Question 1 Retained earnings for the ABC Company as of January 1, 200X was $800. During the year the company earned

Question 1 

Retained earnings for the ABC Company as of January 1, 200X was $800. During the year the company earned revenue of $5,000, had expenses of $3,200 and paid a cash dividend of $500.The income statement for the year ending December 31, 200X would show net income of:

$2,300 

$2,100 

$800 

$1,800  

Question 2 

The balance in Prepaid insurance is $ 2,500 before any adjustment. $1,000 worth of the insurance has expired. 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.

 Debit to Insurance expense for $ 1,500.

Question 3 

On January 1, 200X the Post Company started the year with a balance of $1,000 in the supplies account. During the year the company purchased supplies for $2,000. On December 31, 200X there was $1,200 of supplies on hand. What adjusting entry would be made on December 31, 200X?

Debit Supplies $1,800; Credit Cash $1,800 

Debit Supply Expense $2,000; Credit cash $2,000 

Debit Supply Expense $1,800; Credit Supplies $1,800 

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

Question 4 

Payment of a dividend will:

Decrease net income. 

Increase net income. 

Decrease retained earnings. 

Increase retained earnings. 

Question 5 

Central Company purchased equipment on January 1, 200X for $12,000. The equipment has a useful life of six years. What adjusting entry would be made for 200X to record depreciation expense? 

Debit depreciation expense $2,000; credit cash $2,000. 

Debit depreciation expense $12,000; credit cash $12,000. 

Debit depreciation expense $2,000; credit equipment $2,000. 

Debit depreciation expense $2,000; credit accumulated depreciation $2,000