Final 4

QN=252 Cooley company has the balance in the accounts payable at the beginning of March was $1,000. During the month of March, Cooley company purchased from Dell company on account totaling $2,000. Also during this month, Cooley company paid $500 on its accounts payable for Dell company. In addition, Cooley company was paid $8,000 by a customer for services to be provided in the future. What is the balance in accounts payable at the end of March? a. $2,500. b. $10,500. c. $8,000 d. $12,500 e. $2,000

a. $2,500.

QN=256 Office supplies available at the beginning of the year are 0. During the year, the company purchased $3000 of office supplies. On December 31, $1000 of office supplies remained. Additional company's insurance expense is $ 1000. How much should the company report as office supplies expense for the year? a. $2000 b. $3000 c. $1000 d. $4000 e. $5000

a. $2000

QN=264 The operating functions of a business exclude: a. Borrowing. b. Purchasing. c. Marketing. d. Distribution. e. All of these.

a. Borrowing.

QN=284 Provide descriptions for this transaction: Debit inventory $8,000 and credit cash $,8000 a. Buying inventory by cash $8,000 b. Buying inventory on credit $8,000 c. Arrange inventory contract on credit $8,000 d. Arrange inventory contract by cash $8,000 e. None of these

a. Buying inventory by cash $8,000

QN=295 Inventory accounts should be classified in which section of a balance sheet? a. Current assets b. Investments c. Intangible assets d. Tangible assets e. Non-current assets

a. Current assets

QN=244 Selling products for cash $300 and $700 on credit. Show the general journal entry to record this transaction. a. Debit Cash $ 300 Debit Account Receivable $700 Credit Revenue $1,000 b. Debit Cash $300 Debit Account Payable $700 Credit Revenue $1,000 c. Debit Account Receivable $700 Credit Unearned Revenue $700 d. Debit Unearned Revenue $700 Credit Account Receivable $700 e. Debit Cash $ 700 Credit Revenue $700

a. Debit Cash $ 300 Debit Account Receivable $700 Credit Revenue $1,000

QN=260 The summary amounts below appear in the Income Statement and Balance Sheet columns of a company's December 31 work sheet. Prepare the necessary closing entries into INCOME SUMMARY Asset : $15,000 Liability: $14,000 Revenue: $ 10,000 Withdrawal: $1,000 a. Debit Revenue: $10,000 Credit Income summary: $10,000 b. Debit Income summary: $10,000 Credit Revenue: $10,000 c. Debit owner capital: $10,000 Credit Revenue: $10,000 d. Debit owner capital: $1,000 Credit Withdrawal: $1,000 e. Debit Withdrawal: $1,000 Credit owner capital: $1,000

a. Debit Revenue: $10,000 Credit Income summary: $10,000

QN=279 Provide descriptions for this transaction: Increase cash $1,000 and Increase equity $,1000 a. Investment of cash in business by owner or performed services for cash b. Investment of cash in business by owner c. Performed services for cash d. Collected cash from customers e. None of these

a. Investment of cash in business by owner or performed services for cash

QN=266 The rule that financial statements will be prepared with the assumption that the business will continue operating instead of being closed or sold, is the: a. On - Going-concern principle. b. Accrual basic principle. c. Matching principle. d. Cost Principle. e. Consistency principle.

a. On - Going-concern principle.

QN=287 Provide descriptions for this transaction: Debit Cash $8,000 and credit Unearned revenue $,8000 a. Received payment in advance from customers by cash $8,000 b. Paid in advance for supplies by cash $8,000 c. Adjusting expense at the end of period $8,000 d. Adjusting unearned revenue at the end of period $8,000 e. None of these

a. Received payment in advance from customers by cash $8,000

QN=277 A company might provide a service or product on credit. "On credit" implies that the cash payment will occur: a. on a later date b. on selling day c. on previous day d. No due date e. No ability to collect

a. on a later date

QN=257 The company has no office supplies available at the beginning of the year. During the year, the company purchased $500 of office supplies on credit. On December 31, there is $100 of office supplies remained. How much should the company report for the year as office supplies expense? a. $600 b. $400 c. $100 d. $300 e. $500

b. $400

QN=251 At the beginning of January of the current year, a Law company has a normal balance of $50,000 for accounts receivable. During January, the company collected $14,000 from customers and provided additional services to customers on account totaling $12,000. Additional, company used service of $ 1,000 on credit. At the end of January, the balance in the accounts receivable account should be: a. $49,000. b. $48,000. c. $36,000 d. $26,000 e. $76,000

b. $48,000.

QN=271 If assets are $199,000 and liabilities are $132,000, then equity equals a. $32,000. b. $67,000. c. $99,000. d. $131,000. e. $198,000.

b. $67,000.

QN=253 On June 30, 2009, Apricot Co. paid $7,500 cash for a service that will be performed during two-year period. On June 30, 2009 Apricot should record: a. A credit to an expense for $7,500 and debit cash $ 7,500 b. A debit to a prepaid expense for $7,500 and credit cash $ 7,500 c. A debit to a prepaid expense for $7,500 and credit account payable $ 7,500 d. A credit to a prepaid expense for $7,500 and debit cash $ 7,500 e. A debit to expense for $7,500 and credit cash $ 7,500

b. A debit to a prepaid expense for $7,500 and credit cash $ 7,500

QN=273 Assets created by selling goods and services on credit are: a. Accounts payable. b. Accounts receivable. c. Liabilities. d. Expenses. e. Equity.

b. Accounts receivable.

QN=285 Provide descriptions for this transaction: Debit insurance expense $8,000 and credit Insurance - prepaid expense $,8000 a. Paid insurance fee by cash $8,000 b. Adjusting prepaid expense at the end of period $8,000 c. Arrange insurance contract on credit $8,000 d. Arrange inventory contract by cash $8,000 e. None of these

b. Adjusting prepaid expense at the end of period $8,000

QN=274 Photometer Company paid off $30,000 of its accounts payable in cash. What would be the effects of this transaction on the accounting equation? a. Assets, $30,000 increase; liabilities, no effect; equity, $30,000 increase. b. Assets, $30,000 decrease; liabilities, $30,000 decrease; equity, no effect. c. Assets, $30,000 decrease; liabilities, $30,000 increase; equity, no effect. d. Assets, no effect; liabilities, $30,000 decrease; equity, $30,000 increase. e. Assets, $30,000 decrease; liabilities, no effect; equity $30,000 decrease.

b. Assets, $30,000 decrease; liabilities, $30,000 decrease; equity, no effect.

QN=282 Provide descriptions for this transaction: Debit inventory $8,000 and credit liability $,8000 a. Buying inventory by cash $8,000 b. Buying inventory on credit $8,000 c. Arrange inventory contract on credit $8,000 d. Arrange inventory contract by cash $8,000 e. None of these

b. Buying inventory on credit $8,000

QN=283 Provide descriptions for this transaction: Debit inventory $8,000 and credit liability $,8000 a. Buying inventory by cash $8,000 b. Buying inventory on credit $8,000 c. Arrange inventory contract on credit $8,000 d. Arrange inventory contract by cash $8,000 e. None of these

b. Buying inventory on credit $8,000

QN=280 Provide descriptions for this transaction: Debit office supplies $2,000 and credit liability $,2000 a. Buying office supplies by cash $2,000 b. Buying office supplies on credit $2,000 c. Arrange office supplies contract on credit $2,000 d. Arrange office supplies contract by cash $2,000 e. None of these

b. Buying office supplies on credit $2,000

QN=281 Provide descriptions for this transaction: Debit office supplies $8,000 and credit liability $,8000 a. Buying office supplies by cash $8,000 b. Buying office supplies on credit $8,000 c. Arrange office supplies contract on credit $8,000 d. Arrange office supplies contract by cash $8,000 e. None of these

b. Buying office supplies on credit $8,000

QN=267 The accounting principle that requires accounting information to be based on actual cost instead of current value, is the: a. Accounting equation. b. Cost principle. c. On - Going-concern principle. d. Accrual principle. e. Consistency principle.

b. Cost principle.

QN=262 The summary amounts below appear in the Income Statement and Balance Sheet columns of a company's December 31 work sheet. Prepare the necessary closing entries into INCOME SUMMARY Asset : $15,000 Liability: $14,000 Expense: $ 8,000 Withdrawal: $1,000 a. Debit Expense: $8,000 Credit Income summary: $8,000 b. Credit Expense: $8,000 Debit Income summary: $8,000 c. Credit withdrawal: $1,000 Debit Income summary: $1,000 d. Credit Asset: $15,000 Debit Income summary: $15,000 e. Debit owner capital: $1,000 Credit Withdrawal: $1,000

b. Credit Expense: $8,000 Debit Income summary: $8,000

QN=241 Invested $10,000 cash, and $15,000 of computer equipment. Prepare journal entries to record the above transactions a. Debit Cash $ 25,000 Credit Capital $25,000 b. Debit Cash $ 10,000 Debit Equipment $ 15,000 Credit Capital $25,000 c. Credit Cash $ 10,000 Credit Equipment $ 15,000 Debit Capital $25,000 d. Credit Cash $ 25,000 Debit Capital $25,000 e. Debit Cash $ 10,000 Credit Capital $10,000

b. Debit Cash $ 10,000 Debit Equipment $ 15,000 Credit Capital $25,000

QN=290 Adjusting depreciation expense of fixed asset at $8,000. Recording this transaction: a. Debit depreciation $8,000 and credit accumulated depreciation expense $,8000 b. Debit depreciation expense $8,000 and credit accumulated depreciation expense $,8000 c. Debit depreciation expense $8,000 and credit fixed asset $,8000 d. Debit depreciation expense $8,000 and credit accumulated asset $,8000 e. None of these

b. Debit depreciation expense $8,000 and credit accumulated depreciation expense $,8000

QN=245 The account used to record the transfers of assets from a business to its owner (personal use) is: a. A revenue account. b. The owner's withdrawals account. c. The owner's capital account. d. An expense account. e. A liability account.

b. The owner's withdrawals account.

QN=272 A cash outflow from the company into its owner is called a(n): a. Liability. b. Withdrawal. c. Expense. d. Profit. e. Investment.

b. Withdrawal.

QN=278 A company might buy a service or product on credit. "On credit" implies that the cash payment will occur: a. On buying day b. on a later date c. on previous day d. No due date e. No obligation to pay

b. on a later date

QN=255 Office supplies available at the beginning of the year are 0. During the year, the company purchased $250 of office supplies. On December 31, $90 of office supplies remained. How much should the company report as office supplies expense for the year? a. $75. b. $125. c. $160 d. $250. e. $325.

c. $160

QN=254 A company had no office supplies available at the beginning of the year. During the year, the company purchased $250 of office supplies. On December 31, $75 of office supplies remained. How much should the company report as office supplies expense for the year? a. $75. b. $125. c. $175. d. $250. e. $325.

c. $175.

QN= 249 The business completed these transactions: 1. Investing $20,000 cash and a building valued at $100,000. 2. Purchased $10,000 of a truck on credit. 3. Paid $20,000 cash for raw material. 4. Selling products and collected$40,000 cash. What was the balance of the cash account after these transactions were posted? a. $130,000 b. $30,000 c. $40,000 d. $140,000 e. $120,000

c. $40,000

QN=300 Realistic Company purchased a new truck on January 1, 20X1. The truck cost $20,000, has a four-year life, and a $4,000 residual value. The company has a December 31 year-end. If Realistic Company depreciates the truck by the straight-line method, how much should Realistic report as the book value of the truck at the end of 20X3? a. $1,600 b. $4,000 c. $8,000 d. $16,000 e. $15,000

c. $8,000

QN=296 Hefty Company wants to know the effect of different inventory methods on financial statements. Given below is information about beginning inventory and purchases for the current year. January 2 Beginning Inventory: 500 units at $3.00 April 7 Purchased : 1,100 units at $3.20 June 30 Purchased : 400 units at $4.00 December 7 Purchased : 1,600 units at $4.40 Sales during the year were 2,700 units at $5.00. If Hefty used the periodic LIFO method, cost of goods sold would be: a. $2,780 b. $3,960 c. $9,700 d. $10,880 e. $10,000

c. $9,700

QN=297 Of the following account types, which would be increased by a debit? a. Liabilities and expenses. b. Assets and equity. c. Assets and expenses. d. Equity and revenues. e. None of these

c. Assets and expenses.

QN=298 The proper journal entry to record Ransom Company's billing of clients for $500 of services rendered is: a. Dr. Cash 500 Cr. Accounts Receivable 500 b. Dr. Accounts Receivable 500 Cr. capital Stock 500 c. Dr. Accounts Receivable 500 Cr. Service Revenue 500 d. Dr. Cash 500 Cr. Service Revenue 500 e. None of these

c. Dr. Accounts Receivable 500 Cr. Service Revenue 500

QN=292 Branz Company had credit sales during the current year which amounted to $700,000. Historically, 3% of credit sales are uncollectible. If Branz uses the allowance method of recording uncollectible accounts, a proper journal entry for the year would be: a. Dr. Accounts Receivable 21,000 Cr. Allow. for Uncollectible Accounts 21,000 b. Dr. Uncollectible Accounts Expense 21,000 Cr. Accounts Receivable 21,000 c. Dr. Uncollectible Accounts Expense 21,000 Cr. Allow. for Uncollectible Accounts 21,000 d. Dr. Allow. for Uncollectible Accounts 21,000 Cr. Accounts Receivable 21,000 e. None of these

c. Dr. Uncollectible Accounts Expense 21,000 Cr. Allow. for Uncollectible Accounts 21,000

QN=291 Taylor Company uses the direct write-off method of recording uncollectible accounts receivable. Recently, a customer informed Taylor that he would be unable to pay $300 owed to Taylor. Taylor's proper journal entry to reflect this event would be: a. Dr. Uncollectible Accounts Expense 300 Cr. Allowance. for Uncollectible Accounts 300 b. Dr. Allowance. for Uncollectible Accounts 300 Cr. Accounts Receivable 300 c. Dr. Uncollectible Accounts Expense 300 Cr. Accounts Receivable 300 d. Dr. revenue 300 Cr. Accounts Receivable 300 e. None of these

c. Dr. Uncollectible Accounts Expense 300 Cr. Accounts Receivable 300

QN=268 The difference between a company's assets and its liabilities is: a. Net income. b. Expense. c. Equity. d. Revenue. e. Net loss.

c. Equity.

QN=275 How does Lead Company record by the billing of a client for $15,000 of service completed? a. +$15,000 accounts receivable, -$15,000 accounts payable. b. +$15,000 accounts receivable, +$15,000 accounts payable. c. +$15,000 accounts receivable, +$15,000 cash. d. +$15,000 accounts receivable, +$15,000 revenue. e. +$15,000 accounts receivable, -$15,000 revenue.

d. +$15,000 accounts receivable, +$15,000 revenue.

QN=276 Moffat Company has assets of $600,000, liabilities of $250,000, and equity of $350,000. What is the entry need to record when Moffat Company bill of a client for $25,000 of contract completed? a. +$25,000 accounts receivable, -$25,000 accounts payable. b. +$25,000 accounts receivable, +$25,000 accounts payable. c. +$25,000 accounts receivable, +$25,000 cash. d. +$25,000 accounts receivable, +$25,000 revenue. e. +$25,000 accounts receivable, -$25,000 revenue.

d. +$25,000 accounts receivable, +$25,000 revenue.

QN=286 Provide descriptions for this transaction: Debit Cash $8,000 and credit Unearned revenue $,8000 a. Received payment in advance from customers by cash $8,000 b. Paid in advance for supplies by cash $8,000 c. Adjusting revenue at the end of period $8,000 d. Adjusting unearned revenue at the end of period $8,000 e. None of these

d. Adjusting unearned revenue at the end of period $8,000

QN=288 Provide descriptions for this transaction: Debit unearned revenue $8,000 and credit revenue $,8000 a. Received payment in advance from customers $8,000 b. Paid in advance for supplies by cash $8,000 c. Adjusting expense at the end of period $8,000 d. Adjusting unearned revenue at the end of period $8,000 e. None of these

d. Adjusting unearned revenue at the end of period $8,000

QN=289 Provide descriptions for this transaction: Debit unearned revenue $8,000 and credit revenue $8,000 a. Received payment in advance from customers $8,000 b. Paid in advance for supplies by cash $8,000 c. Adjusting expense at the end of period $8,000 d. Adjusting unearned revenue at the end of period $8,000 e. None of these

d. Adjusting unearned revenue at the end of period $8,000

QN=270 Which is true about Revenues: a. The same as net income. b. The excess of expenses over assets. c. Resources owned or controlled by a company. d. Company's earning activities that contribute to increase owner's equity . e. The costs of assets or services used.

d. Company's earning activities that contribute to increase owner's equity .

QN=263 The summary amounts below appear in the Income Statement and Balance Sheet columns of a company's December 31 work sheet. Prepare the necessary closing entries into OWNER CAPITAL Asset : $15,000 Liability: $14,000 Withdrawal: $1,000 a. Debit Withdrawal: $1,000 Credit Owner Capital: $1,000 b. Debit expense: $1,000 Credit Owner Capital: $1,000 c. Debit Owner Capital: $1,000 Credit expense: $1,000 d. Debit Owner Capital: $1,000 Credit Withdrawal: $1,000 e. Debit income summary: $1,000 Credit Withdrawal: $1,000

d. Debit Owner Capital: $1,000 Credit Withdrawal: $1,000

QN=243 Textron Stores purchased a van that cost $35,000. The firm made a payment of $5,000 cash and the balance on credit. Show the general journal entry to record this transaction. a. Debit Cash $5,000 Debit Account payable $30,000 Credit Van $35,000 b. Debit Cash $5,000 Debit Account payable $30,000 Credit van $ 35,000 c. Debit Van $ 5,000 Credit Cash $5,000 d. Debit Van $35,000 Credit Cash $5,000 Credit Account payable $30,000 e. Debit Van $30,000 Credit Account payable $30,000

d. Debit Van $35,000 Credit Cash $5,000 Credit Account payable $30,000

QN=246 If Jones, the owner of Hardware company, uses cash of the business to purchase a family car, the business should record this use of cash with an entry to: a. Debit Expense and credit Cash. b. Credit Expense and Debit Cash. c. Debit Cash and credit Withdrawals. d. Debit Withdrawals and credit Cash. e. Debit car and credit Cash.

d. Debit Withdrawals and credit Cash.

QN=247 If Smith, the owner of a restaurant, uses cash of the business to pay for renting his house, the business should record this use of cash with an entry to: a. Debit Expense and credit Cash. b. Credit Expense and Debit Cash. c. Debit Cash and credit Withdrawals. d. Debit Withdrawals and credit Cash. e. Debit car and credit Cash.

d. Debit Withdrawals and credit Cash.

QN=293 Flynn Company uses an allowance method for recording uncollectible. At the due date of that account receivable, Flynn determined that $4,000 due from Mitchell will not be collected and should be write off. The entry Flynn should record to write off the Mitchell account is: a. Dr. Uncollectible Accounts Expense 4,000 Cr. Accounts Receivable 4,000 b. Dr. revenue 4,000 Cr. Accounts Receivable 4,000 c. Dr. Uncollectible Accounts Expense 4,000 Cr. Allow. for Uncollectible Accounts 4,000 d. Dr. Allow. for Uncollectible Accounts 4,000 Cr. Accounts Receivable 4,000 e. None of these

d. Dr. Allow. for Uncollectible Accounts 4,000 Cr. Accounts Receivable 4,000

QN=299 The trial balance: a. Is a formal financial statement. b. Is used to prove that there are no errors in the journal or ledger. c. Provides a listing of every account in the chart of accounts. d. Provides a listing of the balance of each ledger account. e. None of these

d. Provides a listing of the balance of each ledger account.

QN=258 Which statement is true about revenue: a. Revenue is reported in the financial statements as a liability on the balance sheet. b. Revenue is reported in the financial statements as an asset on the balance sheet. c. Revenue is reported in the financial statements as an owner's equity on the balance sheet. d. Revenue is reported in the financial statements on the income statement. e. Revenue is reported in the financial statements on the cash flow statement.

d. Revenue is reported in the financial statements on the income statement.

QN=250 John set up a new business and completed these transactions: 1. Open new restaurant, by investing $30,000 cash and equipment valued at $10,000. 2. Purchased $1,000 of kitchen utility on credit. 3. Paid $1,500 cash for the staff's salary. 4. Service meals to customers and collected$4,000 cash What was the balance of the cash account after these transactions were posted? a. $46,500 b. $42,500 c. $45,500 d. $31,500 e. $32,500

e. $32,500

QN= 265 External users of accounting information exclude: a. Shareholders. b. Manager. c. Creditors. d. Government regulators. e. All of these.

e. All of these.

QN=259 Selling 1,000 products for a customer and collected $2,000 cash. Recording this transaction: a. Debit Cash $ 1,000 and credit Revenue $1,000 b. Credit Cash $ 2,000 and Debit Revenue $2,000 c. Debit Cash $2,000 and Unearned Revenue $2,000 d. Credit Cash $ 2,000 and Debit Unearned Revenue $2,000 e. Debit Cash $ 2,000 and credit Revenue $2,000

e. Debit Cash $ 2,000 and credit Revenue $2,000

QN=261 The summary amounts below appear in the Income Statement and Balance Sheet columns of a company's December 31 work sheet. Prepare the necessary closing entries into INCOME SUMMARY Asset : $10,000 Revenue: $ 15,000 Unearned revenue: $1,000 a. Debit unearned Revenue: $1,000 Credit Income summary: $1,000 b. Credit unearned Revenue: $1,000 Debit Income summary: $1,000 c. Credit Revenue: $15,000 Debit Income summary: $15,000 d. Debit owner capital: $10,000 Credit Withdrawal: $10,000 e. Debit Revenue: $15,000 Credit Income summary: $15,000

e. Debit Revenue: $15,000 Credit Income summary: $15,000

QN=248 If Hussan, the owner of Hardware company, uses cash of the business to purchase a motorcycle for his travelling, the business should record this use of cash with an entry to: a. Debit Expense and credit Cash. b. Credit Expense and Debit Cash. c. Debit Cash and credit Withdrawals. d. Debit Motorcycle and credit Cash. e. Debit Withdrawals and credit Cash.

e. Debit Withdrawals and credit Cash.

QN=242 On June 1, paid $200 cash for office supplies. Prepare journal entries to record the above transactions on June 1. a. Debit Cash $ 200 Credit office supplies $200 b. Debit office supplies expense $200 Credit Cash $ 200 c. Debit Cash $ 200 Credit office supplies expense $200 d. Debit equipment $200 Credit Cash $ 200 e. Debit office supplies $200 Credit Cash $ 200

e. Debit office supplies $200 Credit Cash $ 200

QN=269 Which is true about Expenses: a. The same as net income. b. The excess of expenses over assets. c. Resources owned or controlled by a company. d. Company's earning activities that contribute to increase owner's equity. e. The costs of assets or services used to generate revenue.

e. The costs of assets or services used to generate revenue.