Multiple choice

1. The matching principle is the basis for recording:

 a. revenues

 b. expenses

 c. assets

 d. liabilities 

2. Accrued revenue has:

 a. not been earned nor has cash been received

 b. been earned but cash has not been received

 c. not been earned but cash has been received

 d. been earned and cash has been received 

3. The supplies account shows a beginning balance of $3,000. Assume the supplies account shows a debit for $5,500 representing supplies purchased during the period and the supplies inventory at year-end is $1,700. The adjusting entry involves a:

 a. debit so supplies expense for $6,800

 b. debit so supplies for $6,800

 c. debit to supplies expense for $1,700

 d. debit to supplies for $1,700   

4. Prepaid insurance shows a beginning balance of $500 and an ending balance of $600. During the year, prepaid insurance was debited for $2,200. What is the amount of insurance expense shown on the current year's income statement?

 a. $2,100

 b. $1,700

 c. $1,600

 d. $2,700