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Popular Accounting Practice Problems

How would you close out Supplies Expense on 12/31/16 after the financial statements have been prepared?

a. Debit to Supplies Expense and a Credit to Retained Earnings

b. Debit to Retained Earnings and a Credit to Supplies Expense

c. Debit to Supplies Expense and a Credit to Net Income

d. Debit to Net Income and a Credit to Net Income

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What are the normal balances for Dividends and Retained Earnings?

a. Both are Debit

b. Both are Credit

c. Dividends is a Debit while Retained earnings is a Credit

d. Dividends is a Credit  while Retained earnings is a Debit

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If Robert paid for 6 months of rent in advance on 7/1/16 for $4,800 ($800 per month). What is the next step for Robert after he finishes recording and posting adjusting entries on 12/31/16?

a. Prepares the financial statements

b. Closes the entries

c. Prepares an unadjusted trial balance

d. Prepares an adjusted trial balance

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If Robert paid for 6 months of rent in advance on 7/1/16 for $4,800 ($800 per month). What would happen to the accounting equation if Robert forgot to make an adjusting entry on 12/31/16?

a. Assets would be understated

b. Assets would be overstated

c. Liabilities would be understated

d. Liabilities would be overstated

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If Robert paid for 6 months of rent in advance on 7/1/16 for $4,800 ($800 per month).  What is the journal entry required on 12/31/16?

a. Debit Rent Expense and Credit Prepaid Rent

b. Debit Prepaid Rent and Credit Accounts Payable

c. Debit Prepaid Rent and Credit Cash

d. Debit Rent Expense and Credit Prepaid Liability

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