1 ) Comapny purchases a three-year insurance policy for $3000.00. At the end of

Question

1 ) Comapny purchases a three-year insurance policy for $3000.00. At the end of the first year, Blue Talon adjusts insurance expense by crediting

A. An asset account,

B. a retained earnings account,

C. a liability account,

D. Both B and C

E. none of the above

2)

Whitestone Company collected $10,000 on a credit sale. The left-hand side of the entry would be a debit to

E. None of the above

3)

Yellowstone Incorporated paid salaries of $5000. The debit entry is to

E. None of the above

4)

Silverstone Incorporated purchases a two-year insurance policy for $8000 cash. Silverstone debits

E. None of the above

5)

Credit entries to the cash account increase the account, similar to your bank statement. TRUE or FALSE

6)

Whitestone Company collected $10,000 on a credit sale. The left-hand side of the entry would be a debit to

A. Accounts Receivable B. Accounts payable C. Cash D. Owners’ equity

E. None of the above

Explanation / Answer

Answer:

1. B and C

a Retained earnings account and a liability account

2.A

Accounts Receivable

3.E

None of the above

4.A

An Asset account

5.TRUE

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