ACC101 Final

a

QN=68 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.

d

QN=72 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.

c

QN=79 Which is true about An account balance: a. Always a debit.

a. Going

Concern Assumption b. Business Entity Assumption c. Time Period Assumption d. Matching Principle e. Cost Principle

a

QN= 45 If the assets of a business increased $89,000 during a period of time and its liabilities increased $67,000 during the same period, equity in the business must have: a. Increased $22,000. b. Decreased $22,000. c. Increased $89,000. d. Decreased $156,000. e. Increased $156,000.

b

QN= 47 The following transactions occurred during July: 1. Received $900 cash for services provided to a customer during July. 2. Received $2,200 cash investment from Barbara Hanson, the owner of the business. 3. Received $750 from a customer in partial payment of his account receivable which arose from sales in June. 4. Provided services to a customer on credit, $375. 5. Borrowed $6,000 from the bank by signing a promissory note. 6. Received $1,250 cash from a customer for services to be rendered next year. What was the amount of revenue for July? a. $ 900. b. $ 1,275. c. $ 2,525. d. $ 3,275. e. $11,100.

b

QN= 67 External users of accounting information exclude: a. Shareholders. b. Manager. c. Creditors. d. Government regulators. e. All of these.

b

QN=1 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

QN=10 Provide descriptions for this transaction: Increase cash $4,000 and Increase CONTRIBUTED CAPITAL $4000 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

b

QN=11 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

a

QN=12 Provide descriptions for this transaction: Decrease cash $3500 and Decrease equity $3500 a. Withdraw cash from the business by owner or paid cash for an expense b. Withdraw cash from the business by owner c. paid cash for an expense d. Collected cash from customers e. None of these

b

QN=13 Items used in business operations, such as office pens and paper are several samples of: a. Office expense b. Office supplies c. Office equipment d. Prepayment e. None of these

c

QN=14 The difference between a company's assets and its liabilities, or net assets is: a. Net income. b. Expense.

a

QN=15 Resources owned or controlled by a company that are expected to yield future benefits are: a. Assets. b. Revenues. c. Liabilities. d. Owner's Equity. e. Expenses.

e

QN=16 Zion Company has assets of $600,000, liabilities of $250,000, and equity of $350,000. It buys office equipment on credit for $75,000. What would be the effects of this transaction on the accounting equation? a. Assets increase by $75,000 and expenses increase by $75,000. b. Assets increase by $75,000 and expenses decrease by $75,000. c. Liabilities increase by $75,000 and expenses decrease by $75,000. d. Assets decrease by $75,000 and expenses decrease by $75,000. e. Assets increase by $75,000 and liabilities increase by $75,000.

b

QN=17 Internal users of accounting information include: a. Shareholders. b. Managers. c. Lenders. d. Suppliers. e. Customers.

a

QN=18 A chart of accounts generally starts with which of the following types of accounts? a. Asset accounts b. Liability accounts c. Expense accounts d. Equity accounts e. Revenue accounts

b

QN=19 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=2 A cash outflow from the company into its owner is called a(n): a. Liability. b. Withdrawal. c. Expense. d. Profit. e. Investment.

c

QN=20 If a company paid $38,000 of its accounts payable in cash, what was the effect on the assets, liabilities, and equity? a. Assets would decrease $38,000, liabilities would decrease $38,000, and equity would decrease $38,000. b. Assets would decrease $38,000, liabilities would decrease $38,000, and equity would increase $38,000. c. Assets would decrease $38,000, liabilities would decrease $38,000, and equity would not change. d. There would be no effect on the accounts because the accounts are affected by the same amount. e. None of these.

b

QN=21 Assets created by selling goods and services on credit are: a. Accounts payable. b. Accounts receivable. c. Liabilities. d. Expenses e. Equity.

b

QN=22 A payment to an owner for personal use is called a(n): a. Liability. b. Withdrawal. c. Expense. d. Contribution. e. Investment.

c

QN=23 The properties used in operation activities of a business is called: a. Revenue b. Withdrawal c. Assets d. Expense e. Liabilities

a

QN=24 Which of the following is a liability? a. Note payable b. Note receivable c. Cash d. Inventory e. Expense

c

QN=25 Which of the following is not considered as subcategory of owner's Equity? a. Revenue b. Withdrawal c. Assets d. Expense e. Contributed capital

e

QN=26 Which of the following is not a liability? a. Account payable b. Note payable c. Short term loan d. Long term loan e. Short term investment

a

QN=27 Which of the following is not a category or element of the balance sheet? a. Expense b. Liabilities c. Assets d. Account payable e. Loan

b

QN=28 The account used to record the transfers of assets from a business to its owner 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.

a

QN=29 Reflects assumption that the business will continue operating instead of being closed or sold. It is about: a. Going-Concern Assumption b. Business Entity Assumption c. Time Period Assumption d. Revenue Recognition Principle e. Cost Principle

a

QN=3 Liability created by purchasing goods and services on credit are: a. Accounts payable. b. Accounts receivable. c. Liabilities. d. Expenses. e. Equity.

d

QN=30 A company must record its expenses incurred to generate the revenue reported at the same period. It is about: a. Going-Concern Assumption b. Business Entity Assumption c. Time Period Assumption d. Matching Principle e. Cost Principle

b

QN=31 Which is the assumption stating that A business is accounted for separately from other business entities, including its owner?

d

QN=32 Which are expected to be sold, collected or used within one year or the company's operating cycle? a. Non - Current assets b. Non - Current liabilities c. Current liabilities d. Current assets e. None of these

d

QN=33 Flash has beginning equity of $257,000, net income of $51,000, withdrawals of $40,000 and investments by owners of $6,000. Its ending equity is: a. $223,000. b. $240,000. c. $268,000. d. $274,000. e. $208,000.

e

QN=34 Which of the following statements is true about assets? a. They are economic resources owned or controlled by the business. b. They are expected to provide future benefits to the business. c. They appear on the balance sheet. d. Claims on them can be shared between creditors and owners. e. All of these.

d

QN=35 Net Income: a. Decreases equity. b. Represents the amount of assets owners put into a business. c. Equals assets minus liabilities. d. Is the excess of revenues over expenses. e. Represents owners' claims against assets.

d

QN=36 Decreases in equity that represent costs of assets or services used to earn revenues are called: a. Liabilities. b. Equity. c. Withdrawals. d. Expenses. e. Owner's Investment.

e

QN=37 Accounting is an information and measurement system that: a. Identifies business activities. b. Records business activities. c. Communicates business activities. d. Helps people make better decisions. e. All of these.

c

QN=38 Which of the following accounting principles would require that all goods and services purchased should be recorded at cost? a. Going-concern principle. b. Continuing-concern principle. c. Cost principle. d. Business entity principle. e. Consideration principle.

e

QN=39 External users of accounting information include: a. Shareholders. b. Customers. c. Creditors. d. Government regulators. e. All of these.

b

QN=4 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

QN=40 The description of the relation between a company's assets, liabilities, and equity, which is expressed as Assets = Liabilities + Equity, is known as the: a. Income statement equation. b. Accounting equation. c. Business equation. d. Net income. e. Trial balance.

c

QN=41 Another name for equity is: a. Net income. b. Expenses. c. Net asset. d. Revenue. e. Net loss.

d

QN=42 On June 30 of the current year, the assets and liabilities of Phoenix Phildell are as follows: Cash $20,500; Accounts Receivable, $7,250; Supplies, $650; Equipment, $12,000; Accounts Payable, $9,300. What is the amount of owner's equity as of July 1 of the current year? a. $8,300 b. $13,050 c. $20,500 d. $31,100 e. $40,400

a

QN=43 Accounts receivable refers: a. A promise from customer for service or product the company provided on credit b. A prepayment of future expense c. A prepayment of customer for service to be provided in future d. Money which is owed to a provider by the company e. Investment by owner

d

QN=44 Money which a company owes to vendors for products and services purchased on credit. This item appears on the company's balance sheet as a current liability.

a

QN=46 If the liabilities of a company increased $74,000 during a period of time and equity in the company decreased $19,000 during the same period, what was the effect on the assets? a. Assets would have increased $55,000. b. Assets would have decreased $55,000. c. Assets would have increased $19,000. d. Assets would have decreased $19,000. e. None of these.

e

QN=48 Creditors' claims on the assets of a company are called: a. Net losses. b. Expenses. c. Revenues. d. Equity. e. Liabilities.

a

QN=49 Distributions by a business to its owners are called: a. Withdrawals. b. Expenses. c. Assets. d. Retained earnings. e. Net Income.

d

QN=5 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

QN=50 How would the accounting equation of Boston Company be affected by the billing of a client for $10,000 of consulting work completed? a. +$10,000 accounts receivable, -$10,000 accounts payable. b. +$10,000 accounts receivable, +$10,000 accounts payable. c. +$10,000 accounts receivable, +$10,000 cash. d. +$10,000 accounts receivable, +$10,000 revenue. e. +$10,000 accounts receivable, -$10,000 revenue.

c

QN=51 Viscount Company collected $42,000 cash on its accounts receivable. The effects of this transaction as reflected in the accounting equation are: a. Total assets decrease and equity increases. b. Both total assets and total liabilities decrease. c. Total assets, total liabilities, and equity are unchanged. d. Both total assets and equity are unchanged and liabilities increase. e. Total assets increase and equity decreases.

b

QN=52 If assets are $365,000 and equity is $120,000, then liabilities are: a. $120,000. b. $245,000. c. $365,000. d. $485,000. e. $610,000.

d

QN=53 The financial statement that reports whether the business earned a profit and also lists the types and amounts of the revenues and expenses is called: a. A Balance sheet. b. A Statement of owner's equity. c. A Statement of cash flows. d. An Income statement. e. A Statement of financial position.

c

QN=54 A balance sheet lists: a. The types and amounts of the revenues and expenses of a business. b. Only the information about what happened to equity during a time period. c. The types and amounts of assets, liabilities, and equity of a business as of a specific date. d. The inflows and outflows of cash during the period. e. The assets and liabilities of a company but not the owner's equity.

a

QN=55 A condition in which a company's expenses exceed its revenues. What does that mean: a. A loss b. A gain c. A profit d. A net income e. A net sale

a

QN=56 Which is true about account receivable: a. Money which is owed to a company by a customer for products and services provided on credit. b. Money which is owed to a company by a customer for products and services provided. c. Money which is borrowed by a company for products and services bought on credit. d. Money which is borrowed by a company for products and services bought. e. None of these

a

QN=57 Which statement is true: a. Prepaid expense is considered an asset on the balance sheet b. Prepaid expense is considered a liability on the balance sheet c. Prepaid expense is considered an expense on the income statement d. Prepaid expense is considered a loss on the income statement e. None of these

b

QN=58 Which statement is true: a. Unearned revenue is considered an asset on the balance sheet b. Unearned revenue is considered a liability on the balance sheet c. Unearned revenue is considered an expense on the income statement d. Unearned revenue is considered a loss on the income statement e. None of these

c

QN=59 The assets of a company total $700,000; the liabilities, $200,000. What are the claims of the owners? a. $900,000. b. $700,000. c. $500,000. d. $200,000. e. It is impossible to determine unless the amount of this owners' investment is known.

d

QN=6 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.

b

QN=60 An account used to record the owner's investments in the business is called a(n): a. Withdrawals account. b. Contributed Capital account. c. Revenue account. d. Expense account. e. Liability account.

b

QN=62 Gross increases in equity from a company's earnings activities are: a. Assets. b. Revenues. c. Liabilities. d. Owner's Equity. e. Expenses.

b

QN=63 How many accounts does every business transaction affect at least? a. 1 b. 2 c. 3 d. 4 e. Infinite

b

QN=64 The accounting assumption that requires every business to be accounted for separately from other business entities, including its owner or owners is known as the: a. Objectivity principle. b. Business entity assumption. c. Going-concern assumption. d. Revenue recognition principle. e. Cost principle.

a

QN=65 The rule that requires financial statements to reflect the assumption that the business will continue operating instead of being closed or sold, unless evidence shows that it will not continue, is the: a. Going-concern principle. b. Business entity principle. c. Objectivity principle. d. Cost Principle. e. Monetary unit principle.

d

QN=66 Prepaid expenses are: a. Payments made for products and services that do not ever expire. b. Classified as liabilities on the balance sheet. c. Decreases in equity. d. Assets that represent prepayments of future expenses. e. Promises of payments by customers.

a

QN=69 The accounting principle that requires expense incurred to generate revenue to be recorded at the same period with that revenue is a. Matching principle b. Cost principle. c. On - Going-concern principle. d. Accrual principle. e. Consistency principle.

a

QN=7 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.

d

QN=70 The following transactions, among others, occurred during August. Which transaction represented an expense during August a. Purchased office supplies for $3000 cash b. Paid $3300 in settlement of a loan obtained three months earlier c. Paid $500 to a garage mechanic for automobile repair work performed in June d. Rent a space for office on account. The rental amount will be paid in the next 2 months. e. None of these

e

QN=71 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.

b

QN=73 Which type of information would be of most interest to creditors? a. Dividend declared b. Ability of the company to pay debts c. Last year's profit d. Current share price e. None of these

b

QN=74 What accounting principle requires credit sales revenue also included in the income statement? a. Cash basis b. Accrual basis c. Accounting period assumption d. Monetary unit assumption e. Historical cost principle

d

QN=75 Repayment of the loan for the bank $ 2,000 cash will be recorded in general journal as: a. Debit cash, credit Expense b. Credit cash , debit expense c. Debit cash, credit loan d. Credit cash, debit loan e. None of these

c

QN=76 The right side of a T-account is a(n): a. Debit. b. Increase. c. Credit. d. Decrease. e. Account balance.

d

QN=77 A liability account that reports amounts received in advance of providing goods or services. It is about: a. Prepaid expense b. Liability c. Revenue d. Unearned revenue e. None of these

a

QN=78 Which statement is true about Mary's capital: a. The owner's equity account that contains the amount invested in the sole proprietorship by Mary Smith plus the net income since the company began minus the draws made by Mary Smith since the company began. b. The owner's equity account that contains the amount invested in the sole proprietorship by Mary Smith minus the net income since the company began minus the draws made by Mary Smith since the company began. c. The owner's equity account that contains the amount invested in the sole proprietorship by Mary Smith plus the net income since the company began plus the draws made by Mary Smith since the company began. d. The owner's equity account that contains the amount invested in the sole proprietorship by Mary Smith plus the net income since the company began e. None of these

b

QN=8 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

d

QN=80 If Tim Jones, the owner of Jones Hardware proprietorship, uses cash of the business to purchase a family automobile, the business should record this use of cash with an entry to: a. Debit Salary Expense and credit Cash. b. Debit Tim Jones, Salary and credit Cash. c. Debit Cash and credit Tim Jones, Withdrawals. d. Debit Tim Jones, Withdrawals and credit Cash. e. Debit Automobiles and credit Cash.

c

QN=81 Zed Bennett opened an art gallery and as a dealer completed these transactions: 1. Started the gallery, Artery, by investing $40,000 cash and equipment valued at $18,000. 2. Purchased $70 of office supplies on credit. 3. Paid $1,200 cash for the receptionist's salary. 4. Sold a painting for an artist and collected a $4,500 cash commission on the sale. 5. Completed an art appraisal and billed the client $200. What was the balance of the cash account after these transactions were posted? a. $12,230. b. $12,430. c. $43,300. d. $43,430. e. $61,430.

a

QN=82 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=83 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=84 At the beginning of January of the current year, Thomas Law Center's ledger reflected a normal balance of $52,000 for accounts receivable. During January, the company collected $14,800 from customers on account and provided additional services to customers on account totaling $12,500. Additionally, during January one customer paid Thomas $5,000 for services to be provided in the future. At the end of January, the balance in the accounts receivable account should be: a. $54700 b. $49700 c. $47000 d. $64500 e. $42200

c

QN=85 Which of the following statements is correct? a. The left side of a T-account is the credit side.

c

QN=86 During the month of February, Hoffer Company had cash receipts of $7,500 and cash disbursements of $8,600. The February 28 cash balance was $1,800. What was the January 31 beginning cash balance? a. $700. b. $1,100. c. $2,900. d. $0. e. $4,300.

b

QN=87 On April 30, Holden Company had an Accounts Receivable balance of $18,000. During the month of May, total credits to Accounts Receivable were $52,000 from customer payments. The May 31 Accounts Receivable balance was $13,000. What was the amount of credit sales during May? a. $ 5,000. b. $47,000. c. $52,000. d. $57,000. e. $32,000.

b

QN=88 On September 30, the Cash account of Value Company had a normal balance of $5,000. During September, the account was debited for a total of $12,200 and credited for a total of $11,500. What was the balance in the Cash account at the beginning of September?

b

QN=89 An asset created by prepayment of an expense is: a. Recorded as a debit to an unearned revenue account. b. Recorded as a debit to a prepaid expense account. c. Recorded as a credit to an unearned revenue account. d. Recorded as a credit to a prepaid expense account. e. Not recorded in the accounting records until the earnings process is complete.

a

QN=9 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

QN=90 Which statement is true: a. Generally when an expense or withdraw is involved in a transaction, it will be debit b. Generally when an expense or withdraw is involved in a transaction, it will be credit c. Generally when an make loan or withdraw is involved in a transaction, it will be debit d. Generally when make loan or withdraw is involved in a transaction, it will be credit e. None of these

e

QN=91 A debit is used to record: a. A decrease in an asset account. b. A decrease in an expense account. c. An increase in a revenue account. d. An increase in the balance of an owner's capital account. e. An increase in the balance of the owner's withdrawals account.

b. Debits decrease asset and expense accounts, and increase liability, equity, and revenue accounts. c. The left side of a T

account is the debit side.