Accounting Exam One – Flashcards
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Emmitt had the following final balances after the first year of operations: assets, $55,00; stockholders' equity, $25,000; dividends, $3,000; and net income, $10,000. What is the amount of Emmitt's liabilities? A. $55,000 B. $30,000 C. $13,000 D. $7,000
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B
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On January 1, Gucci Brothers Inc. started the year with a $492,000 balance in Retained Earnings and a $605,000 balance in Common Stock. During the year, the company earned net income of $92,000, paid a dividend of $15,200, and issued more common stock for $27,500. What is total stockholders' equity at the end of the year? A. $1,231,700 B. $1,097,000 C. $1,201,300 D. 1,588,300
answer
C
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The following amounts are reported in the ledger of Mariah Company: Assets $80,000 Liabilities $36,000 Retained Earnings $12,000 What is the balance in the Common Stock account? A. $44,000 B. $32,000 C. $48,000 D. $42,000
answer
B
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Childers Service Company provides services to customers totaling $3,000, for which it billed the customers. How would the transaction be recorded? A. Debit Cash $3,000, credit Service Revenue $3,000 B. Debit Accounts Receivable $3,000, credit Service Revenue $3,000 C. Debit Accounts Receivable $3,000, credit Cash $3,000 D. Debit Service Revenue $3,000, credit Accounts Receivable $3,000
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B
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Summer Leasing received $12,000 for 24 months rent in advance. How should Summer record this transaction? A. Debit Prepaid Rent; credit Rent Expense B. Debit Cash; credit Unearned Revenue C. Debit Cash; credit Service Revenue D. Debit Rent Expense; credit Cash
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B
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When a company pays $2,500 dividends to its stockholders, the transaction should be recorded as: A. Debit Cash; credit Dividends B. Debit Retained Earnings; credit Dividends C. Debit Dividends; credit Cash D. Debit Dividends; credit Accounts Payable
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C
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Clement Company paid an account payable related to a previous utility bill of $1,000. This transaction should be recorded as follows on the payment date: A. Debit Accounts Payable $1,000, credit Cash $1,000 B. Debit Cash $1,000, credit Accounts Payable $1,000 C. Debit Utilities Expense $1,000, credit Cash $1,000 D. Debit Cash $1,000, credit Utilities Expense $1,000
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A
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On July 7, Saints Inc. received $10,000 in cash from a customer for services to be provided on October 0. Which of the following describes how the transaction should be recorded on July 7? A. Debit Cash $10,000, credit Service Revenue $10,000 B. Debit Accounts Receivable $10,000, credit Service Revenue $10,000 C. Debit Cash $10,000, credit Unearned Revenue $10,000 D. Debit Unearned Revenue $10,000, credit Cash $10,000
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C
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During the year, Cheng Company paid salaries of $24,000. In addition, $8,000 in salaries had accrued by the end of the year but has not been paid. The year-end adjusting entry would include which one of the following? A. Debit to Salaries Expense for $32,000 B. Credit to Salaries Expense for $8,000 C. Debit to Salaries Payable for $24,000 D. Credit to Salaries Payable for $8,000
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D
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At the beginning of December, Global Corporation had $2,000 in supplies on hand. During the month, supplies purchased amounted to $3,000, but by the end of the month the supplies balance was only $800. What is the appropriate month-end adjusting entry? A. Debit Cash $4,400, credit Supplies $4,200 B. Debit Supplies $4,200, credit Supplies Expense $4,200 C. Debit Supplies Expense $4,200, credit Supplies $4,200 D. Debit Cash $800, credit Supplies $800
answer
C
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Eve's Apples opened for business on January 1, 2015, and paid for two insurance policies effective that date. The liability policy was $36,000 for eighteen-months, and the crop damage policy was $12,000 for a two-year term. What was the balance in Eve's Prepaid Insurance account as of December 31,2015? A. $9,000 B. $18,000 C. $30,000 D. $48,000
answer
B
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The ending Retained Earnings balance of Juan's Mexican Restaurant chain increased by $3.2 million from the beginning of the year. The company declared a dividend of $1.3 million during the year. What was the net income earned during the year? A. $1.9 million B. $3.2 million C. $4.5 million D. $1.3 million
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C
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On May 21, Money Corporation's Cash showed a balance of $10,000 before the bank reconciliation was prepared. After examining the May bank statement and items included with it it, the company's accountant found the following items: Checks Outstanding $2,250 Deposits Outstanding $1,900 NSF Check $100 Service Fees $40 Error Money Corp wrote a check for $30 but recorded it incorrectly for $300 What is the amount of cash that should be reported in the company's balance sheet as of May 31? A. $9,860 B. $9,650 C. $10,130 D. $10,410
answer
C
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At the time a $400 petty cash fund is being replenished, the company's accountant finds vouchers totaling $350 and petty cash of $50. The vouchers include: postage, $100; business lunches, $150; delivery fees, $75; and office supplies, $35. Which of the following is not recorded when recognizing expenditures from the petty cash fund? A. Debit Postage Expense, $100 B. Debit Supplies, $25 C. Credit Petty Cash, $350 D. Debit Petty Cash, $350
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D
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What is the concept behind separation of duties in establishing internal controls? A. The company's financial accountant should not share information with the company's tax accountant. B. Duties of middle-level managers should be clearly separated from those of top executives. C. Employee fraud is less likely to occur when access to assets and access to accounting records are separated. D. The external auditors of the company should have no content wight he managers while the audit is taking place.
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C
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After preparing the bank reconciliation, an NSF check would result in which of the following when recording the adjustment to the company's cash balance? A. Debit to Service Fee Expense B. Credit to Accounts Payable C. Credit to Service Revenue D. Debit to Accounts Receivable
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D
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Operating cash flows would exclude: A. Payment of employee salaries B. Receipt of cash from customers C. Payment of dividends D. Payment for advertising
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C
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Pawn Shops Unlimited recorded the following four transactions during April. Which of these transaction would have the same income statement impact in April regardless of whether the company used accrual-basis or cash-basis accounting? A. Received $600 from customers for services to be proved in May. B. Paid $1,800 for a six-month insurance policy covering the period July 1--December 31. C. Paid $700 for an advertisement that appeared in the April 17 edition of the Las Vegas Sun Newspaper. D. Received $300 from customers for services performed in March.
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C
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Which of the following accounting principles states that expense are recognized in the same period as the revenues they help to generate? A. Accounting Equation B. Revenue recognition C. Matching D. Conservatism
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C
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The revenue recognition principles states that: A. Revenue should be recognized in the period the cash is received B. Revenue should be recognized in the period earned C. Revenue should be recognized in the balance sheet. D. Revenue is a component of common stock.
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B
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Financial accounting: A. Provides information primarily for a company's employees B. Provides information primarily for the use of managers of the company C. Provides information primarily for external decision makers D. Is primarily used to compute a company's tax obligation
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C
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One disadvantage of the corporate form of business is: A. Access to more capital B. Limited Liability C. Smaller in size D. Double taxation
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B
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What is the formula to find claims to resources?
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Claims to resources= Assets-Liabilities
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What is included on the balance sheet?
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Assets, liabilities, and stockholders' equity
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What is the equation that best describes the income statement?
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Net Income=Revenues-Expenses
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Purchase office supplies on account, $1,200. Record the journal entry.
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Supplies Accounts Payable
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Provide services to customers for cash, $2,500. Record the journal entry.
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Cash Service Revenue
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Pay $1,100 in salaries for the current month. Record the journal entry.
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Salaries Expense Cash
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Childers Service Company provides services to customers totaling $3,900, for which it billed the customers. How would the transaction be recorded?
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AR Service Revenue
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A company received a bill for newspaper advertising services received, $390. The bill will be paid in 10 days. How would the transaction be recorded today.
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Advertising Expense Accounts Payable
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When a company pays utilities of $1,820 in cash, the transaction is recorded as:
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Utilities Expense Cash
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Summer Leasing received $10,300 for 24 month rent in advance. How should Summer record this transaction?
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Cash Unearned Revenue
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Assume that $17,400 cash is paid for insurance to cover the next year. The appropriate debit and credit are:
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Prepaid Insurance Cash
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When a company pays $2,100 for dividends to its stockholders, the transaction should be recorded as:
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Dividends Cash
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Clement Company paid an account payable related to a previous utility bill of $950. This transaction should be recored as follows on the payment date:
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Accounts Payable Cash
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On July 7, Saints Inc. received $9,000 in cash from a customer for services to be provided on October 10. Which of the following describes how the transaction should be recorded on July 7?
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Cash Unearned Revenue
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What is the entry to close revenue?
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Revenue Retained Earnings
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What is the entry to close expenses?
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Retained Earnings Expense
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What is the entry to close dividends?
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Retained Earnings Dividends
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During the year, Cheng Company paid salaries of $24,000. In addition, $8,000 in salaries has accrued by the end of the year but has not been paid. The year-end adjusting entry would include what?
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Salaries Expense 8,000 Salaries Payable 8,000
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At the beginning of December, Global Corporation had $2,000 in supplies on hand. During the month, supplies purchased amounted to $3,000, but by the end of the month the supplies balance was only $800. What is the appropriate month-end adjusting entry?
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Supplies Expense 4,200 Supplies 4,200
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Eve's Apples opened for business on January 1, 2015, and paid for two insurance policies effective that date. The liability policy was $36,000 for eighteen-months, and the crop damage policy was $12,000 for a two-year term. What was the balance in Eve's Prepaid Insurance account as of December 31, 2015?
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$18,000
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On September 1, 2015, Gold Magazine sold 400 one-year subscriptions for $90 each. The total amount received was credited to Unearned Revenue. What would be the required adjusting entry at December 31, 2015?
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Unearned Revenue 12,000 Service Revenue 12,000
