ACCTG 1

A chart of accounts usually starts with a. asset accounts. b. expense accounts. c. liability accounts. d. revenue accounts

A

A metal shop's employees work overtime to finish an order that is sold on March 28.The office sends a statement to the customer in early April and payment is received by mid-April. The overtime wages should be expensed in a. March. b. April. c. the period when the workers receive their checks. d. either in March or April depending on when the pay period ends

A

A number in the reference column in a general journal indicates a. that the entry has been posted to a particular account. b. the page number of the journal. c. the dollar amount of the transaction. d. the date of the transaction.

A

Prepaid expenses are a. paid and recorded in an asset account before they are used or consumed. b. paid and recorded in an asset account after they are used or consumed. c. incurred but not yet paid or recorded. d. incurred and already paid or recorded.

A

The usual ordering of accounts in the general ledger is a. assets, liabilities, owner's capital, drawings, revenues, and expenses. b. assets, liabilities, drawings, owner's capital, expenses, and revenues. c. liabilities, assets, owner's capital, revenues, expenses, and drawings. d. owner's capital, assets, liabilities, drawings, expenses, and revenues

A

In preparing closing entries a. each revenue account will be credited. b. each expense account will be credited. c. the owner's capital account will be debited if there is net income for the period. d. the owner's drawings account will be debited

B

The expense recognition principle indicates that expenses are related to revenues.One way of stating the principle is to say that a. assets should be recognized with liabilities. b. efforts should be recognized with accomplishments. c. owner withdrawals should be recognized with owner contributions. d. cash payments should be recognized with cash receipts

B

Which one of the following does not result in immediate revenue recognition? a. Recording rent earned as an adjusting entry on the last day of the accounting period. b. Accepting cash from an established customer for services to be performed overthe next three months. c. Billing customers on June 30 for services completed during June. d. Receiving cash for services performed

B

A business organized as a corporation a. is not a separate legal entity in most states. b. requires that stockholders be personally liable for the debts of the business. c. is owned by its stockholders. d. terminates when one of its original stockholders dies

C

A post-closing trial balance will show a. zero balances for all accounts. b. zero balances for balance sheet accounts. c. only balance sheet accounts. d. only income statement accounts.

C

An account consists of a. a title, a debit balance, and a credit balance. b. a title, a left side, and a debit balance. c. a title, a debit side, and a credit side. d. a title, a right side, and a debit balance

C

An accounting record of the balances of all assets, liabilities, and owner's equity accounts is called a a. compound entry. b. general journal. c. general ledger. d. chart of accounts

C

Closing entries may be prepared from all of the following except a. Adjusted balances in the ledger b. Income statement and balance sheet columns of the worksheet c. Balance sheet d. Income and owner's equity statements

C

If an owner makes a withdrawal of cash from a proprietorship, then a. there has been a violation of accounting principles. b. owner's equity will increase. c. owner's equity will decrease. d. there will be a new liability showing the owner owes money to the business.

C

In the first month of operations, the total of the debit entries to the cash account amounted to $1,400 and the total of the credit entries to the cash account amounted to$800. The cash account has a(n) a. $800 credit balance. b. $1,400 debit balance. c. $600 debit balance. (+1,400 - 800) d. $600 credit balance

C

Martha Innocenzi Ito began the Innocenzi Company by investing $75,000 of cash in the business. The company recorded revenues of $555,000, expenses of $410,000, and had owner drawings of $30,000. What was Innocenzi's net income for the year? a. $115,000. b. $145,000. (555,000 - 410,000) c. $175,000. d. $190,000.

C

Mellon Company purchases $1,500 of equipment from Office Equipment Inc. for cash.The effect on the components of the basic accounting equation of Mellon Company is a. an increase in assets and liabilities. b. a decrease in assets and liabilities. c. no change in total assets. d. an increase in assets and a decrease in liabilities

C

On January 1, 2020, Utah Utility Company reported owner's equity of $705,000. During the year, the owner withdrew cash of $30,000. At December 31, 2020, the balance in owner's equity was $795,000. What amount of net income or net loss would the company report for 2020? a. Net loss of $60,000 b. Net income of $90,000 c. Net income of $120,000 (795,000 + 30,000 - 705,000) d. Net income of $150,000

C

The SEC and FASB are two organizations that are primarily responsible forestablishing generally accepted accounting principles. It is true that a. they are both governmental agencies b. the SEC is a private organization of accountants. c. the SEC often mandates guidelines when no accounting principles exist. d. the SEC and FASB rarely cooperate in developing accounting standards

C

The accounting process is correctly sequenced as a. identification, communication, recording. b. recording, communication, identification. c. identification, recording, communication. d. communication, recording, identification.

C

The net income (or loss) for the period a. is found by computing the difference between the income statement credit column and the balance sheet credit column on the worksheet. b. cannot be found on the worksheet. c. is found by computing the difference between the income statement columns ofthe worksheet. d. is found by computing the difference between the trial balance totals and the adjustedtrial balance totals.

C

Beethoven Company provided consulting services and billed the client $3,600. As aresult of this event, a. assets remained unchanged. b. assets increased by $3,600. c. owner's equity increased by $3,600. d. assets and owner's equity both increased by $3,600

D

Closing entries are a. an optional step in the accounting cycle. b. posted to the ledger accounts from the worksheet. c. made to close permanent or real accounts. d. journalized in the general journal

D

The basic accounting equation may be expressed as a. Assets = Equities. b. Assets - Liabilities = Owner's Equity. c. Assets = Liabilities + Owner's Equity. d. All of these answer choices are correct

D

The ledger should be arranged in a. alphabetical order. b. chronological order. c. dollar amount order. d. None of these choices are correct.

D

Which of the following statements is false? a. Revenues increase owner's equity. b. Revenues have normal credit balances. c. Revenues are a positive factor in the computation of net income. d. Revenues are increased by debits

D

Which of the following would not be considered an internal user of accounting data for the LMN Company? a. President of the company. b. Production manager. c. Merchandise inventory clerk. d. President of the employees' labor union

D

True or False: Accounting communicates financial information about a business enterprise to both internal and external users.

True