Part 2: Multiple Choice Questions 1. Bailey's Bakery collected a $40 deposit from Sandy for a birthday cake to be delivered next month. In which account will Bailey's Bakery capture this transaction? a. Unearned revenue b. Accounts receivable Revenue d. This is not an accounting event and should not be recorded in the accounting records of Bailey's Bakery. 2. On October 31, 2020, Bailey's Bakery paid $24,000 for one year of rent (November 2020 through October 2021). How much rent expense will Bailey's Bakery report in their income statement for the year ended December 31, 2020? a. $4,000 b. $24,000 C. $0 d. $6,000 C. 3. Bailey's Bakery started the year with $600 of cleaning supplies on hand. They purchased $310 of supplies during the year. On December 31, 2020 a count revealed $150 of cleaning supplies remaining. How much supplies expense should appear in Bailey's Bakery's income statement for the year ended December 31, 2020? a. $150 b. $160 $760 d. $1,060 4. Refer to question #3. How will the supplies expense recognized on December 31, 2020 impact Bailey's Bakery's balance sheet? a. Assets will increase. b. Liabilities will decrease. C. This transaction will not impact the balance sheet. d. Stockholders' equity will decrease. 13