L − SE.
A − L − SE = 0. - correct answer ✔A - L - SE = 0
Which of the following is most likely an accrued liability?
Multiple Choice
Depreciation
Interest on borrowing
, Cost of goods sold
Office supplies - correct answer ✔Interest on borrowing
A prepaid expense:
Multiple Choice
occurs when an expense is recorded in the current period but not paid until a
future period.
occurs when a company receives cash from customers prior to providing
goods and services to those customers.
occurs when an asset is acquired in the current period but not expensed until
a future period.
All of these answer choices are incorrect. - correct answer ✔occurs when an
asset is acquired in the current period but not expensed until a future period.
The Esquire Clothing Company borrowed a sum of cash on October 1, 2024,
and signed a note payable. The annual interest rate was 12%. The company's
December 31, 2024, income statement reported interest expense of $1,260
related to this note. What was the amount borrowed?
Multiple Choice
$22,000
$10,500
$31,500
$42,000 - correct answer ✔$42,000
Which of the following adjusting entries causes a decrease in assets?
