Question 1
The objectives of financial reporting are met in large part
by a set of financial statements. Of the following which is not one of these
statements?
Select one:
a.
Statement of Cash Flows
b.
Statement of Financial Position
c.
Federal Income Tax Return
d.
Income Statement
Question 2
The primary assurance that financial statements issued by
management are complete and reliable is by:
Select one:
a. An
audit performed by a certified public accountant
b. An
audit performed by the IRS
c.
Internal controls
d.
Generally accepted accounting principles
Question 3
During the current year, the assets of The Big Dial increase
by $132,000, and the liabilities increase by $80,000. As a result, owners'
equity:
Select one:
a.
Increases by $52,000 during the year
b.
Decreases by $52,000 during the year
c.
Increases by $212,000 during the year
d. Is
$52,000 at the end of the year
Question 4
A business purchases land and building, giving in exchange
$225,000 cash and a note payable for $95,000. This transaction:
Select one:
a. Increases
owners' equity
b.
Decreases total assets
c.
Decreases total liabilities
d.
Increases total assets
Question 5
The account balances for HydroTech as of May 31, 2001, are
listed below in random order:
Accounts Payable............$10,000
Accounts Receivable.........12,000
Building...........................40,000
Cash................................6,000
Equipment.......................16,000
Land...............................50,000
Notes Payable..................28,000
Capital Stock...................86,000
Refer to the above data. The balance in the Asset account
is:
Select one:
a.
$86,000
b.
$124,000
c.
$144,000
d. Some
other amount
Question 6
The account balances for HydroTech as of May 31, 2001, are
listed below in random order:
Accounts Payable............$10,000
Accounts Receivable.........12,000
Building...........................40,000
Cash................................6,000
Equipment.......................16,000
Land...............................50,000
Notes Payable..................28,000
Capital Stock...................86,000
On June 3, HydroTech collected $7,000 of its accounts
receivable and paid $4,000 of its accounts payable. In addition, $2,400 of
additional stock was issued for cash.
Refer to the above data. On June 4, the balance in the Cash
account is:
Select one:
a. Some
other amount
b.
$11,400
c.
$9,000
d.
$5,400
Question 7
The account balances for HydroTech as of May 31, 2001, are
listed below in random order:
Accounts Payable............$10,000
Accounts Receivable.........12,000
Building...........................40,000
Cash................................6,000
Equipment.......................16,000
Land...............................50,000
Notes Payable..................28,000
Capital Stock...................86,000
On June 3, HydroTech collected $7,000 of its accounts
receivable and paid $4,000 of its accounts payable. In addition, $2,400 of
additional stock was issued for cash. On June 4, another $3,000 of stock was
issued for cash.
Refer to the above data. On June 5, the balance in the
Capital Stock Account is:
Select one:
a.
$79,000
b. Some
other amount
c.
$81,400
d.
$91,400
Question 8
The account balances for HydroTech as of May 31, 2001, are
listed below in random order:
Accounts Payable............$10,000
Accounts Receivable.........12,000
Building...........................40,000
Cash................................6,000
Equipment.......................16,000
Land...............................50,000
Notes Payable..................28,000
Capital Stock...................86,000
On June 3, HydroTech collected $7,000 of its accounts
receivable and paid $4,000 of its accounts payable. In addition, $2,400 of additional
stock was issued for cash. One June 4, another $3,000 of stock was issued for
cash. On June 5, new equipment costing $5,000 was acquired. A cash payment was
made for $1,000 and a Note Payable of $4,000 was issued for the balance. In a
trial balance prepared on June 5, the sum of the credit column is:
Note: Be sure to take into account all transactions from
June 3, 4 and 5.
Select one:
a.
$123,000
b.
$125,000
c.
$129,400
d. Some
other amount
Question 9
The account balances for HydroTech as of May 31, 2001, are
listed below in random order:
Accounts Payable............$10,000
Accounts Receivable.........12,000
Building...........................40,000
Cash................................6,000
Equipment.......................16,000
Land...............................50,000
Notes Payable..................28,000
Capital Stock...................86,000
On June 3, HydroTech collected $7,000 of its accounts
receivable and paid $4,000 of its accounts payable. In addition, $2,400 of
additional stock was issued for cash. One June 4, another $3,000 of stock was
issued for cash. On June 5, new equipment costing $5,000 was acquired. A cash
payment was made for $1,000 and a Note Payable of $4,000 was issued for the
balance. The trial balance prepared on June 5, would, therefore, be as follows:
HydroTech
Trial Balance
June 5, 2001
Debit
Credit
Cash
13,400
Accounts Receivable
5,000
Equipment
21,000
Land
50,000
Building
40,000
Accounts Payable
6,000
Notes Payable
32,000
Capital Stock
91,400
TOTAL
129,400
129,400
On June 6, the bookkeeper for HydroTech makes this entry:
Supplies
6,300
Cash
1,500
Accounts Payable
4,800
As a result of this transaction:
Select one:
a.
Increases total assets $6,300
b.
Decreases total assets
c.
Involves the sale of supplies for $6,300
d. Increases
liabilities
Question 10
On March 2, purchased auto cleaning supplies from Pip Boys
for $240 on account. How would this transaction be recorded in the two-column
journal for Marc’s Detailing?
Select one:
a.
None of the above
b.
Debit Supplies for 240, credit Accounts Receivable for 240
c.
Debit Accounts Receivable for 240, credit Supplies for 240
d.
Debit Supplies for 240, credit Accounts Payable for 240
Question 11
On March 4, collected an account receivable of $470 from a
customer, At-Your-Service Limousines. How would this transaction be recorded in
the two-column journal for Marc’s Detailing?
Select one:
a.
None of the above
b.
Debit Accounts Payable for 470, credit Cash for 470
c.
Debit Accounts Receivable for 470, credit Cash for 470
d.
Debit Cash for 470, credit Accounts Receivable for 470
Question 12
On March 5, Paid $320 in partial payment of an account
payable to Sears for equipment purchased in February.How would this transaction
be recorded in the two-column journal for Marc’s Detailing?
Select one:
a.
Debit Accounts Payable for 320, Credit Cash for 320
b.
Debit Accounts Receivable for 320, Credit Cash for 320.
c.
Debit Cash for 320, Credit Accounts Payable for 320
d.
Debit Equipment for 320, Credit Accounts Payable for 320
Question 13
On March 7, Issued capital stock in exchange for $2,500
cash. How would this transaction be recorded in the two-column journal for
Marc’s Detailing?
Select one:
a.
Debit Accounts Payable for 2,500, credit Drawing for 2,500
b.
Debit Cash for 2,500, credit Capital Stock 2,500
c.
Debit Accounts Receivable for 2,500, credit Capital Stock for 2,500.
d.
Debit Capital Stock for 2,500, credit Cash for 2,500.
Question 14
On March 9, purchased office equipment from Jerome’s
Warehouse for $3,300; paid $1,000 cash and issued a note payable due in 90 days
for the balance. How would this transaction be recorded in the two-column
journal for Marc’s Detailing?
Select one:
a.
Debit Office Equipment for 3,300, credit Cash for 1,000, credit Notes Payable
for 2,300.
b.
Debit Cash for 1,000, debit Accounts Receivable for 2,300, credit Office
Equipment for 3,300.
c.
Debit Cash for 1,000, debit Notes Payable for 2,300, credit Office Equipment
for 3,300.
d.
Debit Office Equipment for 3,300, credit Cash for 1,000, credit Notes
Receivable for 2,300
Question 15
West Coast Potters purchased a kiln on February 1 for $7,200
which is guaranteed to have a useful life of 10 years. Assuming adjusting
entries are prepared monthly, what is the book value of the kiln on June 30?
Select one:
a.
$7,200
b.
$6,480
c.
$300.
d.
$6,900.
Question 16
Village Square Cinema sells books of movie tickets for $100,
which contain tickets to admission to 20 movies. During July, 50 books of
tickets were sold for $5,000 and this amount was credited to Unearned
Admissions Revenue. By the end of July, it was determined that 400 movie
tickets had been used by customers who had purchased the ticket books. The July
31 adjusting entry is:
Select one:
a.
Debit Admissions Revenue $2,000 and credit Unearned Admissions Revenue $2,000
b.
Debit Unearned Admissions Revenue $4,000 and credit Admissions Revenue $4,000.
c.
Debit Admissions Revenue $3,000 and credit Unearned Admissions Revenue $3,000.
d.
Debit Unearned Admissions Revenue $2,000 and credit Admissions Revenue $2,000.
Question 17
A December 31 trial balance (before December adjustments)
shows Office Supplies of $600 and Office Supplies Expense of $1,010. A December
adjusting entry recorded office supplies expense of $170. After the December
adjusting entries have been posted, what is the proper balance in the Office
Supplies account on December 31?
Select one:
a.
$840.
b.
$770.
c.
$1,180.
d.
$430.
Question 18
Net income of Samurai Company was $40,000 before any
year-end adjusting entries were made. The following adjustments are necessary:
interest accrued on a company savings account, $110; portion of insurance
expiring, $300; portion of fees collected in advance now earned, $2,400. Net
income as shown in the income statement for the current year should be:
Select one:
a.
$42,210
b.
$38,010
c.
$41,990
d.
$37,410
Question 19
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Question text
The adjusting entry to recognize interest owed by Bradley
Tools to the bank for May was omitted in month-end procedures. As a result of
this error, Bradley’s
Select one:
a. May
net income is overstated and May 31 liabilities understated
b. May
expenses are understated and May 31 ownerâ??s equity understated.
c. May
net income is understated and May 31 assets overstated.
d. May
expenses are understated and May 31 assets overstated.
Question 20
The accountant for Timesure Inc. prepared the following
trial balance at January 31, 2000, after one month of operations:
Debit
Credit
Cash
5,400
Accounts Receivable
4,200
Unexpired Insurance
1,800
Office Equipment
18,000
Unearned Cosulting Fees
3,000
Capital Stock
15,300
Retained Earnings, January 1, 2000
0
Dividends
3,000
Consulting Fees Earned
25,000
Salaries Expense
7,400
Utilities Expense
1,400
Rent Expense
1,800
Supplies Expense
300
TOTALS
43,000
43,300
What adjusting journal entry should be made to record
consulting services rendered to a client in January, not yet billed or
recorded, $1,900?
Select one:
a.
Debit Unearned Consulting Fees Earned for 1,900.and credit Consulting Fees
Earned for 1,900.
b.
Debit Cash for 1,900 and credit Consulting Fees Earned for 1,900.
c.
Debit Accounts Receivable for 1,900 and credit Consulting Fees Earned for
1,900.
d.
Debit Accounts Receivable for 1,900 and credit Unearned Consulting Fees
Earned.for 1,900.
Question 21
The accountant for Timesure Inc. prepared the following
trial balance at January 31, 2000, after one month of operations:
Debit
Credit
Cash
5,400
Accounts Receivable
4,200
Unexpired Insurance
1,800
Office Equipment
18,000
Unearned Cosulting Fees
3,000
Capital Stock
15,300
Retained Earnings, January 1, 2000
0
Dividends
3,000
Consulting Fees Earned
25,000
Salaries Expense
7,400
Utilities Expense
1,400
Rent Expense
1,800
Supplies Expense
300
TOTALS
43,000
43,300
What adjusting journal entry should be made to record the
posrtion of insurance expiring in January, $150?
Select one:
a.
Debit Insurance Expense for 150 and credit Cash for 150.
b.
None of the above.
c.
Debit Insurance Expense for 150 and credit Unexpired Insurance for 150.
d.
Debit Unexpired Insurance for 150 and credit Insurance Expense for 150.
Question 22
The accountant for Timesure Inc. prepared the following
trial balance at January 31, 2000, after one month of operations:
Debit
Credit
Cash
5,400
Accounts Receivable
4,200
Unexpired Insurance
1,800
Office Equipment
18,000
Unearned Cosulting Fees
3,000
Capital Stock
15,300
Retained Earnings, January 1, 2000
0
Dividends
3,000
Consulting Fees Earned
25,000
Salaries Expense
7,400
Utilities Expense
1,400
Rent Expense
1,800
Supplies Expense
300
TOTALS
43,000
43,300
What adjusting journal entry should be made to record the
portion of Income Taxes Expense for January of $2,000.
Select one:
a.
Debit Income Taxes Payable and credit Cash for 2,000.
b.
Debit Income Taxes Expense for 2,000 and credit Income Taxes Payable for 2,000
c.
Debit Prepaid Taxes and credit Cash for 2,000.
d.
None of the above.
Question 23
Presented below is the adjusted trial balance of TWK, Inc.
at December 31:
Debit
Credit
Cash
10
Accounts Receivable
20
Equipment
200
Accounts Payable
15
Capital Stock
100
Retained Earnings
50
Dividends
5
Service Revenue
180
Salaries Expense
80
Depreciation Expense
20
Refer to the above data. Which accounts are closed to income
summary?
Select one:
a. All
accounts that are not nominal.
b. All
accounts.
c.
Revenues and expenses
d.
Revenues, expenses, and dividends.
Question 24
Presented below is the adjusted trial balance of TWK, Inc.
at December 31:
Debit
Credit
Cash
10
Accounts Receivable
20
Equipment
200
Accounts Payable
15
Capital Stock
100
Retained Earnings
50
Dividends
5
Service Revenue
180
Salaries Expense
60
Depreciation Expense
20
Refer to the above data. What is the balance in income
summary before it is closed to retained earnings?
Select one:
a.
$100
b. $65
c.
$180.
d. $75
Question 25
Presented below is the adjusted trial balance of TWK, Inc.
at December 31:
Debit
Credit
Cash
10
Accounts Receivable
20
Equipment
200
Accounts Payable
15
Capital Stock
100
Retained Earnings
50
Dividends
5
Service Revenue
180
Salaries Expense
80
Depreciation Expense
20
Supplies Expense
10
Refer to the above data. What is the balance in retained
earnings at December 31?
Select one:
a.
$115
b. $70
c.
$50.
d.
$65.