ACCOUNTING WILEY PLUS EXAM 2 –
COPY QUESTIONS AND ANSWERS
WITH VERIFIED SOLUTIONS 100%
CORRECT ||NEWLY UPDATED 2025
Using accrual accounting, expenses are recorded and reported only: -
ANSWER✔✔when they are incurred whether or not cash is paid.
Each of the following is a major type (or category) of adjusting entry except: -
ANSWER✔✔earned expenses.
Prepaid expenses are: - ANSWER✔✔paid and recorded in an asset account before
they are used or consumed.
Adjusting entries affect at least: - ANSWER✔✔one income statement account and
one balance sheet account.
Greese Company purchased office supplies costing $4,000 and debited Supplies
for the full amount. At the end of the accounting period, a physical count of office
supplies revealed $1,500 still on hand. The appropriate adjusting journal entry to
be made at the end of the period would be: - ANSWER✔✔debit Office Supplies
Expense, $2,500; credit Office Supplies, $2,500
The balance in the prepaid rent account before adjustment at the end of the year is
$15,000 and represents three months rent paid on December 1. The adjusting entry
required on December 31 is: - ANSWER✔✔debit Rent Expense, $5,000; credit
Prepaid Rent, $5,000.
, Adjustments for unearned revenue: - ANSWER✔✔decrease liabilities and increase
revenues.
Payments of expenses that will benefit more than one accounting period are
identified as - ANSWER✔✔prepaid expenses.
Green Realty Company received a check for $30,000 on July 1 which represents a
6 month advance payment of rent on a building it rents to a client. Unearned Rent
Revenue was credited for the full $30,000. Financial statements will be prepared
on July 31. Green Realty should make the following adjusting entry on July 31: -
ANSWER✔✔debit Unearned Rent Revenue, $5,000; credit Rent Revenue, $5,000.
Oakville Inc. purchased a 12-month insurance policy on March 1, 2014 for $1,800.
At March 31, 2014, the adjusting journal entry to record expiration of this asset
will include: - ANSWER✔✔a debit to Insurance Expense and a credit to Prepaid
Insurance for $150.
An adjusting entry made to record accrued interest on a note receivable due next
year consists of a: - ANSWER✔✔debit to Interest Receivable and a credit to
Interest Revenue.
Mary Richardo, CPA, has billed her clients for services performed. She
subsequently receives payments from her clients. What entry will she make upon
receipt of the payments? - ANSWER✔✔Debit Cash and credit Accounts
Receivable
Snelling Tables paid employee wages on and through Friday, January 26, and the
next payroll will be paid in February. There are three more working days in
January (29-31). Employees work 5 days a week and the company pays $900 a day
COPY QUESTIONS AND ANSWERS
WITH VERIFIED SOLUTIONS 100%
CORRECT ||NEWLY UPDATED 2025
Using accrual accounting, expenses are recorded and reported only: -
ANSWER✔✔when they are incurred whether or not cash is paid.
Each of the following is a major type (or category) of adjusting entry except: -
ANSWER✔✔earned expenses.
Prepaid expenses are: - ANSWER✔✔paid and recorded in an asset account before
they are used or consumed.
Adjusting entries affect at least: - ANSWER✔✔one income statement account and
one balance sheet account.
Greese Company purchased office supplies costing $4,000 and debited Supplies
for the full amount. At the end of the accounting period, a physical count of office
supplies revealed $1,500 still on hand. The appropriate adjusting journal entry to
be made at the end of the period would be: - ANSWER✔✔debit Office Supplies
Expense, $2,500; credit Office Supplies, $2,500
The balance in the prepaid rent account before adjustment at the end of the year is
$15,000 and represents three months rent paid on December 1. The adjusting entry
required on December 31 is: - ANSWER✔✔debit Rent Expense, $5,000; credit
Prepaid Rent, $5,000.
, Adjustments for unearned revenue: - ANSWER✔✔decrease liabilities and increase
revenues.
Payments of expenses that will benefit more than one accounting period are
identified as - ANSWER✔✔prepaid expenses.
Green Realty Company received a check for $30,000 on July 1 which represents a
6 month advance payment of rent on a building it rents to a client. Unearned Rent
Revenue was credited for the full $30,000. Financial statements will be prepared
on July 31. Green Realty should make the following adjusting entry on July 31: -
ANSWER✔✔debit Unearned Rent Revenue, $5,000; credit Rent Revenue, $5,000.
Oakville Inc. purchased a 12-month insurance policy on March 1, 2014 for $1,800.
At March 31, 2014, the adjusting journal entry to record expiration of this asset
will include: - ANSWER✔✔a debit to Insurance Expense and a credit to Prepaid
Insurance for $150.
An adjusting entry made to record accrued interest on a note receivable due next
year consists of a: - ANSWER✔✔debit to Interest Receivable and a credit to
Interest Revenue.
Mary Richardo, CPA, has billed her clients for services performed. She
subsequently receives payments from her clients. What entry will she make upon
receipt of the payments? - ANSWER✔✔Debit Cash and credit Accounts
Receivable
Snelling Tables paid employee wages on and through Friday, January 26, and the
next payroll will be paid in February. There are three more working days in
January (29-31). Employees work 5 days a week and the company pays $900 a day
