acctg 1810 test 1
An adjusting entry can include a debit to a(n) a) liability and a credit to a revenue b) revenue and a credit to an asset c) asset and a credit to a liability d) expense and a credit to a revenue
a) liability and a credit to a revenue
Which of the following is a business event that is also considered a recordable transaction? a) a customer purchases merchandise b) a company hires a new employee c) a company orders a product from a supplier d) an employee sends a purchase requisition to the purchasing department
a) a customer purchases merchandise
Which of the following accounts is a contra account? a) accumulated depreciation, office furniture b) depreciation expense, office furniture c) unearned revenue d) office furniture
a) accumulated depreciation, office furniture
Which of the following events does NOT require an entry in journal form? a) agreement to perform a service at a future date b) purchase of a one-year insurance policy c) payment for a service performed previously d) performance of a service agreed to at a past date
a) agreement to perform a service at a future date
Which of the following transactions will NOT result in an increase in revenues? a) an investment in the business by the owner b) sale of services for cash c) sale of goods on credit d) accumulation of interest in bank account
a) an investment in the business by the owner
Accumulated depreciation is classified as a(n) a) contra-asset account b) liability c) contra-expense account d) expense account
a) contra-asset account
When a company receives an electric bill but will not be paying it right away, it should a) debit utilities expense and credit accounts payable b) make no entry until the bill is paid c) debit accounts payable and credit utilities expense d) debit utilities expense and credit accounts receivable
a) debit utilities expense and credit accounts payable
An adjusting entry made to record accrued interest on a note payable due next year consists of a debit to a) interest expense and a credit to interest payable b) interest expense and a credit to notes payable c) interest expense and a credit to cash d) interest receivable and a credit to interest earned
a) interest expense and a credit to interest payable
Which of the following assets is NOT subject to depreciation? a) land b) store fixtures c) computers d) art equipment
a) land
Failure to record depreciation at year end will result in an a) overstatement of total assets b) understatement of total liabilities c) understatement of net income d) overstatement of total liabilities
a) overstatement of total assets
A transaction in which six months rent is paid in advance results in a credit to cash and a debit to a) prepaid rent b) rent revenue c) rent receivable d) rent expense
a) prepaid rent
The owner's withdrawals account appears on a) the statement of owner's equity only b) the balance sheet only c) the income statement only d) both the income statement and the balance sheet
a) the statement of owner's equity only
Which of the following is a business event that is NOT considered a recordable transaction? a) a customer purchases a service b) a customer inquires about the availability of a service c) a company receives a product previously ordered d) a company pays an employee for work performed
b) a customer inquires about the availability of a service
When a magazine company receives an advance payment for a subscription, it a) debits prepaid subscriptions and credits cash b) debits cash and credits unearned subscriptions revenue c) debits unearned subscriptions revenue and credits cash d) debits cash and credits subscriptions revenue
b) debits cash and credits unearned subscriptions revenue
Which of the following accounts probably would need to be adjusted at year end? a) land b) supplies c) withdrawals d) notes payable
b) supplies
The matching rule relates the LEAST to a) cause and effect relationships b) the cash basis of accounting c) accrual accounting d) systematic and rational allocation
b) the cash basis accounting
When a service has been performed, but no cash has been received, which of the following statements is true? a) no journal entry would be made b) the entry would include a debit to accounts receivable c) the entry would include a credit to unearned revenue d) the entry would include a debit to accounts payable
b) the entry would include a debit to accounts receivable
Which of the following transactions is the MOST difficult to assign to specific-time periods? a) the expiration of insurance b) the use of equipment c) the accrual of interest d) the incurrence of wages
b) the use of equipment
If accounts payable has a debit postings of $8,500, credit posting of $7,000 and a normal ending balance of $3,000, what was its beginning balance? a) $4,500 Dr b) $1,500 Dr c) $4,500 Cr d) $1,500 Dr
c) $4,500 Cr
When a company has performed a service but has not yet received payment, it a) debits revenue from services and credits accounts payable b) makes no entry until the cash is received c) debits accounts receivable and credits revenue from services d) debits revenue from services and credits accounts receivable
c) debits accounts receivable and credits revenue from services
Which of the following pairs of accounts could NOT be included in the same adjusting entry? a) rent expense and rent payable b) wages expense and wages payable c) interest expense and interest receivable d) unearned revenue and revenue from services
c) interest expense and interest receivable
Which of the following accounts could NOT be credited in an adjusting entry? a) earned revenue b) office supplies c) interest receivable d) prepaid rent
c) interest receivable
The unearned art fees account is classified as a(n) a) asset b) revenue c) liability d) expense
c) liability
Failure to adjust for accrued wages at the end of the period will result in an a) understatement of net income for the period b) overstatement of assets c) overstatement of net income for the period d) overstatement of liabilities
c) overstatement of net income for the period
Which of the following transactions results in an increase in revenues? a) collection of cash on account b) sale of land at cost for cash c) sale of a service on credit d) receipt of cash from bank loan
c) sale of a service on credit
The adjustment for that portion of revenue received in advance which has now been earned is to debit a) service revenue and credit unearned revenue b) cash and credit unearned revenue c) unearned revenue and credit service revenue d) unearned revenue and credit cash
c) unearned revenue and credit service revenue
In accounting, depreciation refers to the a) wearing away of an asset b) obsolescence of an asset c) decline in value of an asset d) allocation of asset cost
d) allocation of asset cost
The Art Supplies Account is classified as a(n) a) owner's equity account b) liability, if the supplies have not yet been paid for c) expense d) asset
d) asset
An adjusting entry would NOT include which of the following accounts? a) property taxes payable b) interest receivable c) unearned revenue d) cash
d) cash
Which of the following events does NOT result in the recording of an expense a) purchase of gasoline for fill-up of a company car b) receipt of a bill from the telephone company c) payment of wages d) owner withdrawal of cash
d) owner withdrawal of cash
Which of the following transactions decreases both assets and owner's equity? a) advance payment made for insurance b) payment of liability c) receipt of a phone bill, to be paid at a later time d) owner withdrawal of cash
d) owner withdrawal of cash
Which of the following transactions increases both assets and owner's equity? a) payment received from a credit customer b) received a bank loan c) owner withdrawal of cash d) rendered a service. payment not yet received
d) rendered a service, payment not yet received
