31 Dec The closing process involves:

1
The accounting equation can be stated as:

Multiple Choice

A + L ? OE = 0.
A ? L + OE = 0.
?A + L ? OE = 0.
A ? L ? OE = 0.

2
Mary Parker Co. invested $15,000 in ABC Corporation and received common stock in exchange. Mary Parker Co.’s journal entry to record this transaction would include a:

Multiple Choice

Debit to investments.
Credit to retained earnings.
Credit to common stock.
Debit to expense.

3
On December 31, 2017, Coolwear, Inc. had a balance in its prepaid insurance account of $48,400. During 2018, $86,000 was paid for insurance. At the end of 2018, after adjusting entries were recorded, the balance in the prepaid insurance account was 42,000. Insurance expense for 2018 would be:

Multiple Choice

$6,400.
$134,400.
$86,000.
$92,400.
4
Carolina Mills purchased $260,000 in supplies this year. The supplies account increased by $23,000 during the year to an ending balance of $70,000. What was supplies expense for Carolina Mills during the year?

Multiple Choice

$191,000.
$329,000.
$283,000.
$237,000.

5
10/10points awarded

ItemScored
Item5
Item 5 10 of 10 points awarded Item Scored
Yummy Foods purchased a two-year fire and extended coverage insurance policy on August 1, 2018, and charged the $3,600 premium to Insurance expense. At its December 31, 2018, year-end, Yummy Foods would record which of the following adjusting entries?

Multiple Choice

•Insurance expense 750

Prepaid insurance 2,850

Insurance payable 3,600

•Prepaid insurance 750

Insurance expense 750

•Prepaid insurance 2,850

Insurance expense 2,850

•Insurance expense 750

Prepaid insurance 750Bottom of Form

6
The employees of Neat Clothes work Monday through Friday. Every other Friday the company issues payroll checks totaling $33,000. The current pay period ends on Friday, July 3. Neat Clothes is now preparing quarterly financial statements for the three months ended June 30. What is the adjusting entry to record accrued salaries at the end of June?

Multiple Choice

•

Prepaid salaries 9,900

Salaries payable 9,900

•

Salaries expense 6,600

Salaries payable 6,600

•

Salaries expense 23,100

Prepaid salaries 9,900

Salaries payable 33,000

•

Salaries expense 23,100

Salaries payable 23,100Bottom of Form

7
Mama’s Pizza Shoppe borrowed $6,600 at 6% interest on May 1, 2018, with principal and interest due on October 31, 2019. The company’s fiscal year ends June 30, 2018. What adjusting entry is necessary on June 30, 2018?

Multiple Choice

•Prepaid interest 66

Interest payable 66

•Interest expense 66

Interest payable 66

•

• Interest expense 132

Interest payable 132Bottom of Form

8
On September 15, 2018, Oliver’s Mortuary received a $6,000, nine-month note bearing interest at an annual rate of 12% from the estate of Jay Hendrix for services rendered. Oliver’s has a December 31 year-end. What adjusting entry will the company record on December 31, 2018?

Multiple Choice

•

Interest receivable 210

Notes receivable 210

•

Interest receivable 720

Interest revenue 210

Cash 510

•

Interest receivable 210

Interest revenue 210

•

Interest receivable 510

Interest revenue 510

9
The correct amount of prepaid insurance shown on a company’s December 31, 2018, balance sheet was $900. On July 1, 2019, the company paid an additional insurance premium of $600. In the December 31, 2019, balance sheet, the amount of prepaid insurance was correctly shown as $500. The amount of insurance expense that should appear in the company’s 2019 income statement is:

Multiple Choice

$1,500
$1,400
$1,000
$600

10
The closing process involves:

Multiple Choice

Recording year-end adjusting entries.
Transferring revenue and expense balances to retained earnings.
Closing out the permanent account balances.
All of these answer choices are incorrect.