| 23. At the end of the fiscal year, the usual adjusting entry to Prepaid Insurance to record expired insurance was omitted. Which of the following statements is true? | a. Insurance Expense will be overstated. | | | | b. Total assets at the end of the year will be understated. | | | | c. Owner's equity at the end of the year will be understated. | | | | d. Net income for the year will be overstated. | 24. The balance in the prepaid rent account before adjustment at the end of the year is $32,000, which represents four months' rent paid on December 1. The adjusting entry required on December 31 is | a. debit Prepaid Rent, $8,000; credit Rent Expense, $8,000. | | | | b. debit Prepaid Rent, $24,000; credit Rent Expense, $8,000. | | | | c. debit Rent Expense, $24,000; credit Prepaid Rent, $8,000. | | | | d. debit Rent Expense, $8,000; credit Prepaid Rent, $8,000. | 25. Depreciation Expense and Accumulated Depreciation are classified, respectively, as | a. asset, contra liability. | | | | b. expense, contra asset. | | | | | | d. contra asset, expense. | 26. The income statement should be prepared | a. after the balance sheet and before the statement of owner's equity. | | | | b. before the statement of owner's equity and balance sheet. | | | | c. after the statement of owner's equity and balance sheet. | | | | d. after the statement of owner's equity and before the balance sheet. | 27. The Statement of Owner's Equity begins with the beginning balance followed by | a. plus Net Income (loss) less withdrawals. | | | | b. plus investments plus Net Income (loss) less withdrawals. | | | | c. plus Net Income (loss) plus investments. | | | | d. plus investments less withdrawals. 28. After posting the second closing entry to the income summary account, the balance will be equal to | a. revenues for the period. | | | | | | | | d. the net income or (loss) for the period. | 29. There are four closing entries. The first one is to close ____, the second one is to close ____, the third one is to close ____, and the last one is to close ____. | a. Capital account, drawing account, income summary, assets | | | | b. Drawing account, income summary, expenses, revenues | | | | c. Revenues, expenses, income summary, drawing account | | | | d. Expenses, assets, income summary, capital account | 30, The post-closing trial balance differs from the adjusted trial balance in that it | a. does not include income statement accounts. | | | | b. does not include balance sheet accounts. | | | | c. does not take into account closing entries. | | | | d. does not take into account adjusting entries. | | | | | | | | | | |
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