question

If the credit to record the payment of an account payable is not posted, A) cash will be overstated B) Cash will be understated C) Expenses will be understated D) Liabilities will be understated

answer

A) cash will be overstated

question

The journal entry to record the purchase of supplies on account A) credits supply and debits accounts payable B) credits supplies and debits cash C) debits supplies and credits accounts payable D) debits supplies expense and credits supplies

answer

C) debits supplies and credits accounts payable

question

Assets are usually reported at their A) current market value B) historical cost C) appraised value D) none of the above

answer

B) historical cost

question

How do you find the book value of something?

answer

equipment- accumulated depreciation- accumulated depreciation= book value

question

A doctor purchases medical supplies of $640 and pays $290 cash with the remainder on account. The journal entry for this transaction would be which of the following? A) Supplies Accounts payable Cash B) Supplies Accounts payable Cash C) Supplies Accounts Receivable Cash D) Supplies Cash Accounts payable

answer

B) Supplies, accounts payable, cash (accounts payable and cash are indented together)

question

An adjusting entry that debits an expense and credits a liability is which type? A) Cash expense B) Accrued expense C) Depreciation expense D) Prepaid expense

answer

B) accrued expense

question

Which account type normally have a credit balance? A) Expenses B) Liabilities C) Revenues D) both B and C

answer

D) both b and c

question

Accounts payable had a normal beginning balance of $1,400. During the period there were debit postings of $300 and credit postings of $800. What was the ending balance? A) $900 credit B) $900 debit C) $1,900 credit D) $1,900 debit

answer

C) $1,900 credit (Ending balance: beginning balance + credit- debit) 1400+ 800-300= 1900

question

Albany Corporation holds cash of $5,000 and owes $28,000 on accounts payable. Albany has accounts receivable of $49,000, inventory of $36,000?, and land that cost $60,000. How much are Albany?'s total assets and? liabilities? A) 150,000 assets, 64,000 liabilities B) 150,000 assets, 28,000 liabilities C) 90,000 assets, 88,000 liabilities D) 114,000 assets, 64,000 liabilities

answer

B) 150,000 assets, 28,000 liabilities

question

The valuation of assets on the balance sheet is generally based on A) selling price B) what it would cost to replace C) current fair market value as established by independent appraisers D) historical cost

answer

D) historical cost

question

How wold net income be most likely to affect the accounting equation? A) decrease assets and decrease liabilities B) increase liabilities and decrease stockholders' equity C) Increase assets and increase liabilities D) Increase assets and increase stockholders' equity

answer

D) Increase assets and increase stockholders' equity

question

Which of the following is the most accurate statement regarding ethic as applied to decision making in accounting? A) It is impossible to learn ethical decision making, since it is just something you decide to do or not to do B) Ethics involves making difficult choices under pressure and should be kept in mind in making every decision, including those involving accounting C) Ethics has no place in accounting, since accounting deals purely with numbers D) Ethics is becoming less and less important as a field of study in business

answer

B) Ethics involves making difficult choices under pressure and should be kept in mind in making every decision, including those involving accounting

question

Which of the following accounts is not closed? A) Interest Revenue B) Dividends C) Accumulated Depreciation D) Depreciation Expense

answer

C) Accumulated Depreciation

question

Young Company had total assets of $215,000 and total? stockholders' equity of $78,000 at the beginning of the year. During the? year, assets increased by $38,000 and liabilities increased by $7,000. ?Stockholders' equity at the end of the year is A) 116,000 B) 123,000 C) 126,000 D) 109,000

answer

D) 109,000

question

Purchasing computer equipment for cash will A) increase both total assets and total liabilities B) have no effect on total assets, total liabilities, or equity C) decrease both total assets and equity D) decrease both total liabilities and equity

answer

B) have no effect on total assets, total liabilities, or equity

question

Salary Payable at the beginning of the month totals $28,000. During the month salaries of $124,000 were accrued as expense. If ending Salary Payable is $13,000?, what amount of cash did the company pay for salaries during the? month? A) 83,000 B) 138,000 C) 165,000 D) 139,000

answer

D) 139,000 (Beginning month totals+ accrued expense- ending salary payable)= cash payable) 28,000+124,000-13000= 139,000

question

Which of the following transactions will increase an asset and increase stockholders' equity? A) Collecting cash from a customer on accounts receivable B) Borrowing money from a bank C) Purchasing supplies on account D) Performing a service on account for a customer

answer

D) Performing a service on account for a customer

question

CullenCullen?'s Catering began with cash of $15,000. Cullen then bought supplies for $2,500 on account.? Separately, Cullen paid $7,200 for equipment. Answer these questions. a. How much in total assets does CullenCullen ?have? b. How much in liabilities does CullenCullen ?owe?

answer

17500 in assets (7,800+2500+7200= 17500) 2500 in liabilities

question

Purchasing a building for $120,000 by paying cash of $25,000 and signing a note payable for $95,000 will A) decrease total assets and increase total liabilities by $25000 B) increase both total assets and total liabilities by 95000 C) increase both total assets and total liabilities by 120000 D) decrease both total assets and total liabilities by 25000

answer

B) increase both total assets and total liabilities by 95000

question

In a double-entry system, A) liabilities, owners' equity, and revenue accounts all have normal debit balances B) half of all the accounts have a normal credit balance C) a debit entry is recorded on the left side of a t-account D) both a and b are correct

answer

C) a debit entry is recorded on the left side of a t-account

question

Quartz Instruments had retained earnings of 350,000 at Dec. 31, 2013. Net income for 2014 totaled 200,000 and dividends for 2014 were 60,000. How much retained earning should Quartz report at Dec. 31? A) 550 B) 410 C) 490 D) 350

answer

C) 490

question

In which month should revenue be recorded? A) in the month that cash is collected from the customer B) In the month that goods are shipped to the customer C) In the month that the invoice is mailed to the customer D) In the month that the goods are ordered by the customer

answer

B) In the month that goods are shipped to the customer

question

The nature of an asset is best described as A) an economic resource representing cash or the right to receive cash in the future B) something with physical form that valued at cost in the accounting records C) something owned by a business that has a ready market value D) an economic resource that's expected to benefit future operations

answer

D) an economic resource that's expected to benefit future operations

question

Performing a service on account will A) increase stockholder's equity B) increase total assets C) increase total liabilities D) both a and b

answer

D) both a and b

question

The financial statement that reports revenues and expenses is called A) balance sheet B) statement of cash flows C) income statement D) statement of retained earnings

answer

C) income statement

question

Which of the following is not an asset account? A) common stock B) service revenue C) salary expense D) None of the above accounts is an asset

answer

C) salary expense

question

What is the effect on total assets and stockholders' equity of paying the telephone bill as soon as it is received each month? A) decreases assets, decreases equity B) decreases assets, no effect on equity C) No effect on assets, decreases equity D) No effect on assets or equity

answer

A) decreases assets, decreases equity

question

A major purpose of preparing closing entries is to A) zero out the liability accounts B) update the Retained Earnings account C) adjust the asset accounts to their correct current balances D) close out the supplies account

answer

B) update the Retained Earnings account

question

Which financial statement covers a period of time? A) Income statement B) Balance sheet C) Statement of cash flows D) Both a and c

answer

D) Both a and c

question

How do you calculate earned revenue for the year?

answer

unearned revenue, beginning+ advance payments- unearned revenue, ending

question

During the year a company has $270,000 in revenues, $135,000 in expenses, and $7,000 in dividend payments. Stockholders' equity changed by how much?

answer

$128,000 revenues (270,000) - expenses (135,000) = net income (135,000) Net income (135,000) - dividends (7,000)= change in retained earnings (128,000)

question

On Oct. 1, an apartment complex received $4,800 from a tenant for four month's rent. The receipt was credited to unearned rent revenue. What adjusting entry is needed on December 31? A) unearned Rent Revenue, 1,200 and rent revenue 1,200 B) Cash 1,200, and rent revenue 1,200 C) Rent revenue 1,200, and unearned rent revenue 1,200 D) Unearned rent revenue 3,600, and rent revenue 3,600

answer

D) Unearned rent revenue 3,600, and rent revenue 3,600 Adjusting entry: [($4,800/ 4 months paid rent) x 3 months expired] = $3,600

question

A business' receipt of a $120,000 building, with a $90,000 mortgage payable, and issuance of $30,000 of common stock will A) decrease assets by $90,000 B) increase stockholders' equity by $120,000 C) increase assets by $30,000 D) increase stockholders' equity by $30,000

answer

D) increase stockholders' equity by $30,000

question

A debit entry to an account A) increases assets B) increases stockholder's equity C) increases liabilities D) both B and C

answer

A) increases assets

question

Unadjusted net income equals $6,000. Calculate what net income will be after the following adjustments: 1) salaries payable to employees, $540 2) interest due on note payable at the bank, $150 3) unearned revenue that has been earned, $950 4) supplies used, $175

answer

6000-540-159+950-175= 6,085

question

Net income appears on which financial statements? A) Balance sheet B) Income statement C) Statement of retained earnings D) Both B and C

answer

D) Both B and C

question

Accounts payable had a normal beginning of $2000. During the period, there were debit points of $500, and credit posting os $1000. What was the ending balance?

answer

2000+1000-500= 2,500

question

Purchasing a laptop computer on account will A) have no effect on equity B) increase total assets C) increase total liabilities D) all of the above

answer

D) all of the above

question

Beryl Strauss began a music business in July 2014. Strauss prepares monthly financial statements and uses the accrual basis of accounting. The following transactions are StraussStrauss ?Company's only activities during July through? October: Jul 14: Bought music on account for $25, with payment to other supplier due in 90 days Aug 3: Performed a job on account for Jimmy Jones, for $40, collectable from Jones in 30 days. Used up all the music purchased on July 14 Sept 16: Collected the $40 receivable from Jones Oct 22: Paid the $25 owed to the supplier from July 14 transaction In which month should Strauss record the coast of the music as one expense?

answer

August

question

A financial statement that reports revenue and expenses is called the A) balance sheet B) statement of cash flows C) statement of retained earnings D) income statement

answer

D) incomes statement

question

If the credit to record the purchase of supplies on account is not posted, A) assets will be understated B) stockholders' equity will be understated C) expenses will be overstated D) liabilities will be understated

answer

D) liabilities will be understated

question

The journal entry to record a payment on account will A) debit cash and credit expenses B) debit expenses and credit cash C) debit accounts payable and credit cash D) debit accounts payable and credit retained earnings

answer

C) debit accounts payable and credit cash

question

The amount a company expects to collect from customers appears on the A) balance sheet in the stockholders' equity section B) balance sheet in the current assets section C) statement of cash flows D) income statement in the expenses section

answer

B) balance sheet in the current assets section

question

An attorney performs services of? $1,100 for a client and receives? $400 cash with the remainder on account. The journal entry for this transaction would A) debit cash, debit accounts receivable, credit service revenue B) debit cash, credit accounts receivable, credit service revenue C) debit cash, debit service revenue, credit accounts receivable D) debit cash, credit service revenue

answer

A) debit cash, debit accounts receivable, credit service revenue

question

Adjusting entries A) are needed to measure the period's net income or net loss B) update the accounts C) do not debit or credit cash D) all of the above

answer

D) all of the above

question

If a real estate company fails to accrue commission revenue, A) assets are understated, and net income is understated B) net income is understated, and stockholders' equity is overstated C) revenues are understated, and net income is overstated D) liabilities are overstated, and owners' equity is understated

answer

A) assets are understated, and net income is understated

question

The primary objective of financial reporting is to provide information A) about the profitability of the enterprise B) on the cash flows of the company C) useful for making investment and credit decisions D) to the federal government

answer

C) useful for making investment and credit decisions

question

Receiving cash from a customer on account will A) increase stockholders' equity B) decrease liabilities C) increase total assets D) have no effect on total assets

answer

D) have no effect on total assets

question

For 2014, a company had revenues in excess of expenses. Which statement describes the company's entries at the end of 2014 (assume there is only one closing entry for both revenue and expenses)? 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 debited, expenses will be credited, and retained earnings will be debited D) Revenues will be credited, expenses will be debited, and retained earnings will be debited

answer

A) Revenues will be debited, expenses will be credited, and retained earnings will be credited

question

All of the following statements are true except one. Which statement is false? A) adjusting entries are required for a business that uses the cash basis B) Accrual accounting produces better information than cash-basis accounting C) The expense recognition principle directs accountants to identify and measure all expenses incurred and deduct them from revenues earned during the same period D) A fiscal year may end on some date other than December 31

answer

A) adjusting entries are required for a business that uses the cash basis

question

Which of the following will increase an asset and increase stockholders' equity? A) Performing a service on account for a customer B) Borrowing money from a bank C) Collecting cash from a customer on accounts receivable D) Purchasing supplies on account

answer

A) Performing a service on account for a customer

question

All of the following statements are true except one. Which statement is false? A) A proprietorship is a business with several owners B) Bookkeeping is only a part of accounting C) Professional accountants are held to a high standard of ethical conduct D) The organization that formulates generally accepted accounting principles in the United States is the financial accounting standards board

answer

A) A proprietorship is a business with several owners

question

Net income appears on which financial statement? A) Balance sheet B) Statement of retained earnings C) Income statement D) Both B and C

answer

D) Both B and C

question

Smith, Inc., purchased supplies for $1,300 during 2014. At year-end, Smith had $500 of supplies left. The adjusting entry should A) debit Supplies $800 B) debit Supplies $500 C) debit Supplies Expense 800 D) credit supplies $500

answer

C) debit Supplies Expense 800 ($1,300=$500)= $800

question

The accounting equation can be expressed as A) Assets + Liabilities= Owners' equity B) Assets= Liabilities - Owners' equity C) Assets- Liabilities= Owners' equity D) Owners' equity- Assets= Liabilities

answer

C) Assets- Liabilities= Owners' equity

question

Dixie Duck Corporation made sales of $750 million during 2014. Of this? amount, Dixie Duck collected cash for all but $31 million. The? company's cost of goods sold was $280 ?million, and all other expenses for the year totaled $275 million. Also during 2014?, Dixie Duck paid $430 million for its inventory and $255 million for everything else. Beginning cash was $85 million. Dixie Duck?'s top management is interviewing you for a job and they ask two? questions: a. How much was Dixie Duck?'s net income for 2014?? b. How much was Dixie Duck?'s cash balance at the end of 2014??

answer

a) sales revenue (750) - cost of goods sold (280)- all other expenses (257)= net income (195) b) beginning cash (85) + collections (719) - payments for inventory (430) - payment for other expenses (255)= ending cash (119)

question

Which statement is false? A) Dividends are increased by credits B) Revenues are increased by credits C) Liabilities are decreased by debits D) Assets are increased by debits

answer

A) Dividends are increased by credits

question

Revenues are A) Increased in paid-in capital resulting from the owners investing in the business B) decreases in liabilities resulting from paying off loans C) increases in retained earnings resulting from selling products or performing services D) All of the above

answer

C) increases in retained earnings resulting from selling products or performing services

question

If the credit to record the purchase of supplies on account is not posted, A) liabilities will be understated B) stockholders' equity will be understated C) expenses will be overstated D) assets will be understated

answer

A) liabilities will be understated

question

The journal entry to record the purchase of supplies on account A) credits supplies and debits accounts payable B) debits supplies and credits accounts payable C) credits supplies and debits cash D) debits supplies expense and credits supplies

answer

B) debits supplies and credits accounts payable

question

Which account types normally have a credit balance? A) Expenses B) Revenues C) Liabilities D) Both B and C

answer

D) Both B and C

question

The basic summary device of accounting is A) account B) journal C) trial balance D) ledger

answer

A) account

Accounting Exam 1 Practice Test Q’s – Flashcards

Unlock all answers in this set

Haven't found what you were looking for?

Search for samples, answers to your questions and flashcards