ACC201 C1-3 Quizes
If the retained earnings account increases from the beginning of the year to the end of the year, then . . .
net income is greater than dividends.
A journal is not useful for . . .
preparing financial statements.
The recording process occurs . . .
repeatedly during the accounting period.
On June 1, 2015, Portugal Inc. reported a cash balance of $12,000. During June, Portugal made deposits of $5,000 and made disbursements totalling $14,000. What is the cash balance at the end of June?
$3,000 debit balance
Black Keys Company began the year with stockholders' equity of $280,000. During the year, the company recorded revenues of $375,000, expenses of $285,000, and paid dividends of $30,000. What was Black Keys' stockholders' equity at the end of the year?
$340,000 [$280,000 + ($375,000 - $285,000 - $30,000) = $340,000]
Employees at Tengo Corporation are paid $15,000 cash every Friday for working Monday through Friday. The calendar year accounting period ends on Wednesday, December 31. How much salaries and wages expense should be recorded two days later on January 2?
$6,000 ($15,000/5 = $3,000*2 = $6,000)
Uncle Tupelo's Gifts signs a three-month note payable to help finance increases in inventory for the Christmas shopping season. The note is signed on November 1 in the amount of $75,000 with annual interest of 12%. What is the adjusting entry to be made on December 31 for the interest expense accrued to that date, if no entries have been made previously for the interest?
(Debit) Interest Expense $1,500 (Credit) Interest Payable $1,500 [$75,000*0.12*(1/12)=$750*2=$1,500]
Stone Roses Candies paid employee wages on and through Friday, January 26, and the next payroll will be paid in February. There are three more working days in January (29-31). Employees work 5 days a week and the company pays $1,500 a day in wages. What will be the adjusting entry to accrue wages expense at the end of January?
(Debit) Salaries and Wages Expense $4,500 (Credit) Salaries and Wages Payable $4,500
Stockholders' equity is increased by . . .
revenues.
Ethics are the standards of conduct by which one's actions are judged as . . .
right or wrong; honest or dishonest; fair or unfair
What is not a technique accountants use to interpret and report financial information?
special memos for each class of external users
If an adjusting entry is not made for an accrued revenue . . .
stockholders' equity will be understated.
A basic assumption of accounting assumes that the dollar is . . .
the common unit of measure for all business transactions.
If the sum of the debit column equals the sum of the credit column in a trial balance, it indicates . . .
the mathematical equality of the accounting equation.
If a business pays rent in advance and debits a Prepaid Rent account, the company receiving the rent payment will credit . . .
Unearned Rent Revenue.
A trial balance would not help in detecting which errors?
A transaction that is not journalized; A journal entry that is posted twice; Offsetting errors are made in recording the transaction
A trial balance would only help in detecting which error?
A transposition error when transferring the debit side of journal entry to the ledger
The usual sequence of steps in the transaction recording process is . . .
analyzing > journalizing > posting in ledger
As prepaid expenses expire with the passage of time, the correct adjusting entry will be a . . .
debit to an expense account and credit to an asset account.
A journal is useful for . . .
disclosing in one place the complete effect of a transaction; providing a record of transactions; locating and preventing errors
What are techniques accountants use to interpret and report financial information?
graphs; ratios; charts
Sebastian Belle, CPA, has billed her clients for services performed. She subsequently receives payments from her clients. What entry will Sebastian make upon receipt of the payments?
Debit Cash and credit Accounts Receivable
An accountant has debited an asset account for $1,300 and credited a liability account for $500. Which of the following would be an incorrect way to complete the recording of the transaction?
Debit a stockholders' equity account for $800
What is not considered a business transaction?
Hiring employees
Who is considered as external users?
Internal Revenue Service Agent; Customers; Creditors; Labor Unions
Who is considered as internal users?
Managers; Production Supervisors
Stahl Consulting started the year with total assets of $60,000 and total liabilities of $15,000. During the year, the business recorded $48,000 in catering revenues and $30,000 in expenses. Stahl issued stock of $9,000 and paid dividends of $15,000 during the year. Stockholders' equity changed by what amount from the beginning of the year to the end of the year?
$12,000 [($60,000 - $15,000) + $9,000 + ($48,000 - $30,000 - $15,000) = $57,000; $57,000 - $45,000 = $12,000)
NWA Air Charter signed a four-month note payable in the amount of $20,000 on September 1. The note requires interest at an annual rate of 9%. The amount of interest to be accrued at the end of September is
$150 [$20,000*0.09*(1/12)=$150]
Pixies Inc. pays its rent of $54,000 annually on January 1. If the February 28 monthly adjusting entry for prepaid rent is omitted, which of the following will be true?
Assets will be overstated by $4,500 and net income and stockholders' equity will be overstated by $4,500. ($54,000/12=$4,500)
What is the accounting process?
identification, recording, and communication
What is considered a business transaction?
incurred utility expenses; earned revenues for services performed; issuance of stock in exchange for cash
In general, the shorter the time period, the difficulty of making the proper adjustments to accounts . . .
is increased.
The right side of an account . . .
is the credit side.
The name given to entering transaction data in the journal is . . .
journalizing.
After a business transaction has been analyzed and entered in the book of original entry, the next step in the recording process is to transfer the information to . . .
ledger accounts.