1.  Hardy Parties Company purchased a computer for $2,400 on December 1. It is estimated that
annual depreciation on the computer will be $480. If financial statements are to be prepared on
December 31, the company should make the following adjusting entry:
a.  Debit Depreciation Expense, $480; Credit Accumulated Depreciation, $480.
b.  Debit Depreciation Expense, $40; Credit Accumulated Depreciation, $40.
c.  Debit Depreciation Expense, $1,920; Credit Accumulated Depreciation, $1,920.
d.  Debit Office Equipment, $2,400; Credit Accumulated Depreciation, $2,400
 

2.  At March 1, 2006, Striped Candy Delights Inc. had supplies on hand of $500.  During the
month, Candy purchased supplies of $1,200 and used supplies of $1,500.  The March 31
adjusting journal entry should include:
a.  a debit to the supplies account for $1,500
b.  a credit to the supplies account for $500
c.  a debit to the supplies account for $1,200
d.  a credit to the supplies account for $1,500

3.   Adjusting entries are
a.  not necessary if the accounting system is operating properly.
b.  usually required before financial statements are prepared.
c.  made whenever management desires to change an account balance.
d.  made to balance sheet accounts only.

4.  Monthly and quarterly time periods are called
a. calender periods.
b. fiscal periods.
c. interim periods.
d. quarterly periods.

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