AC101_P6

d

QN=141 At the beginning of 2009, a company's balance sheet reported the following balances: Total Assets = $125,000; Total Liabilities = $75,000; and Owner's Capital = $50,000. During 2009, the company reported revenues of $46,000 and expenses of $30,000. In addition, owner's withdrawals for the year totaled $20,000. Assuming no other changes to owner's capital, the balance in the owner's capital account at the end of 2009 would be: a. $66,000. b. $86,000. c. $(4,000). d. $46,000. e. Cannot be determined from the information provided.

a

QN=150 Depreciation is: a. The assigning or allocating of a fixed asset's cost to expense over the accounting periods that the asset is likely to be used. b. The assigning or allocating of a tangible asset's cost to expense over the accounting periods that the asset is likely to be used. c. The assigning or allocating of a intangible asset's cost to expense over the accounting periods that the asset is likely to be used. d. The assigning or allocating of a fixed asset's cost to expense over the accounting periods. e. None of these

b

QN=129 A company's Office Supplies account shows a beginning balance of $600 and an ending balance of $400. If office supplies expense for the year is $3,100, what amount of office supplies was purchased during the period? a. $2,700. b. $2,900. c. $3,300. d. $3,500. e. $3,700.

b

QN= 137 Journal entries recorded at the end of each accounting period to prepare the revenue, expense, and withdrawals accounts for the upcoming period and to update the owner's capital account for the events of the period just finished are referred to as: a. Adjusting entries. b. Closing entries. c. Final entries. d. Work sheet entries. e. Updating entries.

a

QN=1 31 The balance in the prepaid insurance account before adjustment at the end of the year is $4,800, which represents the insurance premiums for four months. The premiums were paid on November 1. The adjusting entry required on December 31 is: a. Debit Insurance Expense, $2,400; credit Prepaid Insurance, $2,400. b. Debit Prepaid Insurance, $2,400; credit Insurance Expense, $2,400. c. Debit Insurance Expense, $1,200; credit Prepaid Insurance, $1,200. d. Debit Prepaid Insurance, $1,200; credit Insurance Expense, $1,200 e. Debit Cash, $4,800; Credit Prepaid Insurance, $4,800.

e

QN=1 42 At the beginning of 2009, Beta Company's balance sheet reported Total Assets of $195,000 and Total Liabilities of $75,000. During 2009, the company reported total revenues of $226,000 and expenses of $175,000. Also, owner withdrawals during 2009 totaled $48,000. Assuming no other changes to owner's capital, the balance in the owner's capital account at the end of 2009 would be: a. $174,000. b. $78,000. c. Cannot be determined from the information provided. d. $120,000. e. $123,000.

d

QN=1 43 After preparing and posting the closing entries to close revenues (and gains) and expenses (and losses) into the income summary, the income summary account has a debit balance of $33,000. The entry to close the income summary account will include: a. A debit of $33,000 to owner withdrawals. b. A credit of $33,000 to owner withdrawals. c. A debit of $33,000 to income summary. d. A debit of $33,000 to owner capital. e. A credit of $33,000 to owner capital.

a

QN=1 44 Which of the following accounts is not increased by a debit? a. Revenue b. Expense c. Asset d. Withdrawal e. None of these

a

QN=1 45 Which of the following statements is true? a. A debit increases an asset while a credit decrease an asset b. A debit decreases an asset while a credit decrease an asset c. A debit increases a liability and a credit decreases a liability d. A debit increases revenues and a credit decreases revenues e. None of these

b

QN=1 46 Which of the following is a liability? a. Account receivable b. Account payable c. Owner's capital d. Owner's withdrawal e. None of these

b

QN=1 47 Which statement is true? a. Expenses increase Owner's equity b. Expenses decrease Owner's equity c. Expenses increase Owner's withdrawal d. Expenses decrease Owner's withdrawal e. None of these

a

QN=1 48 Which statement is true? a. The double entry system requires every transaction to be recorded in at least two places b. The double entry system requires every transaction to be recorded in at least three places c. The double entry system requires every transaction to be recorded in at least one places d. The double entry system requires every transaction to be recorded in at least four places e. None of these

c

QN=1 49 Which of the following accounts is not increased by a credit a. Revenue b. Liability c. Asset d. Owner's equity e. None of these

a

QN=126 On January 1, Southwest College received $1,200,000 in Unearned Tuition Revenue from its students for the spring semester, which spans four months beginning on January 2. What amount of tuition revenue should the college recognize on January 31? a. $300,000. b. $600,000. c. $800,000. d. $900,000. e. $1,200,000.

e

QN=127 The difference between the cost of an asset and the accumulated depreciation for that asset is called a. Depreciation Expense. b. Unearned Depreciation. c. Prepaid Depreciation. d. Depreciation Value. e. Book Value.

a

QN=128 A company purchased a new truck at a cost of $42,000 on July 1, 2009. The truck is estimated to have a useful life of 6 years and a salvage value of $3,000. The company uses the straight-line method of depreciation. How much depreciation expense will be recorded for the truck for the year ended December 31, 2009? a. $3,250. b. $3,500. c. $4,000. d. $6,500. e. $7,000.

c

QN=130 If accrued salaries were recorded on December 31 with a credit to Salaries Payable, the entry to record payment of these wages on the following January 5 would include: a. A debit to Cash and a credit to Salaries Payable. b. A debit to Cash and a credit to Prepaid Salaries. c. A debit to Salaries Payable and a credit to Cash. d. A debit to Salaries Payable and a credit to Salaries Expense. e. No entry would be necessary on January 5.

b

QN=132 What is the proper adjusting entry at December 31, the end of the accounting period, if the balance in the prepaid insurance account is $7,750 before adjustment, and the unexpired amount per analysis of policies is, $3,250? a. Debit Insurance Expense, $3,250; credit Prepaid Insurance, $3,250. b. Debit Insurance Expense, $4,500; credit Prepaid Insurance, $4,500. c. Debit Prepaid Insurance, $4,500; credit Insurance Expense, $4,500. d. Debit Insurance Expense, $7,750; credit Prepaid Insurance, $7,750. e. Debit Cash, $7,750; Credit Prepaid Insurance, $7,750.

b

QN=133 A company purchased new computers at a cost of $14,000 on September 30, 2010. The computers are estimated to have a useful life of 4 years and a salvage value of $2,000. The company uses the straight-line method of depreciation. How much depreciation expense will be recorded for the computers for the year ended December 31, 2010? a. $250 b. $750 c. $875 d. $1,000 e. $3,000

a

QN=134 The balance in Tee Tax Services' office supplies account on February 1 and February 28 was $1,200 and $375, respectively. If the office supplies expense for the month is $1,900, what amount of office supplies was purchased during February? a. $1,075 b. $1,500 c. $1,525 d. $2,325 e. $3,100

b

QN=135 Revenues, expenses, and withdrawals accounts, which are closed at the end of each accounting period are: a. Real accounts. b. Temporary accounts. c. Closing accounts. d. Permanent accounts. e. Balance sheet accounts.

c

QN=136 Assets, liabilities, and equity accounts are not closed; these accounts are called: a. Nominal accounts. b. Temporary accounts. c. Permanent accounts. d. Contra accounts. e. Accrued accounts.

c

QN=138 The J. Godfrey, Capital account has a credit balance of $17,000 before closing entries are made. If total revenues for the period are $55,200, total expenses are $39,800, and withdrawals are $9,000, what is the ending balance in the J. Godfrey, Capital account after all closing entries are made? a. $ 8,000. b. $15,400. c. $23,400. d. $17,000. e. $32,400.

b

QN=139 The Income Summary account is used: a. To adjust and update asset and liability accounts. b. To close the revenue and expense accounts. c. To determine the appropriate withdrawal amount. d. To replace the income statement under certain circumstances. e. To replace the capital account in some businesses.

d

QN=140 Dina Kader withdrew a total of $35,000 from her business during the current year. The entry needed to close the withdrawals account is: a. Debit Income Summary and credit Cash for $35,000. b. Debit Dina Kader, Withdrawals and credit Cash for $35,000. c. Debit Income Summary and credit Dina Kader, Withdrawals for $35,000. d. Debit Dina Kader, Capital and credit Dina Kader, Withdrawals for $35,000. e. Debit Dina Kader, Withdrawals and credit Dina Kader, Capital for $35,000.