Accounting Exam 1

On May 31 of the current year, the assets and liabilities of Riser, Inc. are as follows: Cash $20,500; Accounts Receivable, $7,250; Supplies, $650; Equipment, $12,000; Accounts Payable, $9,300. What is the amount of stockholders' equity as of May 31 of the current year? On May 31 of the current year, the assets and liabilities of Riser, Inc. are as follows: Cash $20,500; Accounts Receivable, $7,250; Supplies, $650; Equipment, $12,000; Accounts Payable, $9,300. What is the amount of stockholders' equity as of May 31 of the current year?

$31,100

The Retained Earnings account has a credit balance of $37,000 before closing entries are made. If total revenues for the period are $55,200, total expenses are $39,800, and dividends are $9,000, what is the ending balance in the Retained Earnings account after all closing entries are made?

$43,400

If equity is $300,000 and liabilities are $192,000, then assets equal: A. $108,000. B. $192,000. C. $492,000. D. $300,000. E. $792,000.

$492,000

On October 1, Goodwell Company rented warehouse space to a tenant for $2,500 per month and received $12,500 for five months' rent in advance on that date. The collection was credited to the Unearned Rent account. The company's annual accounting period ends on December 31. The Unearned Rent account balance at the end of December, after adjustment, should be

$5,000

Rico's Taqueria had cash inflows from operating activities of $27,000; cash outflows from investing activities of $22,000, and cash outflows from financing activities of $12,000. Calculate the net increase or decrease in cash.

$7,000 decrease

On May 31, the Cash account of Bottle's R Us had a normal balance of $5,000. During May, 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 May?

A $4,300 debit balance.

A business uses a credit to record:

A decrease in an asset account

Ralph Pine Consulting received its telephone bill in the amount of $300 and immediately paid it. Pine's general journal entry to record this transaction will include a: A. Debit to Telephone Expense for $300. B. Credit to Accounts Payable for $300. C. Debit to Cash for $300. D. Credit to Telephone Expense for $300. E. Debit to Accounts Payable for $300.

A. Debit to Telephone Expense for $300.

The adjusted trial balance contains information pertaining to:

All general ledger accounts

When closing entries are made:

All temporary accounts are closed but permanent accounts are not closed.

Grandmark Printing pays $2,000 rent to the landlord of the building where its facilities are located. How does this transaction affect the accounting equation for Grandmark A. Assets would decrease $2,000 and liabilities would decrease $2,000 B. Assets would decrease $2,000 and equity would decrease $2,000 C. Assets would increase $2,000 and equity would increase $2,000 D. Assets would increase $2,000 and liabilities would increase $2,000 E. Liabilities would decrease $2,000 and equity would increase $2,000

B. Assets would decrease $2,000 and equity would decrease $2,000

A debit is used to record an increase in all of the following accounts except: A. Supplies B. Cash C. Accounts Payable D. Dividends E. Prepaid Insurance

C. Accounts Payable

The accounting equation for Long Company shows an increase in its assets and an increase inits liabilities. Which of the following transactions could have caused that effect? A.Cash was received from providing services to a customer. B. Cash was received in exchange for common stock. C. Equipment was purchased on credit. D. Supplies were purchased for cash. E. Advertising expense for the month was paid in cash.

C. Equipment was purchased on credit.

Select the account below that normally has a credit balance. A. Cash. B. Office Equipment. C. Wages Payable. D. Dividends. E. Sales Salaries Expense.

C. Wages Payable.

The Income Summary account is used to

Close the revenue and expense accounts.

Willow Rentals purchased office supplies on credit. The general journal entry made by Willow Rentals will include a:

Credit to Accounts Payable.

Richard Redden contributed $70,000 in cash and land worth $130,000 to open a new business, RR Consulting, Inc. Which of the following general journal entries will RR Consulting, Inc. make to record this transaction?

Debit Cash $70,000; debit Land $130,000; credit Common Stock, $200,000.

On January 1, Imlay Company purchases manufacturing equipment costing $95,000 that is expected to have a five-year life and an estimated salvage value of $5,000. Imlay uses the straight-line depreciation method to allocate costs. The adjusting entry needed on December 31 of the first year is:

Debit Depreciation Expense, $18,000; credit Accumulated Depreciation, $18,000.

A company pays each of its two office employees each Friday at the rate of $100 per day for a five-day week that begins on Monday. If the monthly accounting period ends on Tuesday and the employees worked on both Monday and Tuesday, the month-end adjusting entry to record the salaries earned but unpaid is:

Debit Salaries Expense $400 and credit Salaries Payable $400.

On December 31, 2015 Carmack Company received a $215 utility bill for December that it will not pay until January 15. The adjusting entry needed on December 31 to accrue this expense is:

Debit Utilities Expense $215; credit Accounts Payable $215

Which of the following accounts is not included in the calculation of a company's ending stockholders' equity? A. Revenues B. Expenses C. Dividends D. Common Stock E. Cash

E. Cash

A company made no adjusting entry for accrued and unpaid employee salaries of $9,000 on December 31. Which of the following statements is true? A. It will have no effect on income. B. It will overstate assets and liabilities by $9,000 C. It will understate net income by $9,000 D. It will understate assets by $9,000 E. It will understate expenses and overstate net income by $9,000

E. It will understate expenses and overstate net income by $9,000

Financial statements are typically prepared in the following order:

Income statement, statement of retained earnings, balance sheet

Unearned revenues are generally:

Liabilities created when a customer pays in advance for products or services before the revenue is earned.

If a company uses $1,300 of its cash to purchase supplies, the effect on the accounting equation would be: A. Assets increase $1,300 and liabilities decrease $1,300. B. One asset increases $1,300 and another asset decreases $1,300, causing no effect. C. Assets decrease $1,300 and equity decreases $1,300. D. Assets decrease $1,300 and equity increases $1,300. E. Assets increase $1,300 and liabilities increase $1,300

One asset increases $1,300 and another asset decreases $1,300, causing no effect.

The basic financial statements include all of the following except: A. Balance Sheet. B. Income Statement. C. Statement of Cash Flows. D. Statement of Retained Earnings. E. Statement of Changes in Assets

Statement of Changes in Assets

he right side of a T-account is a(n):

credit

Net income:

is the excess of revenue over expenses

The record of all accounts and their balances used by a business is called a:

ledger

An example of financial activity is:

obtaining a long-term loan