Question

1. Which of the following in not classified as a current liability?

		Payroll taxes payable
		10-year bonds payable, maturing in 6 months
		Salaries and wages payable
		Note payable, due in 4 ye

2. Revenues and gains are increased by:

		credits
		debits
		neither debits nor credits
		both debits and credits, depending on the situation

3. Entity F paid its landlord rent of $7,000 per month for 8 months in advance on December 1, 2028. If Entity F’s accounting period ends on December 31, 2028, it will report

		Prepaid Rent of $49,000 on its 2028 balance sheet.
		Rent Revenue of $7,000 on its 2028 income statement.
		Prepaid Rent of $7,000 on its 2028 balance sheet.
		Rent Expense of $49,000 on its 2028 income statement.

4. Which of the following accounts would be closed to income summary?

		sales revenue.
		dividends.
		accounts payable.
		land.

5. Which inventory costing method assumes that the most recent costs for inventory are matched against current sales?

		FIFO
		LIFO
		Specific identification
		Average cost

6. Unearned revenue would be found on

		the multi-step income statement in the net sales section.
		the classified balance sheet as a current asset.
		the classified balance sheet as a current liability.
		the statement of retained earnings.

Answer 1

1. Which of the following in not classified as a current liability?

Current liabilities is that liabilities which is paid within 12 Months

So answer is d) Note payable, due in 4 year

2) Revenues and gains are increased by:

Revenues and gain has credit normal balance so increase by Credit

So answer is a) Credit

3) Entity F paid its landlord rent of $7,000 per month for 8 months in advance on December 1, 2028. If Entity F’s accounting period ends on December 31, 2028, it will report

Balance sheet (prepaid rent) = 7000*7 = 49000

Income statement (rent expense) = 7000

So answer is a) Prepaid Rent of $49,000 on its 2028 balance sheet.

4)  Which of the following accounts would be closed to income summary?

All temporary accounts (Revenue, expense and drawing) would be closed under income statement

So answer is a) Sales revenue

5)  Which inventory costing method assumes that the most recent costs for inventory are matched against current sales?

So answer is b) LIFO

6)  Unearned revenue would be found on

Unearned revenue is that revenue which is received but not earned

So answer is c) the classified balance sheet as a current liability.