(Multiple Choice) 1. The Unearned Revenue account of Lorelai Incorporated began 2012 with a normal balance of $5,000 and ended 2012 with a normal balance of $15,000. During 2012, the Unearned Revenue account was credited for $22,000 that Lorelai will earn later. Based on these facts, how much revenue did Lorelai earn in 2012? a. $5,000 b. $22,000 c. $27,000 d. $12,000 2. What is the effect on the financial statements of recording depreciation on equipment? a. Net income and assets are decreased, but stockholders’ equity is not affected. b. Net income, assets, and stockholders’ equity are all decreased. c. Assets are decreased, but net income and stockholders’ equity are not affected. d. Net income is not affected, but assets and stockholders’ equity are decreased. 3. For 2012, Bryant Company had revenues in excess of expenses. Which statement describes Bryant’s closing entries at the end of 2012? a. Revenues will be debited, expenses will be credited, and retained earnings will be credited. b. Revenues will be credited, expenses will be debited, and retained earnings will be debited. c. Revenues will be credited, expenses will be debited, and retained earnings will be credited. d. Revenues will be debited, expenses will be credited, and retained earnings will be debited. 4. Which of the following accounts would not be included in the closing entries? a. Depreciation Expense b. Accumulated Depreciation c. Service Revenue d. Retained earnings 5. A m
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