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1. UNI Co. received $1,000 from Newbie as rent for the use of a building owned by UNI. How does this transaction affect UNI's accounts if UNI recognizes a liability?

Select one:

a. Cash is increased and revenue is increased

b. Cash is increased and revenue is decreased

c. Cash is increased and unearned revenue is increased

d. Not recorded

2. Purchased land for $50,000 with $10,000 paid in cash and $40,000 in a note payable due in three years from now. What effect does this transaction have on the accounts under the accrual basis of accounting?

Select one:

a.Net increase in assets of $40,000 and a net increase in liabilities of $40,000

b. Net increase in assets and liabilities of $50,000

c. Net increase in assets of $50,000 and a net decrease in liabilities of $40,000

d. Net increase in assets of $60,000 and a net decrease in liabilities of $40,000

3. Received $4,000 in payments from clients for services billed in a previous month. What affect does this transaction have on the accounts under the accrual basis of accounting?

Select one:

a. Total assets increase by $4,000

b. Assets will increase by $4,000 and revenues will increase $4,000

c. Total assets will be decrease by $4,000

d. The net effect on assets is zero.

4. Jiminy Cricket Co.

Jiminy Cricket Co. has a five-day workweek (Monday through Friday). Employees earn $500 per day.

Refer to Jiminy Cricket Co. If the month ends on Wednesday, with wages paid on Friday, how much wage expense should be accrued on Wednesday?

Select one:

a. $500

b. $1,500

c. $2,500

d. $1,000

5. St. Nick Corporation's Toy-Making Supplies account showed a beginning balance of $200 and supplies purchased of $800. There were $300 of supplies on hand at year-end. The year-end adjustment would include an increase in Toy-Making Supplies Expense for __________.

Select one:

a. $1,000

b. $800

c. $700

d. $300

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