1. The accounting concept that requires financial statement information to be supported by independent, unbiased evidence other than someone's belief or opinion is:A. Business entity assumption.B. Monetary unit assumption.C. Going-concern assumption.D. Time-period assumption.E. Objectivity2. The rule that requires financial statements to reflect the assumption that the business will continue operating instead of being closed or sold, unless evidence shows that it will not continue, is the:A. Going-concern assumption.B. Business entity assumption.C. Objectivity principle.D. Cost Principle.E. Monetary unit assumption.3. If a parcel of land that was originally acquired for $85,000 is offered for sale at $150,000, is assessed for tax purposes at $95,000, is recognized by its purchasers as easily being worth $140,000, and is sold for $137,000, the land should be recorded in the purchaser's books at:A. $95,000.B. $137,000.C. $138,500.D. $140,000.E. $150,000.4. To include the personal assets and transactions of a business's owner in the records and reports of the business would be in conflict with the:A. Objectivity principle.B. Monetary unit assumption.C. Business entity assumption.D. Going-concern assumption.E. Revenue recognition principle.5. If a parcel of land that was originally purchased for $85,000 is offered for sale at $150,000, is assessed for tax purposes at $95,000, is recognized by its purchasers as easily being worth $140,000, and is sold for $137,000, the land account transaction amount to handle the sale of the land in the seller's books is:A. $85,000 increase.B. $85,000 decrease.C. $137,000 increase.D. $137,000 decrease.E. $140,000 decrease.6. If a parcel of land that was originally purchased for $85,000 is offered for sale at $150,000, is assessed for tax purposes at $95,000, is recognized by its purchasers as easily being worth $140,000, and is sold for $137,000. What is the effect of the sale on the accounting equation for the seller?A. Assets increase $52,000; owner's equity increases $52,000.B. Assets increase $85,000; owner's equity increases $85,000.C. Assets increase $137,000; owner's equity increases $137,000.D. Assets increase $140,000; owner's equity increases $140,000.E. Assets decrease $85,000; owner's equity decreases $85,0007. The record in which transactions are first recorded is the:A. Account balance.B. Ledger.C. Journal.D. Trial balance.E. Cash account.8. A record in which the effects of transactions are first recorded and from which transaction amounts are posted to the ledger is a(n):A. Account.B. Trial balance.C. Journal.D. T-account.E. Balance column account.9. An accountant has debited an account for $3,500 and credited a liability account for $2,000. Which of the following would be an incorrect way to complete the recording of this transaction:A. Credit another asset account for $1,500.B. Credit another liability account for $1,500.C. Credit an expense account for $1,500.D. Credit the owner's capital account for $1,500.E. Debit another asset account for $1,500.10. A $15 credit to Sales was posted as a $150 credit. By what amount is Sales in error?A. $150 understated.B. $135 overstated.C. $150 overstated.D. $15 understated.E. $135 understated.11. All of the following are liability accounts except:A. Accounts Payable.B. Unearned Ticket Revenue.C. Taxes Payable.D. Commissions Earned.E. Notes Payable.12. A $130 credit to Office Equipment was credited to Fees Earned by mistake. By what amounts are the accounts under- or overstated as a result of this error?A. Office Equipment, understated $130; Fees Earned, overstated $130.B. Office Equipment, understated $260; Fees Earned, overstated $130.C. Office Equipment, overstated $130; Fees Earned, overstated $130.D. Office Equipment, overstated $130; Fees Earned, understated $130.E. Office Equipment, overstated $260; Fees Earned, understated $130.13. Hal Smith opened Smith’s Repairs on March 1 of the current year. During March, the following transactions occurred and were recorded in the company's books:1. Smith invested $25,000 cash in the business.2. Smith contributed $100,000 of equipment to the business.3. The company paid $2,000 cash to rent office space for the month.4. The company received $16,000 cash for repair services provided during March.5. The company paid $6,200 for salaries for the month.6. The company provided $3,000 of services to customers on account.7. The company paid cash of $500 for monthly utilities.8. The company received $3,100 cash in advance of providing repair services to a customer.9. Smith withdrew $5,000 for his personal use from the company.Based on this information, the balance in Hal Smith, Capital reported on the Statement of Owner’s Equity at the end of March would be:A. $133,400.B. $130,300C. $125,300D. $8,400E. $13,500.14. The difference between the cost of an asset and the accumulated depreciation for that asset is calledA. Depreciation Expense.B. Unearned Depreciation.C. Prepaid Depreciation.D. Depreciation Value.E. Book Value.15. A company purchased a new truck at a cost of $42,000 on July 1. The truck is estimated to have a useful life of 6 years and a salvage value of $3,000. The company uses the straight-line method of depreciation. How much depreciation expense will be recorded for the truck during the first year ended December 31?A. $3,250.B. $3,500.C. $4,000.D. $6,500.E. $7,000.16. A company's Office Supplies account shows a beginning balance of $600 and an ending balance of $400. If office supplies expense for the year is $3,100, what amount of office supplies was purchased during the period?A. $2,700.B. $2,900.C. $3,300.D. $3,500.E. $3,700.17. If a company records prepayment of expenses in an asset account, the adjusting entry would:A. Result in a debit to an expense and a credit to an asset account.B. Cause an adjustment to prior expense to be overstated and assets to be understated.C. Cause an accrued liability account to exist.D. Result in a debit to a liability and a credit to an asset account.E. Decrease cash.18. On May 1, Carter Advertising Company received $3,600 from Kaitlyn Breanna for advertising services to be completed April 30 of the following year. The Cash receipt was recorded as unearned fees. The adjusting entry for the year ended December 31, Year 2 would include:A. a debit to Earned Fees for $3,600.B. a debit to Unearned Fees for $1,200.C. a credit to Unearned Fees for $1,200.D. a debit to Earned Fees for $2,400.E. a credit Earned Fees for $2,400.123. What is the proper adjusting entry at December 31, the end of the accounting period, if the balance in the prepaid insurance account is $7,750 before adjustment, and the unexpired amount per analysis of policies is, $3,250?A. Debit Insurance Expense, $3,250; credit Prepaid Insurance, $3,250.B. Debit Insurance Expense, $4,500; credit Prepaid Insurance, $4,500.C. Debit Prepaid Insurance, $4,500; credit Insurance Expense, $4,500.D. Debit Insurance Expense, $7,750; credit Prepaid Insurance, $7,750.E. Debit Cash, $7,750; Credit Prepaid Insurance, $7,750.19. A company purchased new computers at a cost of $14,000 on September 30. The computers are estimated to have a useful life of 4 years and a salvage value of $2,000. The company uses the straight-line method of depreciation. How much depreciation expense will be recorded for the computers for the first year ended December 31?A. $250B. $750C. $875D. $1,000E. $3,00020. The balance in Tee Tax Services' office supplies account on February 1 and February 28 was $1,200 and $375, respectively. If the office supplies expense for the month is $1,900, what amount of office supplies was purchased during February?A. $1,075B. $1,500C. $1,525D. $2,325E. $3,10021. Leonard Matson completed these transactions during December of the current year:Dec. 1 Began a financial services practice by investing$15,000 cash and office equipment having a $5,000 value.2 Purchased $1,200 of office equipment on credit.3 Purchased $300 of office supplies on credit.4 Completed work for a client and immediately received apayment of $900 cash.8 Completed work for Acme Loan Co. on credit, $1,700.10 Paid for the supplies purchased on credit on December 3.14 Paid for the annual $960 premium on an insurance policy.18 Received payment in full from Acme Loan Co. for the workcompleted on December 8.27 Leonard withdrew $650 cash from the practic to paypersonal expenses.30 Paid $175 cash for the December utility bills.30 Received $2,000 from a client for financial services to be rendered next year.Prepare general journal entries to record these transactions.22. In general journal form, record the December 31 adjusting entries for the following transactions and events. Assume that December 31 is the end of the annual accounting period.a. The Prepaid Insurance account shows a debit balance of $2,340, representing the cost of a three-year fire insurance policy that was purchased on October 1 of the current year.b. The Office Supplies account has a debit balance of $400; a year-end inventory count reveals $80 of supplies still on hand.c. On November 1 of the current year, Rent Earned was credited for $1,500. This amount represented the rent earned for a three-month period beginning November 1.d. Estimated depreciation on office equipment is $600.e. Accrued salaries amount to $400.(all entries dated December 31)23. Prepare adjusting entries for the year ended December 31, for each of these separate situations. Assume that prepaid expenses are initially recorded in asset accounts and that fees collected in advance are initially recorded as liabilities.a. The Prepaid Rent account has a debit balance of $12,000 before adjustment, representing a prepayment for four months rent made on December 1 of the current year.b. One-third of the work related to $18,000 of cash received in advance was performed during this period.c. Unpaid accrued salaries at December 31 amounts to $15,000d. Work was completed for a client on December 31 in the amount of $21,000, but was not previously billed or recorded.e. Estimated depreciation on office equipment is $27,000.。