Self Assessment Quizzes

CHAPTER 18: Section 2 Adjusting Supplies, Prepaid Insurance, and Federal Corporate Income Tax

	1.	If the balance in Supplies is $5,200 and $1,400 in supplies were used, the adjustment is

		a.	debit Supplies $3,800
		b.	credit Supplies $1,400
		c.	debit Supplies $5,200
		d.	credit Supplies $5,200

	2.	On December 1 a six-month insurance policy was purchased for $1,200. The adjustment to Prepaid Insurance is

		a.	debit $200
		b.	credit $200
		c.	debit $600
		d.	credit $600

	3.	A corporation made four quarterly federal corporate income tax payments of $822 each. Its actual tax at the end of the year was determined to be $3,577. The adjustment is

		a.	debit Federal Corporate Income Tax Payable $289
		b.	debit Federal Corporate Income Tax Expense $289
		c.	credit Federal Corporate Income Tax Payable $4,399
		d.	debit Federal Corporate Income Tax Expense $822

	4.	On May 1 a one-year insurance policy was purchased for $1,500. The adjustment at the year end of December 31 would be

		a.	debit Prepaid Insurance $1,500
		b.	credit Prepaid Insurance $1,000
		c.	credit Prepaid Insurance $1,500
		d.	debit Prepaid Insurance $750

	5.	If the balance in Supplies is $8,824 and there are $1,508 of supplies on hand, the adjustment is

		a.	debit Supplies $10,332
		b.	credit Supplies $10,332
		c.	debit Supplies $7,316
		d.	credit Supplies $7,316

	6.	Federal Corporate Income Tax Expense is $4,928 at the end of the fiscal year. There were four quarterly payments of $1,232 each. It has been determined that the actual liability is $5,012. The adjustment to Federal Corporate Income Tax Expense will be

		a.	debit Federal Corporate Income Tax Expense $1,232
		b.	credit Federal Corporate Income Tax Expense $1,232
		c.	credit Federal Corporate Income Tax Expense $84
		d.	debit Federal Corporate Income Tax Expense $84

	7.	The Supplies account is

		a.	an asset account
		b.	a liability account
		c.	an expense account
		d.	a temporary account