Question 5 Which of the following will result in the largestexpense recorded for the year?

Select one:

A. $4,000 is paid in January for an asset with a useful life offive years.

B. $1,800 is paid in January for a two-year fire insurancepolicy.

C. $1,000 cash dividends are declared and paid.

D. $850 is paid to an attorney for legal services renderedduring the current year.

Question 6 An asset purchased on January 1, 2015 for $60,000that has an estimated life of 10 years will have a book value onDecember 31, 2020 of:

Select one:

A. $60,000.

B. $24,000.

C. $36,000.

D. $42,000.

Question 7 The United Shipping Co. borrowed $25,000 at 12%interest on March 1, 2018. The note is to be repaid, with interest,in six months. If United Shipping makes monthly adjusting entries,which of the following is included as part of the March 31adjusting entry?

Select one:

A. Credit Interest Payable $250.

B. Credit Interest Expense $250.

C. Debit Prepaid Interest $250.

D. Debit Interest Receivable $250.

Question 8 As of January 31, Princess Company owes $500 toButler Co. for equipment rented during January. If no adjustment ismade for this item at January 31, how will Princess's financialstatements be affected?

Select one:

A. Cash will be overstated at January 31.

B. Net income for January will be understated.

C. Owners' equity will be overstated.

D. The financial statements will be accurate since the $500 doesnot have to be paid yet.

Question 9 An engineering firm provided services on 12/31/2018.Payment is due in 30 days. An adjusting entry is required: Selectone:

A. To record uncollected revenue.

B. To record unearned revenue.

C. To record accrued liability.

D. To record prepaid revenue.

Question 10 Which of the following accounting principles areapplied to help achieve the goals of accrual accounting? Selectone: A. Business entity concept and realization principle.

B. Realization principle and matching principle.

C. Matching principle and safety principle.

D. Cost principle and the accounting equation.