UNT ACCT 2010 Final Review

Accounts Payable had a normal beginning balance of $1600. During the period, there were debit postings of $900 and credit postings of $400. What was the ending balance?

$1600 ($900) $400 = Debit $1,100

Revenues = $300,000 Expenses = $95,000 Dividends = $9,000 Find stockholders' equity

$300,000 ($95,000) ($9,000) =$196,000

If you purchase a building for $530,000, under the historical cost principal, you should record the building for:

$530,000

If a bookkeeper mistakenly recorded a $89 deposit as $98, the error would be shown on the bank reconciliation as

$9 deduction from the book balance

Stripes Ltd. received a four month 7% $15,000 note receivable on March 1. The adjusting entry on March 31st will include

A credit to interest revenue for $87.50

In a double-entry accounting system,

A debit entry is recored on the left side of a T-account

Each of the following is an example of a control procedure, except

A sound marketing plan

Which statement is false?

A trail balance is the same as a balance sheet

The basic summary device of accounting is the

Account

All of the following are current assets except

Accounts payable

An adjusting entry that debits an expense and credits a liability is which type?

Accrued expense

Which of the following accounts is not closed?

Accumulated depreciation

A $600 deposit made on the last day of the current month did not appear on this month's bank statement

Add to the bank balance

Which statement is false?

Adjusting entries are required for a business that uses the cash basis

The nature of an asset is best described as

An economic resource that's expected to benefit future operations

The accounting equation can be expressed as

Assets - Liabilities = Owners' equity

The accountant for Trumbull Corp. failed to make the adjusting entry to record depreciation for the current year. The effect of this error is which of the following?

Assets, net income, and stockholders' equity are all overstated.

The amount a company expects to collect from customers appears on the

Balance sheet in the current assets section

NET INCOME appears on which financial statement?

Balance sheet, and income statement

Which of the following transactions will increase an asset and increase a liability?

Buying equipment on account

Which accounts appear on which financial statement?

Cash, receivables, payables - Revenues, expenses

Interest earned on a note receivable at December31 equals $375. What adjusting entry is required to accrue this interest?

Debit Interest receivable (375), Credit Interest Revenue (375)

On September 1, Valley Apartments received $4400 from a tenant for four months' rent. The receipt was credited to Unearned Rent Revenue. Valley's year end is December 31, which is when it makes its adjusting entries for the year. What adjusting needs to be made by Valley on December 31?

Debit Unearned Rent Revenue (4400), Credit Rent Revenue (4400)

The journal entry to record a payment on account will

Debit accounts payable and credit cash

An attorney performs service of $1,100 for a client and receives $400 cash with the remainder on account. The journal entry for this transaction would

Debit cash, debit Accounts Receivable, and credit service revenue

Computer, inc., purchased supplies for $700 during 2016. At yeardash-end, Computer had $600 of supplies left. The adjusting entry should be

Debit supplies expense $100

A doctor purchases medical supplies of $640 and pays $290 cash with the remainder on account. The journal entry for this transaction would be which of the following?

Debit supplies, credit accounts payable and cash

The journal entry to record the receipt of land and a building and the issuance of common stock

Debits land and building and credits common stock

The journal entry to record the purchase of supplies on account

Debits supplies and credits accounts payable

Jasmine's adjusting entry at the end of February included a debit to Rent Expense in the amount of $100. What effect does the adjusting entry have on Jasmine's net income for February?

Decrease by $100

A check was written for $485 to purchase supplies. The check was recorded in the journal as $458. The entry to correct this error would

Decrease cash, $27 Increase supplies, $27

What is the effect on total assets and stockholders' equity of paying the telephone bill as soon as it is received each month?

Decrease total assets, and decrease stockholder's equity

In a bank reconciliation, an EFT cash payment is

Deducted from the book balance

Which of the following reconciling items does not require a journal entry?

Deposit in transit

Which statement is false?

Dividends are increased by credits

To find book value:

Equipment - Accumulated depreciation

Which of the following is the most accurate statement regarding ethics as applied to decision making in accounting?

Ethics involves making difficult choices under pressure and should be kept in mind in making every decision, including those involving accounting.

Which account types normally have a debit balance?

Expenses

Who created Financial accounting standards?

FASB

What does GAAP mean?

Generally Accepted Accounting Principles

Receiving cash from a customer on account will

Have no effect on total assets

Purchasing computer equipment for cash will

Have no effect on total assets, total liabilities, or stockholder's equity

Assets are usually reported at their

Historical cost

UPS earns service revenue of $650,000. How does this transaction affect UPS's current and debt ratios?

Improves both ratios

Suppose Frederick Corporation borrows $20 million on a 10-year note payable. How does this transaction affect Frederick's current ratio and debt ratio?

Improves the current ratio and hurts the debt ratio

Using the accrual basis, in which month should revenue be recorded?

In the month that goods are SHIPPED to the customer.

Sarah is interviewing next week for a job at Rainbow Inks Corporation. Which financial statement should she examine to evaluate how well Rainbow Inks Corporation performed last year?

Income Statement

The financial statement that reports revenues and expenses is called the

Income statement

Purchasing a building for $95,000 by paying cash of $20,000 and signing a note payable of $75,000 will

Increase both total assets and total liabilities by $75,000

An investment of cash by stockholders into the business will

Increase stockholder's equity

Performing a service on account will

Increase stockholders' equity and increase total assets

A check was written for $295 to purchase supplies. The check was recorded in the journal as $259. The entry to correct this error would

Increase supplies $36, Decrease cash $36

Purchasing a laptop computer ON ACCOUNT will

Increase total assets, Increase total liabilities, and have no effect on stockholder's equity

A debit entry to an account

Increases assets

Cash paid to purchase a building apperas on the statement of cash flows among the

Investing activities

Where do we first record a transaction?

Journal

Which is the correct sequence for recording transactions and preparing financial statements?

Journal, ledger, trial balance, financial statements

If the credit to record the purchase of supplies on account is not posted

Liabilities will be understated

The account Unearned Revenue is a

Liability

What is the effect on the financial statements of recording depreciation on equipment?

Net income, assets, and stockholder's equity are all decreased

Which of the following is not an asset account?

None of the listed accounts are assets.

Which items are reported on the balance sheet?

Retained earnings, inventory, accounts payable

All of the following are internal control procedures except

Sarbanes-Oxley reforms

Requiring that an employee with no access to cash do the accounting is an example of which characteristic of internal control?

Separation of duties

On a trial balance, which of the following would indicate that an error has been made?

Service revenue has a debit balance

Another name for the balance sheet is the

Statement of financial position

Which of the following is an example of poor internal control?

The mailroom clerk records daily cash receipts in the journal

Which of the following is a true statement about International Financial Reporting Standards

They are converging gradually with U.S. standards

All of the following are objectives of internal control except

To maximize net income

The list of all accounts with their balances is the

Trial Balance

A major purpose of preparing closing entries is to

Update the retained earnings account