ACCT 220 Chapter 3 Fun Quiz Essay

619 Words Nov 1st, 2014 3 Pages
UNIVERSITY OF MARYLAND UNIVERSITY COLLEGE

PRINCIPLES OF ACCOUNTING I
ACCT220

FUN QUIZ THREE: CHAPTER THREE

I. Multiple Choice. Select the best lettered answer for the number question or best lettered completion for the numbered partial statement. Record the letter next to the number.

1. ___C__ A company spends $15 million dollars for an office building. Over what period should the cost be written off?

a. When the $15 million is expended in cash.
b. All in the first year.
c. Over the useful life of the building.
d. After $15 million in revenue is recognized.

2. __B___ Crue Company had the following transactions during 2014:

Sales of $4,800 on account
Collected $2,000 for services to be performed in 2015
Paid $1,625 cash
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a. Debit Insurance Expense, $6,000; Credit Prepaid Insurance, $6,000.
b. Debit Insurance Expense, $18,500; Credit Prepaid Insurance, $18,500.
c. Debit Prepaid Insurance, $12,500; Credit Insurance Expense, $12,500.
d. Debit Insurance Expense, $12,500; Credit Prepaid Insurance, $12,500.

6. __B___ Double Nickels Company purchased equipment for $9,000 on January 1, 2014. The company expects to use the equipment for 3 years. It has no salvage value. Monthly depreciation expense on the asset is

a. $0.
b. $250.
c. $3,000.
d. $9,000. 7. __C___On January 1, 2014, Superfuzz Company purchased equipment for $40,000. The company is depreciating the equipment at the rate of $800 per month. The book value of the equipment at December 31, 2014 is

a. $0.
b. $9,600.
c. $30,400.
d. $40,000.

8. _A____ Uncle Tupelo's Gifts signs a three-month note payable to help finance increases in inventory for the Christmas shopping season. The note is signed on November 1 in the amount of $75,000 with annual interest of 12%. What is the adjusting entry to be made on December 31 for the interest expense accrued to that date, if no entries have been made previously for the interest?

a. Interest Expense 1,500 Interest Payable 1,500
b. Interest Expense 2,250 Interest Payable 2,250
c. Interest Expense 1,500 Cash 1,500
d. Interest Expense 1,500 Notes Payable 1,500

ACCT220 Fun Quiz Three: Chapter

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