Reference no: EM131798545

1) Panda Corporation paid cash of $120,000 on June 1, 2017 for one year's rent in advance and recorded the transaction with a debit to Prepaid Rent. The December 31, 2017 adjusting entry is

a. debit Prepaid Rent and credit Rent Expense, $50,000.

b. debit Prepaid Rent and credit Rent Expense, $70,000.

c. debit Rent Expense and credit Prepaid Rent, $70,000.

d. debit Prepaid Rent and credit Cash, $50,000.

2) In November and December 2017, Lane Co., a newly organized magazine publisher, received $75,000 for 1,000 three-year subscriptions at $25 per year, starting with the January 2018 issue. Lane included the entire $75,000 in its 2017 income tax return. What amount should Lane report in its 2017 income statement for subscriptions revenue?

a. $0.

b. $4,166.

c. $25,000.

d. $75,000.

3)True/False: An adjustment for wages expense, earned but unpaid at year end

4)True/False: An example of an internal event would be a flood that destroyed a portion of a company's inventory

5)True/False: Nominal (temporary) accounts are revenue, expense, and dividend accounts and are periodically closed.