Match the account with the account type. Question 1 For which of the following accounts is the normal balance a debit balance?

Match the account with the account type.

Answer                                                                  Answer 

___Unearned revenue                                       A.Asset

___Sales                                                        B.Liability

___Interest income                                          C.Equity

___Interest payable                                         D.Revenue

___Accounts receivable                                   E.Expense

___Dividends                                                  F.Dividend

___Retained earnings                                     G.Contra asset

___Depreciation expense 

___Prepaid insurance 

___Supplies 

___Supply expense 

___Income tax payable 

___Prepaid rent 

___Accumulated depreciation    

Question 1 

For which of the following accounts is the normal balance a debit balance?

Retained earnings. 

Accounts payable. 

Prepaid insurance.

 Unearned revenue.

Question 2 

Retained earnings for the ABC Company as of January 1, 200X was $1,800.  During the year the company earned revenue of $2,000, had expenses of $1,200 and paid a cash dividend of $500.The income statement for the year ending December 31, 200X would show net income of:

$300 

$2,100 

$800    

$3,100

Question 3 

Assume the balance in Prepaid Insurance is $ 2,500 but it should be $ 1,500. The adjusting journal entry should include which of the following?

Debit to Prepaid insurance for $ 1,000. 

Debit to Insurance expense for $ 1,000    

Credit to Insurance expense for $ 1,000. 

Credit to Insurance expense for $ 1,500.

Question 4 

Assume a company receives a bill for $ 10,000 for advertising done during the current year. If this bill is not yet recorded at the end of the year, what will the adjusting journal entry include?

Debit to Advertising expense of $ 10,000. 

Debit to Accrued liabilities of $ 10,000. 

Credit to Advertising expense of $ 10,000. 

Credit to Cash of $ 10,000.

Question 5 

On January 1, 200X the Post Company started the year with a balance of $800 in the supplies account. During the year the company purchased supplies for $600. On December 31, 200X there was $200 of supplies on hand. What adjusting entry would be made on December 31, 200X? 

Debit Supplies $600; Credit Cash $600 

Debit Supply Expense $600; Credit Cash $600 

Debit Supply Expense $1,200; Credit Supplies $1,200   

Debit Supply Expense $200; Credit Supplies $200 

Debit Supply expense $1,200; Credit cash $1,200

Question 6 

Payment of a dividend will:

Decrease net income. 

Increase net income.  

Decrease retained earnings. 

Increase retained earnings.

Question 7 

Central Company has sales of $10,000 and expenses of $4,000. Which of the following is the correct closing entry?

Debit retained earnings, debit expenses and credit sales. 

Credit retained earnings, credit expenses and debit sales. 

Debit expenses and credit sales. 

Credit retained earnings, debit expenses and credit sales.

Question 8 

In regard to the Prepaid Insurance Account:

A debit entry will increase this account; a credit entry will decrease this account. 

A credit entry will increase this account; a debit entry will decrease this account. 

A debit entry can either increase or decrease this account. 

A credit entry can either increase or decrease this account.

Question 9 

In regard to the account Salary Payable:

A debit entry will increase this account; a credit entry will decrease this account. 

A credit entry will increase this account; a debit entry will decrease this account. 

A debit entry can either increase or decrease this account.  

A credit entry can either increase or decrease this account.