7. When a magazine company receives advance payment for a subscription, it
A. Debits Cash and credits Subscriptions Revenue.
B. Debits Cash and credits Unearned Subscriptions Revenue.
C. Debits Unearned Subscriptions Revenue and credits Cash.
D. Debits Prepaid Subscriptions and credits Cash.
8. The Supplies account had a $360 debit balance at the end of the accounting period before
adjustment for supplies used, and an inventory of $80 worth of unused supplies were on hand.
Which of the following is the required adjusting entry?
A. Debit Supplies $280 and credit Supplies Expense $280.
B. Debit Supplies Expense $280 and credit Supplies $280.
C. Debit Supplies $80 and credit Supplies Expense $80.
D. Debit Supplies Expense $80 and credit Supplies $80.
9. A company’s weekly payroll of $750 is paid on Fridays. There are five days in a pay period.
Assume that the last day of the month falls on Wednesday. Which of the following is the required
adjusting entry?
A. Debit Unpaid Salaries and credit Salaries Payable for $450.
B. Debit Salaries Expense and credit Salaries Payable for $450.
C. Debit Salaries Expense and credit Salaries Payable for $300.
D. Debit Salaries Payable and credit Salaries Expense for $450.
10. A company had the following balance sheet accounts and balances:
Buildings & Equipment (net)
What is the balance of the Common Stock account?
A. $76,000
B. $68,000
C. $60,000
D. $52,000
11. An accountant is preparing adjusting journal entries. Which of the following entries could not
possibly be a correct adjusting journal entry?
A. Rent Expense 5,000
Rent Payable 5,000
B. Accounts Receivable 5,000
Service Revenue 5,000
C. Interest Expense 5,000
Interest Revenue 5,000
D. Unearned Revenue 5,000
Service Revenue 5,000
12. A company declared cash dividends of $0.20 per share. If there are 500,000 shares of common
stock authorized, 100,000 shares issued, and 80,000 shares outstanding at the date of
declaration, what is the amount that the company should record for the dividend?
A. $4,000
B. $16,000
C. $20,000
D. $100,000