50) In accounting, depreciation refers to the:
A) method of spreading the cost of an asset over its useful life.
B) method of declining the market value of an asset to its book value.
C) method of estimation of an asset's current market value.
D) process of sale of a used asset.
51) The Accumulated Depreciation account is:
A) a record of the sum of all the depreciation expense recorded.
B) the price quoted to the buyer of a used asset.
C) an expense account.
D) the expense account used to expense the cost of an asset.
52) On January 1, 2015, the Accounts Receivable of Linda Company had a debit balance of $20,000. During January, the company provided services for $600,000 on account. The company collected $250,000 from its customers on account in January. What was the ending balance in the Accounts Receivable account at the end of January?
53) Qwerty Inc. prepaid $3,600 on November 1, 2014 for a one-year insurance premium. On January 1, 2015 of the next year (after December 31 adjustments), the Prepaid Insurance account will have a debit balance of:
54) Education for All sells tickets in advance for their weekly productions and records the proceeds as Unearned Revenue. At the end of each month, Education for All makes an adjusting entry to account for the tickets used during the month (ticket revenue.) On March 1, the Unearned Revenue account had a credit balance of $4,000. During March, they sold 300 tickets at $20 each and 250 tickets were used during the month. What is the balance in Unearned Revenue at the end of March?
A) Credit balance of $5,000
B) Debit balance of $4,000
C) Credit balance of $1,000
D) Debit balance of $5,000
55) Smith Technical Services is working on a six-month job for a client, starting February 1. They will collect $30,000 from their customer when the job is finished. On March 1, their Accounts Receivable account had a debit balance of $5,000. At the end of March, after monthly adjusting entries have been made, what will be the balance in Accounts Receivable?
A) Debit balance of $5,000
B) Credit balance of $25,000
C) Debit balance of $10,000
D) Debit balance of $30,000
56) Classic Artists' Services has hired a maintenance man to maintain a building they use for instruction. He will begin work on February 1 and work through till May 31. Classic Artists' will pay the maintenance man $4,000 at the end of May. It accrues Maintenance Expense at the end of every month. What is the balance in the Accounts Payable account for amounts owed to the maintenance man at the end of March?
A) Debit balance of $4,000
B) Credit balance of $2,000
C) Debit balance of $2,000
D) Credit balance of $4,000
57) On December 31, 2014, the balance in Pinnacle Exploration Company's Unearned Revenue account was a credit of $8,000. In January, 2015, the company received an advance payment of $14,000 from a new customer for services to be performed. By January 31, adjustments had been made to recognize $7,000 of the revenue which had been earned during January. What was the balance in Unearned Revenue on January 31, 2015?
A) $7,000 credit
B) $14,000 debit
C) $8,000 credit
D) $15,000 credit
58) A business acquired equipment for $150,000 on January 1, 2015. The equipment will be depreciated over five years of its useful life using the straight-line depreciation method. The business records depreciation once a year on December 31. Which of the following is the adjusting entry required to record depreciation on equipment for the year 2015? (Assume the salvage value of the acquired equipment to be zero.)
A) Debit $150,000 to Equipment and credit $150,000 to Cash.
B) Debit $150,000 to Depreciation Expense and credit $150,000 to Accumulated Depreciation.
C) Debit $30,000 to Depreciation Expense and credit $30,000 to Accumulated Depreciation.
D) Debit $30,000 to Depreciation Expense and credit $30,000 to Equipment.
59) On September 1, 2014, Joy Company paid $8,000 in advance for an 8-month rental space covering the period of September, 2014 through April, 2015. The prepaid expense was initially recorded as an asset. Joy makes adjusting entries once a year at year-end. The adjusting entry on December 31, 2014 would include a:
A) debit of $8,000 to Cash.
B) credit of $8,000 to Prepaid Rent.
C) debit of $4,000 to Rent Expense.
D) credit of $4,000 to Rent Expense.