Question

Q1)At December 31, 2019, before any year-end adjustments, Karr Company's Insurance Expense account had a balance of $1,450 and its Prepaid Insurance account had a balance of $3,800. It was determined that $2,000 of the Prepaid Insurance had expired. The adjusted balance for Insurance Expense for the year would be: *

1)$3,000

2)$1,450

3)$4,450

4)None of the above

Q2) A Company purchased a computer system for $3,600 on January 1, 2018. The company expects to use the computer system for 3 years. It has no salvage value. Yearly depreciation expense on the asset is: *

1)$0

2)$100

3)$1,200

4)$3,600

Q3)Maple Tree Inc. purchased a 12-month insurance policy on March 1, 2019 for $900. At December 31, 2019, the adjusting journal entry to record expiration of this asset will include a: *

1)Debit to Insurance Expense and a credit to Prepaid Insurance for $750

2)Debit to Prepaid Insurance and a credit to Insurance Expense for $100

3)Debit to Insurance Expense and a credit to Prepaid Insurance for $75

4)None of the above

Q4)A Company has performed $500 of CPA services for a client but has not collected the client as of the end of the accounting period. What adjusting entry must the company make? *

1)Debit Cash and credit Unearned Revenue $500

2)Debit Accounts Receivable and credit Service Revenue $50

3)Debit Unearned Revenue and credit Service Revenue $50

4)None of the above

Answer 1