ACC101 (313 terms)

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

Merchandise inventory includes: a. All goods owned by a company and held for sale. b. All goods in transit. c. All goods on consignment. d. Only damaged goods. e. All goods in the stores of company.

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

A company purchased new computers at a cost of $28,000 on January 1, 2010. The computers are estimated to have a useful life of 5 years and have a salvage value of 3,000. The company uses the straight-line method of depreciation. How much depreciation expense will be recorded for the computers for the year ended December 31, 2010? a. $5,000 b. $6,000 c. $3,000 d. $5,600 e. $6,500

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 method of valuing the cost of goods sold that uses the cost of the oldest items in inventory first. What is it? a. FIFO b. LIFO c. Weighted Average d. Specific method e. None of these

A vehicle had an estimated useful life of 8 years. The vehicle cost $23,000 and its estimated salvage value is $1,500. The depreciation expense (using straight line method) for a year is: a. $ 2687.50. b. $ 3546.50. c. $ 2875.00. d. $10,750.00. e. $ 2,856.25.

Accountant of the company wrote an entry in journal: Dr Allowance for doubtful account 2000 Cr Account receivable 2000 This entry is written to: a. Write off an uncollectible account receivable b. Record bad debt expense for the period c. Close bad debt expense d. Close allowance for doubtful account e. Recover a written - off bad debt

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

All expenditures necessary to bring an item to a salable condition and location. This statement is the definition of: a. Inventory costs b. Cost of goods sold c. Invoice cost d. Freight cost e. None of these

An example of an operating activity is: a. Paying wages. b. Purchasing office equipment. c. Borrowing money from a bank. d. Selling stock. e. Paying off a loan.

An overstatement of ending inventory will cause a. An overstatement of assets and equity on the balance sheet. b. An understatement of assets and equity on the balance sheet. c. An overstatement of assets and an understatement of equity on the balance sheet. d. An understatement of assets and an overstatement of equity on the balance sheet. e. No effect on the balance sheet.

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

At the end of the period, A book store has 5000 books on the shelves of the store, in which, 500 books are consigned by MCQ company. During the period, the store also ordered 400 books with FOB destination point term, which are still in transit. Cost per unit of all books is $20. How much are Inventories reported in the Balance sheet if all inventories are reported at cost? a. 90,000 b. 98,000 c. 89,000 d. 108,000 e. 100,000

Borrow $ 1,000 loan to pay for new equipment of the company is recorded with: a. Debit equipment and credit loan b. Credit equipment and debit loan c. Debit cash and credit loan d. Credit cash and debit loan e. None of these

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

Costs included in the Merchandise Inventory account can include: a. Invoice price minus any discount, Transportation-in, Storage, Insurance b. Invoice price plus any discount, Transportation-in, Storage, Insurance c. Invoice price minus any discount, Transportation-out, Storage, Insurance d. Invoice price minus any discount, Transportation-in, cost of good sold e. All of these

Depreciation is: a. The assigning or allocating of a fixed asset's cost to expense over the accounting periods that the asset is likely to be used. b. The assigning or allocating of a tangible asset's cost to expense over the accounting periods that the asset is likely to be used. c. The assigning or allocating of a intangible asset's cost to expense over the accounting periods that the asset is likely to be used. d. The assigning or allocating of a fixed asset's cost to expense over the accounting periods. e. None of these

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

Electron borrowed $15,000 cash from TechCom by signing a promissory note. TechCom's entry to record the transaction should include a: a. Debit to Notes Receivable for $15,000. b. Debit to Accounts Receivable for $15,000. c. Credit to Notes Receivable for $15,000. d. Debit Notes Payable for $15,000. e. Debit to Cash for $15,000.

Flash had cash inflows from operations $62,500; cash outflows from investing activities of $47,000; and cash inflows from financing of $25,000. The net change in cash was: a. $40,500 increase. b. $40,500 decrease. c. $134,500 decrease. d. $134,000 increase. e. $9,500 increase.

How will it affect Income Statement if an accrued expense of $450 is forgotten to record at the end of the period? a. Net Income in the Income Statement will be overstated for $450 b. Net Income in the Income Statement will not be affected c. Income Statement will not be affected but Balance sheet will be understated d. Net income in the Income Statement will be understated for $450 e. Net income in the Income Statement will be overstated $900

How will it affect total Assets in the balance sheet if tangible fixed assets are not depreciated at the end of the period? a. Total Assets are overstated b. Total Assets will not be affected c. Total Assets will not be affected but Liabilities will be overstated d. Total Assets will be understated e. None of these

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.

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.

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

John, the owner of Matt company, withdrew $8,000 from the business during the current year. The entry to close the withdrawals account at the end of the year, is: a. Debit capital $8,000 and credit withdrawal $ 8,000 b. Debit capital $8,000 and credit cash $ 8,000 c. Debit capital $8,000 and credit expense $ 8,000 d. Debit expense $8,000 and credit income $ 8,000 e. Credit capital $8,000 and debit withdrawal $ 8,000

Newton Company uses the allowance method of accounting for uncollectible accounts. On May 3, the Newton Company wrote off the $3,000 uncollectible account of its customer, P. Best. The journal entry on May 3 is: a. Dr allowance for doubtful debts 3000 Cr account receivable 3000 b. Dr bad debt expense 3000 Cr account receivable 3000 c. Dr bad debt expense 3000 Cr Allowance for doubtful debt 3000 d. Dr account receivable 3000 Cr bad debt expense 3000 e. Dr Accounts receivable 3000 Cr Cash 3000

On January 1, Southwest College received $1,200,000 in Unearned Tuition Revenue from its students for the spring semester, which spans four months beginning on January 2. What amount of tuition revenue should the college recognize on January 31? a. $300,000. b. $600,000. c. $800,000. d. $900,000. e. $1,200,000.

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

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

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

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

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

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.

Selling products for cash $300 and $700 on credit. Show the general journal entry to record sale revenue of 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

The Income Summary account is: a. Temporary account that need to be closed at the end of accounting period. b. Permanent account that need to be closed at the end of accounting period. c. Temporary account that need not to be closed at the end of accounting period. d. Permanent account that need not to be closed at the end of accounting period. e. It depends on business

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.

The balance in Tee Tax Services' office supplies account on February 1 and February 28 was $1,200 and $375, respectively. If the office supplies expense for the month is $1,900, what amount of office supplies was purchased during February? a. $1,075 b. $1,500 c. $1,525 d. $2,325 e. $3,100

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.

The financial statement that reports the assets, liabilities, and stockholders' (owner's) equity at a specific date is the a. Balance sheet b. Income statement c. Ledger d. General journal e. None of these

The inventory valuation method that results in the lowest taxable income in a period of inflation is: a. LIFO method. b. FIFO method. c. Weighted-average cost method. d. Specific identification method. e. Gross profit method.

The operating activities of a business exclude: a. Borrowing. b. Purchasing. c. Marketing. d. Distribution. e. All of these.

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.

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.

The special account used only in the closing process to temporarily hold the amounts of revenues and expenses before the net difference is added to (or subtracted from) the owner's capital account is the: a. Income Summary account. b. Closing account. c. Balance column account. d. Profit accounts. e. Loss accounts.

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

The useful life of a fixed asset is: a. The length of time it is productively used in a company's operations. b. Never related to its physical life. c. Its productive life, but not to exceed one year. d. Don't need to be determined. e. Determined by law.

Where is Accumulated depreciation reported? a. Balance sheet b. Income Statement c. Statement of cash flows d. Statement of changes in Equity e. Notes for financial statement

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

Which of the following accounts is not increased by a debit? a. Revenue b. Expense c. Asset d. Withdrawal e. None of these

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

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

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

Which statement is correct? a. Accumulated Depreciation is a contra asset account b. Depreciation expense is a contra asset account c. Account payable is a contra asset account d. Account receivable is a contra asset account e. Unearned revenue is a contra asset account

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

Which statement is true: a. Account payable is considered a liability on the balance sheet b. Account payable is considered a liability on the statement of owner equity c. Account payable is considered a liability on the income statement d. Account payable is considered a liability on the cash flow statement e. None of these

Which statement is true: a. Depreciation Expense is shown on the income statement in order to achieve accounting's matching principle. b. Depreciation Expense is shown on the balance sheet in order to achieve accounting's matching principle. c. Depreciation Expense is shown on the income statement d. Depreciation Expense is shown on the balance sheet e. None of these

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

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

Which statement is true? a. The double entry system requires every transaction to be recorded in at least two places b. The double entry system requires every transaction to be recorded in at least three places c. The double entry system requires every transaction to be recorded in at least one places d. The double entry system requires every transaction to be recorded in at least four places e. None of these

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

A company acquires equipment for $75,000 cash. This represents a(n): a. Operating activity. b. Investing activity. c. Financing activity. d. Revenue activity. e. Expense activity.

A company had inventory of 10 units at a cost of $20 each on November 1. On November 2, it purchased 10 units at $21 each. On November 6 it purchased 15 units at $25 each. On November 8, it sold 20 units for $54 each. Using the LIFO perpetual inventory method, what was the cost of the 20 units sold? a. $395. b. $480. c. $375. d. $510. e. $520.

A company had inventory of 10 units at a cost of $20 each on November 1. On November 2, it purchased 10 units at $22 each. On November 6 it purchased 6 units at $25 each. On November 8, it sold 22 units for $54 each. Using the FIFO perpetual inventory method, what was the cost of the 22 units sold? a. $570 b. $470 c. $670 d. $370 e. $740

A company had inventory of 5 units at a cost of $20 each on November 1. On November 2, it purchased 10 units at $22 each. On November 6 it purchased 6 units at $25 each. On November 8, it sold 18 units for $54 each. Using the LIFO perpetual inventory method, what was the cost of the 18 units sold? a. $395. b. $410. c. $450. d. $510. e. $520.

A company has a $100,000; 9%; 120 day note payable issued on 6 December. How much of interest payable will be reported in the balance sheet as at 31 December? a. 0 because interest is not yet paid b. 625 c. 360 d. 450 e. 500

A company has inventory of 10 units at a cost of $10 each on June 1. On June 3, it purchased 20 units at $12 each. 12 units are sold on June 5. Using the FIFO periodic inventory method, what is the cost of ending inventories? a. $120. b. $216. c. $128. d. $130. e. $140.

A company has inventory of 10 units at a cost of $10 each on June 1. On June 3, it purchased 20 units at $12 each. 12 units are sold on June 5. Using the FIFO perpetual inventory method, what is the cost of the 12 units that were sold? a. $120. b. $124. c. $128. d. $130. e. $140.

A company has sales of $350,000, Account Receivable of 50,000 and estimates that 0.7% of its sales are uncollectible. The estimated amount of bad debts expense is a. $350 b. $2,450. c. $3,450. d. $300 e. $530

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

A company purchased new computers at a cost of $14,000 on October 1, 2010. The computers are estimated to have a useful life of 4 years and a salvage value of $2,000. The company uses the straight-line method of depreciation. How much depreciation expense will be recorded for the computers for the year ended December 31, 2010? a. $250 b. $750 c. $875 d. $1,000 e. $3,000

A company's Office Supplies account shows a beginning balance of $600 and an ending balance of $400. If office supplies expense for the year is $3,100, what amount of office supplies was purchased during the period? a. $2,700. b. $2,900. c. $3,300. d. $3,500. e. $3,700.

A method of calculating the COGS that uses the cost of the newest items in inventories.. What is it? a. FIFO inventory system b. LIFO inventory system c. Weighted inventory system d. Perpetual inventory system e. Periodic inventory system

A method of valuing inventory in which the items acquired last are treated as the ones sold first. What is it? a. FIFO b. LIFO c. Weighted Average d. Specific method e. None of these

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

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

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.

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.

An example of a financing activity is: a. Buying office supplies. b. Obtaining a long-term loan. c. Buying office equipment. d. Selling inventory. e. Buying land.

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

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

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

Failure to make adjusting entries for prepaid expense will result in a. Overstatement of expenses b. Understatement of expenses c. Understatement of assets d. Overstatement of Liabilities e. Understatement of Liabilities

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

How are deposits in transit adjusted in Bank reconciliation statement? a. Deducted from Bank statement balance b. Added to Bank statement balance c. Deducted from accounting book balance d. Added to accounting book balance e. None of these

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

Identity the consequences of not making adjustment for accrued expense a. Overstatement of liabilities b. Understatement of liabilities c. Overstatement of expenses d. Understatement of capital e. Overstatement of Assets

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.

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.

Income statement and Balance sheet a. Report effects of cash-relating transactions b. Do not explain the changes in cash during the period c. Record sources and uses of cash during the period d. Are classified into operating activities, investing activities and financing activities. e. None of these

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

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

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

J. Awn, the proprietor of Awn Services, withdrew $8,700 from the business during the current year. The entry to close the withdrawals account at the end of the year, is: a. Debit withdrawal 8,700 and credit cash $ 8,700 b. Debit capital $8,700 and credit withdrawal $ 8,700 c. Debit capital $8,700 and credit expense $ 8,700 d. Debit expense $8,700 and credit income $ 8,700 e. Credit capital $8,700 and debit withdrawal $ 8,700

Journal entries recorded at the end of each accounting period to prepare the revenue, expense, and withdrawals accounts for the upcoming period and to update the owner's capital account for the events of the period just finished are referred to as: a. Adjusting entries. b. Closing entries. c. Final entries. d. Work sheet entries. e. Updating entries.

Net Sales minus Cost of Goods Sold equals to: a. Profit b. Gross profit c. Net income d. Profit before tax e. Profit after tax

On April 30, 2009, a three-year insurance policy was purchased for $18,000 with coverage to begin immediately. What is the amount of insurance expense that would appear on the company's income statement for the year ended December 31, 2009? a. $500. b. $4,000. c. $6,000. d. $14,000. e. $18,000.

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.

On June 1, $800 of goods are sold with credit terms of 1/10, n/30. How much would the seller receive if the buyer pays on June 8? a. 790 b. 792 c. 240 d. 800 e. 232

On June 1, 2010, The company paid $1,000 cash for the loan owing the bank before. Recording this transaction. a. Debit cash and credit loan b. Credit cash and debit loan c. Debit account payable and credit loan d. Credit account payable and debit loan e. None of these

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

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? a. A $0 balance. b. A $4,300 debit balance. c. A $4,300 credit balance. d. A $5,700 debit balance. e. A $5,700 credit balance.

Operating activities: a. Are the means organizations use to pay for resources like land, buildings and equipment. b. Involve using resources to research, develop, purchase, produce, distribute and market products and services. c. Involve acquiring and disposing of resources that a business uses to acquire and sell its products or services. d. Are also called asset management. e. Are also called strategic management.

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.

Prepaid expenses, depreciation, accrued expenses, unearned revenues, and accrued revenues are all examples of: a. Items that require contra accounts. b. Items that require adjusting entries. c. Asset and equity. d. Asset accounts. e. Income statement accounts.

Provide descriptions for this transaction: Debit cash $ 5,000 and Credit Account Receivable $5,000 a. Buying on credit. b. Received cash for an account receivable. c. Buying for cash. d. Selling for cash. e. Selling on credit.

Provide descriptions for this transaction: Debit expense $2,000 and Credit supplies $2,000 a. Purchased supplies by cash b. Used supplies c. Counted supplies d. Purchased supplies on credit e. None of these

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

Provide descriptions for this transaction: Debit inventory $8,000 and credit Account payable $,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

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

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

QN=257 A company that uses a perpetual inventory system made the following cash purchases and sales: Jan, 1: Purchased 100 units at $10 per unit. Feb, 5: Purchased 60 units at $12 per unit. March, 16: Sold 40 units for $ 16 per unit. Prepare general journal entries to record the March 16 sale assuming a cash sale and the FIFO method is used. a. March 16 Dr Cash 400 Cr Sale revenue 400 Dr COGS 640 Cr Inventories 640 b. March 16 Dr Cash 640 Cr Sale revenue 640 Dr COGS 400 Cr Inventories 400 c. March 16 Dr Sale revenue 640 Cr Cash 640 Dr COGS 400 Cr Inventories 400 d. March 16 Dr Sale revenue 640 Cr Cash 640 Dr Inventories 400 Cr COGS 400 e. None of these

Revenues, expenses, and withdrawals accounts, which are closed at the end of each accounting period are: a. Real accounts. b. Temporary accounts. c. Closing accounts. d. Permanent accounts. e. Balance sheet accounts.

Something of value that cannot be physically touched, such as a brand, franchise, trademark, or patent is the definition of: a. Tangible assets b. Intangible assets c. Fixed assets d. Current assets e. Non - current assets

The Income Summary account is used: a. To adjust and update asset and liability accounts. b. To close the revenue and expense accounts. c. To determine the appropriate withdrawal amount. d. To replace the income statement under certain circumstances. e. To replace the capital account in some businesses.

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.

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.

The accounting principle that requires revenue to be reported when earned is the: a. Matching principle. b. Revenue recognition principle. c. Time period principle. d. Accrual reporting principle. e. Going-concern principle.

The buyer is responsible for the costs of shipping when goods are sold with the terms FOB a. Shipping board b. Shipping point c. Destination d. On board e. None of these

The company buys a new building for operation is recorded with below entry: a. Debit cash and credit withdrawal b. Credit cash and debit equipment c. Credit account payable and debit withdrawal d. Credit cash and debit expense e. None of these

The company buys a new car for personal use of the owner is recorded with below entry: a. Debit cash and credit withdrawal b. Credit cash and debit withdrawal c. Credit account payable and debit withdrawal d. Credit cash and debit expense e. None of these

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

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. f. Balance sheet.

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.

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

Under the accrual basis of accounting, expenses are reported in the accounting period when the a. Cash is paid for purchasing b. Expense incurred c. Contracts have been signed d. Trading negotiation has been done e. None of these

Under the accrual basis of accounting, revenues are reported in the accounting period when the a. Cash is received b. Service or goods have been delivered c. Contracts have been signed d. Trading negotiation has been done e. None of these

Unearned Revenues is what type of account? a. Asset b. Liability c. Owner equity d. None of these e. Net Asset

Unearned revenue is reported in the financial statements as: a. Revenue on the balance sheet. b. A liability on the balance sheet. c. Unearned revenue on the income statement. d. An asset on the balance sheet. e. An operating activity on the statement of cash flows.

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

What is the proper adjusting entry at December 31, the end of the accounting period, if the balance in the prepaid insurance account is $7,750 before adjustment, and the unexpired amount per analysis of policies is, $3,250? a. Debit Insurance Expense, $3,250; credit Prepaid Insurance, $3,250. b. Debit Insurance Expense, $4,500; credit Prepaid Insurance, $4,500. c. Debit Prepaid Insurance, $4,500; credit Insurance Expense, $4,500. d. Debit Insurance Expense, $7,750; credit Prepaid Insurance, $7,750. e. Debit Cash, $7,750; Credit Prepaid Insurance, $7,750.

Which account is noncurrent or long-term asset a. Equipment, supplies, vehicle b. Equipment, building, vehicle c. Equipment, prepaid expense, vehicle d. Equipment, account receivable, vehicle e. None of these

Which accounts don't need to do closing entries? a. Revenue b. Non - current asset c. Income Summary d. Withdrawals e. Expense

Which discounts are offered based on quantities purchased a. Credit discounts b. Trade discounts c. Purchase discounts d. Payment discounts e. None of these

Which is the assumption stating that A business is accounted for separately from other business entities, including its owner? a. Going-Concern Assumption b. Business Entity Assumption c. Time Period Assumption d. Matching Principle e. Cost Principle

Which is the process that resets revenue, expense and withdrawal account balances to zero at the end of the period a. Adjusting account b. Closing process c. Recording transaction d. Prepare trial balance e. Prepare financial statement

Which of the following errors would result in the trial balance still balancing? a. The journal entry was posted by debiting salaries expense and debiting cash b. Posted $500 to each account instead of $5000 c. The salaries expense was posted as $500, but the cash was posted as $5000 d. All of these errors can result in the balance of the trial balance e. None of these

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

Which statement is true about tangible asset? a. Tangible assets are assets held for sale b. Tangible assets are assets held for operating activity c. Tangible assets are assets acquired by loan d. Tangible assets are assets never reduce value e. Tangible assets are assets increase value over the time

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

Which statement is true? a. A contra-asset account such as Accumulated Depreciation will likely have debit balance b. A contra-asset account such as Accumulated Depreciation will likely have credit balance c. A contra-asset account such as Depreciation will likely have credit balance d. A contra-asset account such as Depreciation will likely have debit balance e. None of these

A company's balance sheet shows: cash $22,000, accounts receivable $16,000, office equipment $50,000, and accounts payable $17,000. What is the amount of owner's equity? a. $17,000. b. $29,000. c. $71,000. d. $88,000. e. $105,000.

Which statement is true? a. Ending inventory is equal to merchandise available for sale minus beginning inventory. b. Ending inventory is equal to merchandise available for sale minus cost of goods sold. c. Ending inventory is equal to merchandise available for sale minus net cost of purchases. d. Beginning inventory is equal to merchandise available for sale minus cost of goods sold. e. None of these.

Which statement is true? a. Expenses increase Owner's equity b. Expenses decrease Owner's equity c. Expenses increase Owner's withdrawal d. Expenses decrease Owner's withdrawal e. None of these

Which statement is true? a. Income summary and withdrawals accounts are permanent accounts and should be closed at the end of the accounting period. b. Income summary and withdrawals accounts are temporary accounts and should be closed at the end of the accounting period. c. Income summary and withdrawals accounts are temporary accounts and don't need to be closed at the end of the accounting period. d. Income summary and Liability accounts are temporary accounts and should be closed at the end of the accounting period. e. Income summary and asset accounts are temporary accounts and should be closed at the end of the accounting period.

Which statement is true? a. Total asset cost plus accumulated depreciation equals book value. b. Total asset cost minus accumulated depreciation equals book value. c. Total asset plus depreciation expense equals book value. d. Total asset minus depreciation expense equals book value. e. None of these.

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

Withdrawal account, revenues account, expenses account and income summary account are a. Permanent accounts b. Temporary accounts c. Equity accounts d. Closing accounts e. None of these above

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 company borrows $125,000 from the Eastside Bank and receives the loan proceeds in cash. This represents a(n): a. Operating activity. b. Investing activity. c. Financing activity. d. Revenue activity. e. Expense activity.

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.

A company has $20,000 in outstanding accounts receivable and it uses the allowance method to account for uncollectible accounts. Experience suggests that 6% of outstanding receivables are uncollectible. The current debit balance (before adjustments) in the allowance for doubtful accounts is $800. The journal entry to record the adjustment to the allowance account includes a debit to Bad Debts Expense for: a. $1200 b. $500 c. $400 d. $1000 e. None of these

A company that uses a perpetual inventory system made the following cash purchases and sales: Jan, 1: Purchased 100 units at $10 per unit. Feb, 5: Purchased 60 units at $12 per unit. March, 16: Sold 40 units for $ 16 per unit. Prepare the general journal entry to record the March 16 sale assuming a cash sale and the LIFO method is used: a. Dr Cash 640 Cr Sale revenue 640 Dr COGS 450 Cr Inventories 450 b. Dr Cash 640 Cr Sale revenue 640 Dr COGS 840 Cr Inventories 840 c. Dr Cash 640 Cr Sale revenue 640 Dr COGS 480 Cr Inventories 480 d. Dr Sale revenue 640 Cr cash 640 Dr COGS 480 Cr Inventories 480 e. None of these

Accounts receivable that may become uncollectable and will be written off , is known as: a. Expense b. Account receivable c. Bad debts d. Debts e. Uncollectable account

Acme-Jones Company uses a weighted-average perpetual inventory system. August 2, 8 units were purchased at $12 per unit. August 18, 15 units were purchased at $14 per unit. August 29, 20 units were sold. August 31, 10 units were purchased at $16 per unit. What is the per-unit value of ending inventory on August 31? a. $12.00. b. $13.30. c. $15.38. d. $16.00. e. $17.74.

Adjusting entries: a. Affect only income statement accounts. b. Affect only balance sheet accounts. c. Affect both income statement and balance sheet accounts. d. Affect only cash flow statement accounts. e. Affect only equity accounts.

An adjusting entries for unearned revenue affects a. Assets and expenses b. Assets and revenues c. Revenue and Liabilities d. Expenses and Liabilities e. Assets and Liabilities

An adjusting entry could be made for each of the following except: a. Prepaid expenses. b. Depreciation. c. Cash. d. Accrued expenses e. Accrued revenues.

An adjusting entry could be made for each of the following except: a. Prepaid expenses. b. Depreciation. c. Owner withdrawals. d. Unearned revenues. e. Accrued revenues.

An estimate of an asset's value at the end of its benefit period is called: a. Asset at cost b. Book value c. Salvage value d. Depreciation expense e. Expense

An example of an investing activity is a. Paying wages of employees. b. Withdrawals by the owner. c. Purchase of land. d. Selling inventory. e. Contribution from owner.

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

Assets, liabilities, and equity accounts are not closed; these accounts are called: a. Nominal accounts. b. Temporary accounts. c. Permanent accounts. d. Contra accounts. e. Accrued accounts.

At the end of the current accounting period, Johnson Company failed to record utilities consumed during the period. Johnson will be billed for the utilities during the next accounting period. As a result, current period liabilities, and income, respectively, are a. Correct, correct b. Overstate, overstate c. Understate, overstate d. Overstate, understate e. Understate, correct

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 to record bad debt expense 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. Bad debts 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

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.

Given the following information, determine the cost of the inventory at June 30 using the LIFO perpetual inventory method. June, 1: Beginning inventory 15 units at $20 each June, 15: Sale of 6 units at $50 June, 29: Purchased of 8 units at $25 The cost of goods sold is : a. $200. b. $220. c. $120. d. $275. e. $300.

How are NSF checks adjusted in Bank reconciliation statement? a. Deducted from Bank statement balance b. Added to Bank statement balance c. Deducted from accounting book balance d. Added to accounting book balance e. None of these

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.

If accrued salaries were recorded on December 31 with a credit to Salaries Payable, the entry to record payment of these wages on the following January 5 would include: a. A debit to Cash and a credit to Salaries Payable. b. A debit to Cash and a credit to Prepaid Salaries. c. A debit to Salaries Payable and a credit to Cash. d. A debit to Salaries Payable and a credit to Salaries Expense. e. No entry would be necessary on January 5.

If throughout an accounting period the fees for legal services paid in advance by clients are recorded in an account called Unearned Legal Fees, the end-of-period adjusting entry to record the portion of those fees that has been earned is: a. Debit Cash and credit Legal Fees Earned. b. Debit Cash and credit Unearned Legal Fees. c. Debit Unearned Legal Fees and credit Legal Fees Earned. d. Debit Legal Fees Earned and credit Unearned Legal Fees. e. Debit Unearned Legal Fees and credit Accounts Receivable.

Justin Corporation uses a weighted-average perpetual inventory system. August 2, 10 units were purchased at $12 per unit. August 18, 15 units were purchased at $14 per unit. August 29, 12 units were sold. What was the amount of the cost of goods sold for this sale? a. $148.00. b. $150.50. c. $158.40. d. $210.00. e. $330.00.

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

Of the following accounts, the one that normally has a credit balance is: a. Cash. b. Office Equipment. c. Sales Salaries Payable. d. Owner, Withdrawals. e. Sales Salaries Expense.

On 11 December, the company provided service and received $4400. What is the journal entry to record this, given that service the company provides is a subject to VAT of 10%? a. Dr Cash 4400 Cr Service revenue 4400 b. Dr Cash 4000 Cr Service revenue 4000 c. Dr Cash 4400 Cr Service revenue 4000 Cr VAT payable 400 d. Dr Revenue 4000 Dr VAT receivable 400 Cr Cash 4400 e. Dr Service revenue 4400 Cr Cash 4000 Cr VAT payable 400

On May 1, 2009 Giltus Advertising Company received $1,500 from Julie Bee for advertising services to be completed April 30, 2010. The Cash receipt was recorded as unearned fees and at December 31, 2009, $1,000 of the fees had been earned. The adjusting entry on December 31 Year 1 should include: a. A debit to Unearned Fees for $500. b. A credit to Unearned Fees for $500. c. A credit to Earned Fees for $1,000. d. A debit to Earned Fees for $1,000. e. A debit to Earned Fees for $500.

Prior to recording adjusting entries, the Office Supplies account had a $359 debit balance. A physical count of the supplies showed $105 of unused supplies available. The required adjusting entry is: a. Debit Office Supplies $105 and credit Office Supplies Expense $105. b. Debit Office Supplies Expense $105 and credit Office Supplies $105. c. Debit Office Supplies Expense $254 and credit Office Supplies $254. d. Debit Office Supplies $254 and credit Office Supplies Expense $254. e. Debit Office Supplies $105 and credit Supplies Expense $254.

Provide descriptions for this transaction: Debit supplies $1,000 and Credit Account Payable $1,000 a. Used supplies. b. Purchased supplies. c. Purchased supplies on credit. d. Counted supplies. e. Transfer supplies into inventory.

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

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

The J. Godfrey, Capital account has a credit balance of $17,000 before closing entries are made. If total revenues for the period are $55,200, total expenses are $39,800, and withdrawals are $9,000, what is the ending balance in the J. Godfrey, Capital account after all closing entries are made? a. $ 8,000. b. $15,400. c. $23,400. d. $17,000. e. $32,400.

The account used to record the investment of owner into the business is: a. A revenue account. b. The owner's withdrawals account. c. The owner's contributed capital account. d. An expense account. e. A liability account.

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.

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

The company has $1679 credit sales at year end. Experiences show that 4% of credit sales may not be collectable. What is the estimated bad debt expense to be record at year end? a. $1200 b. $419 c. $67.16 d. $100 e. None of these

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

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

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

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

The seller is responsible for the costs of shipping its goods to the buyer when the terms of the sale are FOB: a. Shipping board b. Shipping point c. Destination point d. On board e. None of these

The system of preparing financial statements based on recognizing revenues when the cash is received and reporting expenses when the cash is paid is called: a. Accrual basis accounting. b. Operating cycle accounting. c. Cash basis accounting. d. Revenue recognition accounting. e. Current basis accounting.

Thomas Enterprises purchased a depreciable asset on January 1, 2008 at a cost of $100,000 and use straight-line method to estimate depreciation expense. The asset is expected to have a salvage value of $15,000 at the end of its five-year useful life. Balance of accumulated depreciation of this asset at the end of 2009 is a. $27540 b. $21600 c. $34000 d. $17000 e. $90000

Unearned revenues are: a. Revenues that have been earned and received in cash. b. Revenues that have been earned but not yet collected in cash. c. Liabilities created when a customer pays in advance for products or services before the revenue is earned. d. Recorded as an asset in the accounting records. e. Increases to owners' capital.

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.

Which accounts belong to Permanent Accounts? a. Revenue, asset, liability b. Revenue, expense, income summary c. Asset, liability, owner capital d. Revenue, expense, withdrawal e. Asset, liability, revenue

Which accounts don't need to do closing entries? a. Gain in disposal of asset b. Income Summary c. Current Liability d. Withdrawals e. Expense

Which accounts don't need to do closing entries? a. Revenue b. Income Summary c. Intangible asset d. Withdrawals e. Expense

Which accounts don't need to do closing entries? a. Revenue b. Income Summary c. Prepaid expense d. Withdrawals e. Expense

Which accounts used to record amounts owed to suppliers for products or services purchased on credit? a. Unearned revenue b. Trade account receivable c. Trade accounts payable d. Revenue e. Prepayment

Which discounts are provided to customers as an incentive for them to pay early a. Credit discounts b. Trade discounts c. Purchase discounts d. Payment discounts e. None of these

Which is true about An account balance: a. Always a debit. b. Is the difference between the total debits and total credits for an account c. Is the difference between the total debits and total credits for an account including the beginning balance d. None of these e. Always a credit.

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.

Which of the following accounts is not increased by a credit a. Revenue b. Liability c. Asset d. Owner's equity e. None of these

Which of the following assets is not depreciated? a. Vehicle b. Machine c. Inventory d. Buildings e. All of these are depreciated

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

Which of the following statements is correct? a. The left side of a T-account is the credit side. 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. d. Credits increase asset and expense accounts, and decrease liability, equity, and revenue accounts. e. In certain circumstances the total amount debited need not equal the total amount credited for a particular transaction

Which statement is true: a. Merchandise available for sale includes Beginning inventory and ending inventory. b. Merchandise available for sale includes Beginning inventory and cost of goods sold. c. Merchandise available for sale includes Beginning inventory and Net cost of purchases. d. Merchandise available for sale includes ending inventory and Net cost of purchases. e. None of these

Which statement is true? a. Revenue and expense accounts are permanent accounts and should be closed at the end of the accounting period. b. Revenue and withdrawal accounts are permanent accounts and should be closed at the end of the accounting period. c. Revenue and expense accounts are temporary accounts and should be closed at the end of the accounting period. d. Revenue and asset accounts are temporary accounts and should be closed at the end of the accounting period. e. Liability and asset accounts are temporary accounts and should be closed at the end of the accounting period.

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.

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

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

A company purchased a plant asset for $45,000. The asset has an estimated salvage value of $6,000, and an estimated useful life of 10 years. The annual depreciation expense using the straight-line method is a. $3,000 per year. b. $9,300 per year. c. $3,600 per year. d. $3,900 per year. e. $4,500 per year.

A company that uses a perpetual inventory system made the following cash purchases and sales: Jan, 1: Purchased 100 units at $10 per unit. Feb, 5: Purchased 60 units at $12 per unit. March, 16: Sold 40 units for $ 16 per unit. Prepare the general journal entry to record the March 16 sale assuming a cash sale and the weighted average method is used. a. Dr Cash 640 Cr Sale revenue 640 Dr COGS 450 Cr Inventories 450 b. Dr Cash 640 Cr Sale revenue 640 Dr COGS 340 Cr Inventories 340 c. Dr Cash 640 Cr Sale revenue 640 Dr COGS 470 Cr Inventories 470 d. Dr Cash 640 Cr Sale revenue 640 Dr COGS 430 Cr Inventories 430 e. None of these

A debit is: a. An increase in an account. b. The right-hand side of a T-account. c. A decrease in an account. d. The left-hand side of a T-account. e. An increase to a liability account.

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 new photocopy machinery was purchased for $110,000. To put this machine in a readily usable condition, it cost the company additionally $500 for freight, $2,000 for assembling and testing. What is the cost of the machinery to be recorded in accounting book? a. $110,000 b. $110,500 c. $112,000 d. $112,500 e. $108,000

A painting is offered for sale at $240,000 but is currently assessed at $215,000. The purchaser believes this painting worth $235,000 but ultimately purchases it for $225,000. According to historical cost principle, the purchaser records this painting at: a. $240,000 b. $215,000 c. $235,000 d. $225,000 e. $230,000

A record of financial transactions in order by date and often defined as the book of original entry. This statement is about: a. None of these b. A Ledger c. A Source document d. A General journal e. An Income statement

A simple account form widely used in accounting as a tool to understand how debits and credits affect an account balance is called a: a. Withdrawals account. b. Capital account. c. Drawing account. d. T-account. e. Balance column sheet.

ACB Co. agreed to purchase $150,000 inventories from XZY Co. XZY shipped the goods FOB destination point. On December 31, ACB Co. was aware that the goods had been shipped and would be received any day in January. Which statement is true? a. ACB Co. should include the goods in its inventory calculated on December 31. b. ACB Co. should include the goods in its inventory calculated on December 31, but should not record the obligation to pay for them. c. ACB Co. should not include the goods in its inventory calculated on December 31, but should include the related payable on its balance sheet at December 31. d. ACB Co. should not include the goods in its inventory calculated on December 31, nor the related payable on its balance sheet at December 31. e. None of these

Adjusting entries at the end of an accounting period would not be required for which of the following? a. Multi-period costs that must be split among 2 or more accounting periods b. Multi-period revenues that must be split among 2 or more accounting periods c. Expenses that have been incurred in a given period but not as yet recorded in the accounts d. Revenue that has been earned and recorded in the accounting records. e. None of these

After preparing and posting the closing entries to close revenues (and gains) and expenses (and losses) into the income summary, the income summary account has a debit balance of $33,000. The entry to close the income summary account will include: a. A debit of $33,000 to owner withdrawals. b. A credit of $33,000 to owner withdrawals. c. A debit of $33,000 to income summary. d. A debit of $33,000 to retained earnings. e. A credit of $33,000 to retained earnings.

An adjusting entry could be made for each of the following except: a. Accrued expenses. b. Depreciation. c. Unearned revenues. d. Revenue. e. Accrued revenues.

An adjusting entry could be made for each of the following except: a. Prepaid expenses. b. Supplies c. Unearned revenues. d. Account payable. e. Accrued revenues.

At the beginning of 2009, a company's balance sheet reported the following balances: Total Assets = $125,000; Total Liabilities = $75,000; and Owner's Capital = $50,000. During 2009, the company reported revenues of $46,000 and expenses of $30,000. In addition, owner's withdrawals for the year totaled $20,000. Assuming no other changes to owner's capital, the balance in the owner's capital account at the end of 2009 would be: a. $66,000. b. $86,000. c. $(4,000). d. $46,000. e. Cannot be determined from the information provided.

Calculated as sales minus all costs directly related to those sales. It is about: a. Cost of goods sold b. Expense c. Revenue d. Gross profit e. Profit

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.

Dina Kader withdrew a total of $35,000 from her business during the current year. The entry needed to close the withdrawals account is: a. Debit Income Summary and credit Cash for $35,000. b. Debit Dina Kader, Withdrawals and credit Cash for $35,000. c. Debit Income Summary and credit Dina Kader, Withdrawals for $35,000. d. Debit Dina Kader, Capital and credit Dina Kader, Withdrawals for $35,000. e. Debit Dina Kader, Withdrawals and credit Dina Kader, Capital for $35,000.

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.

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

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

How are interests earned from depositing in bank adjusted in Bank reconciliation statement? a. Deducted from Bank statement balance b. Added to Bank statement balance c. Deducted from accounting book balance d. Added to accounting book balance e. None of these

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.

How is Stock dividend different from cash dividend? a. Stock dividend increases cash account balance of the corporation b. Stock dividend reduces equity c. Stock dividend reduces assets d. Stock dividend does not reduce assets and equity e. Stock dividend increased retained earnings

How will the Financial Statements be affected if Accountant in the company forgot to adjust a prepaid expense account at the end of the period? a. Assets in the Balance sheet will be overstated b. Liabilities in the Balance sheet will be overstated c. Assets in the Balance sheet will be understated and Revenues in the Income Statement will be overstated d. Assets in the Balance sheet will be overstated and Expenses in the Income Statement will be understated e. Liabilities in the Balance Sheet will be overstated and Expenses in the Income Statement will overstated

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.

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.

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 Equipment - Car and credit Cash.

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.

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.

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. Prepayment b. Account receivable c. Asset d. Account payable e. Cost of goods sold

Nelson Company purchased equipment on July 1 for $27,500 and decided to depreciate the equipment on the straight-line method over its useful life of five years. Assuming the equipment's salvage value is $3,500, the amount of monthly depreciation expense Nelson should recognize is: a. $2,400 b. $ 200 c. $4,800 d. $ 400 e. $ 450

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.

On April 1, 2009, a company paid the $1,350 premium on a three-year insurance policy with benefits beginning on that date. What will be the insurance expense on the annual income statement for the year ended December 31, 2009? a. $1,350. b. $450. c. $1,012.50. d. $337.50. e. $37.50.

On December, 30, 2012, E&Y sign a $90,000 contract to provide auditing services to its client in 2013. E&Y has a December 31 year end. Which accounting principle or assumption requires E&Y to record the auditing services revenue from this client in 2013, not 2012? a. Business entity assumption b. Time period assumption c. Matching principle d. Revenue recognition principle e. Cost principle

On January 1 a company purchased a five-year insurance policy for $1,800 with coverage starting immediately. If the purchase was recorded in the Prepaid Insurance account, and the company records adjustments only at year-end, the adjusting entry at the end of the first year is: a. Debit Prepaid Insurance, $1,800; credit Cash, $1,800. b. Debit Prepaid Insurance, $1,440; credit Insurance Expense, $1,440. c. Debit Prepaid Insurance, $360; credit Insurance Expense, $360. d. Debit Insurance Expense, $360; credit Prepaid Insurance, $360. e. Debit Insurance Expense, $360; credit Prepaid Insurance, $1,440.

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

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.

Provide descriptions for this transaction: Credit cash and debit owner equity a. Investing by owner in cash b. Paid expense of business c. Withdrawal of cash from business by owner for personal use d. Withdrawal of cash from business by owner for personal use or paid expense of business e. None of these

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

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 Credit 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

The adjusting entry to record the earned but unpaid salaries of employees at the end of an accounting period is: a. Debit Unpaid Salaries and credit Salaries Payable. b. Debit Salaries Payable and credit Salaries Expense. c. Debit Salaries Expense and credit Cash. d. Debit Salaries Expense and credit Salaries Payable. e. Debit Cash and credit Salaries Expense.

The amount due on the maturity date of a $12,000, 60-day 8%, note receivable is: a. $6,000. b. $12,000. c. $160. d. $12,160. e. $5,920.

The approach to preparing financial statements based on recognizing revenues when they are earned and matching expenses to those revenues is: a. Cash basis accounting. b. The matching principle. c. The time period principle. d. Accrual basis accounting. e. Revenue basis accounting.

The expense created by allocating the cost of fixed assets to the periods in which they are used, representing the expense of using the assets, is called a. Accumulated depreciation. b. A contra account. c. The matching principle. d. Depreciation expense. e. An accrued account.

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.

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

The inventory system continually updates accounting records for merchandising transactions. a. FIFO inventory system b. LIFO inventory system c. Weighted inventory system d. Perpetual inventory system e. Periodic inventory system

The inventory valuation method that identifies each item in ending inventory with a specific purchase and invoice is the: a. Weighted average inventory method. b. First-in, first-out method. c. Last-in, first-out method. d. Specific identification method. e. Retail inventory method.

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

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

What is the cost principle? a. The principle that an audit will always cost more than it is worth b. The principle that assets are reflected on a company's balance sheet at the greater of their cost or their fair value c. The principle that liabilities are always reflected at the current cost of liquidating them. d. The principle that assets are recorded at their historical cost. e. The principle that assets are reflected on a company's balance sheet at the lower of their cost or their fair value

When a sale is made with the credit terms of 2/10, net 30, the "2" refers to the: a. Interest rate b. Selling day c. Payment Due date d. Discount rate e. None of these

Which account of these accounts will be presented in Post-closing trial balance? a. Salaries expense b. Withdrawal c. Net income d. Retained Earnings e. Sales revenue

Which accounts belong to Temporary Accounts? a. Asset, liability, withdrawal, income summary b. Revenue, asset, withdrawal, income summary c. Revenue, expense, liability, income summary d. Revenue, expense, withdrawal, income summary e. Revenue, expense, withdrawal, asset

Which accounts don't need to do closing entries? a. Revenue b. Sales returns and allowances c. Withdrawals d. Gross profit e. Expense

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

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.

Which of the following statements is incorrect? a. The normal balance of accounts receivable is a debit. b. The normal balance of owner's withdrawals is a debit. c. The normal balance of unearned revenues is a credit. d. The normal balance of an expense account is a credit. e. The normal balance of the owner's capital account is a credit.

Which of the following will be presented in a direct Cashflow Statement? a. Depreciation expense b. Decreases in Prepaid expenses c. Loss in disposal of asset d. Cash paid to suppliers e. Increases in account payable

Which of the following will be presented in a direct Cashflow Statement? a. Bad debt expense b. Increases in Prepaid expenses c. Gain in disposal of asset d. Cash received from customers e. Increases in account receivable

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.

Which statement is true? a. Current liabilities include accounts receivable, unearned revenues, and salaries payable. b. Current liabilities include prepayment, unearned revenues, and salaries payable. c. Current liabilities include revenue, unearned revenues, and salaries payable. d. Current liabilities include accounts payable, unearned revenues, and salaries payable. e. Current liabilities include expense, unearned revenues, and salaries payable.

Which statement is true? a. Assets need to depreciate include vehicle, machine, supplies, buildings b. Assets need to depreciate include van, machine, supplies, buildings c. Assets need to depreciate include machine, supplies, buildings d. Assets need to depreciate include vehicle, machine, buildings e. Assets need to depreciate include vehicle, supplies, buildings

Wisconsin Rentals purchased office supplies on credit. The general journal entry made by Wisconsin Rentals will include a: a. Debit to Accounts Payable. b. Debit to Accounts Receivable. c. Credit to Cash. d. Credit to Accounts Payable. e. Credit to Wisconsin Rentals, Capital.

A credit is used to record: a. A decrease in an expense account. b. A decrease in an asset account. c. An increase in an unearned revenue account. d. An increase in a revenue account. e. All of these.

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.

Acceptable inventory methods include: a. LIFO method. b. FIFO method. c. Specific identification method. d. Weighted average method. e. All of these.

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.

Adjusting entries are journal entries made at the end of an accounting period for the purpose of: a. Updating liability and asset accounts to their proper balances. b. Assigning revenues to the periods in which they are earned. c. Assigning expenses to the periods in which they are incurred. d. Assuring that financial statements reflect the revenues earned and the expenses incurred. e. All of these.

An adjusting entry could be made for each of the following except: a. Prepaid expenses. b. Depreciation. c. Supplies d. Unearned revenues. e. Owner capital

An adjusting entry could be made for each of the following except: a. Prepaid expenses. b. Supplies. c. Unearned revenues. d. Accrued expenses. e. Cost of goods sold

At the beginning of 2009, Beta Company's balance sheet reported Total Assets of $195,000 and Total Liabilities of $75,000. During 2009, the company reported total revenues of $226,000 and expenses of $175,000. Also, owner withdrawals during 2009 totaled $48,000. Assuming no other changes to owner's capital, the balance in the owner's capital account at the end of 2009 would be: a. $174,000. b. $78,000. c. Cannot be determined from the information provided. d. $120,000. e. $123,000.

Book value is equal to: a. Total asset cost minus depreciation expense b. Total asset cost plus depreciation expense c. Total asset plus depreciation expense d. Total asset minus depreciation expense e. None of these

Costs included in the Merchandise Inventory account can include: a. Invoice price minus any discount and allowance. b. Transportation-in. c. Storage. d. Duty tax e. All of these.

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

During a period of steadily rising costs, the inventory valuation method that yields the lowest reported net income is: a. Specific identification method. b. Average cost method. c. Weighted-average method. d. FIFO method. e. LIFO method.

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

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.

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

Merchandise inventories of the company include: a. Goods in transit b. Goods on consignments c. Goods in the stores of the company d. Finished goods produced for sale e. All of these.

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

PPW Co. leased a portion of its store to another company for eight months beginning on October 1, 2009, at a monthly rate of $800. This other company paid the entire $6,400 cash on October 1, which PPW Co. recorded as unearned revenue. The journal entry made by PPW Co. at year- end on December 31, 2009 would include: a. A debit to Rent Earned for $2,400. b. A credit to Unearned Rent for $2,400. c. A debit to Cash for $6,400. d. A credit to Cash for $2,400. e. A debit to Unearned Rent for $4,000.

Provide descriptions for this transaction: Credit cash $ 2,000 and Debit Account Payable $ 2,000 a. Buying for cash. b. Selling for cash. c. Selling on credit. d. Buying on credit. e. Paid accounts payable.

Provide descriptions for this transaction: Credit supplies $ 2,000 and Debit expense $ 2,000 a. None of these b. Selling supplies on credit worth of $2,000 c. Buying supplies for cash worth of $ 2,000 d. Buying supplies on credit worth of $ 2,000 e. Used supplies in business worth of $ 2,000

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

Shareholder's equity does not include a. Reserves b. Retained earnings c. Share capital d. Preference shares e. Contingent assets

Statement of retained earnings does not include: a. Dividends paid b. Transfer to general reserves c. Prior period adjustments d. Net income e. Revaluation of long-term investments

Tangible assets include: a. Vehicle b. Equipment. c. Buildings. d. Machinery. e. All of these.

The difference between the cost of an asset and the accumulated depreciation for that asset is called a. Depreciation Expense. b. Unearned Depreciation. c. Prepaid Depreciation. d. Depreciation Value. e. Book Value.

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

The value of an asset as it appears on a balance sheet, equal to cost minus accumulated depreciation is definition of: a. Depreciation cost b. Asset at cost c. Accumulated depreciation d. Depreciation expense e. Book value

Which accounts don't need to do closing entries? a. Revenue b. Expense c. Income Summary d. Withdrawals e. Current asset

Which accounts need to do closing entries? a. Close Revenue accounts to Income Summary b. Close Expense accounts to Income Summary c. Close Income Summary account to Owner's Capital. d. Close Withdrawals account to Owner's Capital e. All of these

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.

Which kind of account is accumulated depreciation? a. Asset account b. Liability account c. Equity account d. Temporary account e. Contra - asset account

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

Which of the following statements is incorrect? a. Adjustments to prepaid expenses, depreciation, and unearned revenues involve previously recorded assets and liabilities. b. Accrued expenses and accrued revenues involve assets and liabilities that had not previously been recorded. c. Adjusting entries can be used to record both accrued expenses and accrued revenues. d. Prepaid expenses, depreciation, and unearned revenues often require adjusting entries to record the effects of the passage of time. e. Adjusting entries affect the cash account.

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.

Which statement is true? a. The cost of an inventory item includes its invoice cost plus any discount, and plus any added costs necessary to put it in a place and condition for sale. b. The cost of an inventory item includes its invoice cost plus any discount, and minus any added costs necessary to put it in a place and condition for sale. c. The cost of an inventory item includes its invoice cost minus any discount, and minus any added costs necessary to put it in a place and condition for sale. d. The cost of an inventory item includes its invoice cost minus any discount e. The cost of an inventory item includes its invoice cost minus any discount, and plus any added costs necessary to put it in a place and condition for sale.

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.

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