Please help with the following multiple choice bookkeeping questions: any help is more than appreciated, thank you!!! :)
Question 1: If total credits exceed total debits in the income statement columns of a work sheet then:
a) a mistake has been made.
b) net income has occurred
c) net loss has occurred
d) no conclusion can be drawn until the closing entry have been made.
e) none of these.
Question 2: In which columns of a work sheet would the adjusted balance of accumulated depreciation appear?
a) adjusted trial balance credit, balance sheet debit.
b) Income statement credit, balance sheet debit.
c) adjusted trial balance credit, income statement credit.
d) adjusted trial balance debit, balance sheet debit.
e) none of these.
Question 3: A business pays weekly wages of $20,000 on Friday for a 5-day week ending on that day. If the fiscal period ends on Wednesday, the adjusting entry is:
a) debit wages expense, $12,000; credit drawing, $12,000.
b) debit wages expense, $12,000; credit wages payable, $12,000.
c) debit drawing, $12,000; credit wages payable, $12,000.
d) debit wages payable, $12,000; credit wages expense, $12,000.
e) none of these.
Question 4: The adjusting entry to record depreciation of equipment is:
a) debit accumulated depreciation, credit depreciation expense.
b) debit depreciation expense, credit equipment
c) debit equipment, credit accumulated depreciation.
d) debit depreciation expense, credit depreciation payable.
e) none of these.
Question 5: Depreciation is:
a) an expense that is incurred during an accounting period.
b) an estimate of the loss of usefulness of equipment during an accounting period.
c) used to show a more proper balance int he equipment account by subtracting accumulated depreciation from the equipment account.
d) all of these.
e) none of these.
Question 6: Which of the following accounts in the ledger will ordinarily appear in the post-closing trial balance?
a) drawing.
b) accounts receivable.
c) income from services.
d) supplies expense.
e) none of these.
Thanks so much for all your help in advance, really do appreciate it. TY TY TY!! :)
1. Net income has occurred. Income are credits on the P & L. Expenses are debits. If the credit (income) exceed debits (expenses) you've made a profit.
2. The answer is e) none of these. The entry would be
Debit Depreciation expense (P & L)
___Credit accumulated depreciation (balance sheet)
3. The wages are $4,000 per day. The period ends Wednesday, so you have reverse the wages for Thursday and Friday. The entry is
Debit Wages payable $8,000
___Credit Wages expense
To back out wages for 2 days at $4,000 per day. Thursday and Friday are in the next period.
4. e) None of these. The entry is:
Debit Depreciation expense
___Credit accumulated depreciation
5. d) All of these. You are prorating the cost of the equipment over the periods in which the equipment is used. Think of putting a little money aside each month towards the expense of a Christmas gift. The money you put aside each month is shown as an expense, and the accumulated amount is a credit.
6. A post closing trial balance contains only the balance sheet items. Accounts receivable, a balance sheet item, is the only one that remains. The expenses are netted against revenue and go to retained earnings or capital. The drawing is netting into retained earnings. Only the Accounts receivable remains.
I would like to see you at lest try and pick one and justify your answer. I'll give you a pointer or two - debits and credits are always equal, this is the number one rule in accounting.
you pro-rate wages.
depreciation is a non-cash expense that does exactly what its name implies. It reduce the value of a asset over its useful life.
These questions are not that hard, you are doing yourself and injustice not trying to learn this material. Review your book please.