Accounting

Given: Assets-Jan.1,2015 $320 Liabilities- Jan. 1, 2015 $140 Assets-Dec. 31, 2015 $350 Revenues in 2015 $75 Expenses in 2015 $60 ●2. What is Net income in 2015? A. $10 B.$15 C.$20 D.$75 E.$60

B. $15

A two year insurance policy in the amount of $2,400 was purchased on Feb 1, 2015 and was recorded by debiting the prepaid insurance account. At the end of its fiscal year at June 30, 2015, the firm will have to recognize insurance expense of : a. $2400 b. $500 c. $1900 d. $1100

B. $500

Giving the following: Beginning RE $58,000 Ending RE $60,000 Liabilities $42,000 Net Income $75,000 What is the amount of Dividend paid?

$73

How do you calculate liabilities at the end if the year ?

((Beginning Assets - Beginning Liabilites) + Net income) and subtract that from The ending assets.

A journal entry for a $75 payment for rent expense was posted as a debit to salary expense and a credit to cash. No other mistake was made. This error will cause which of the following conditions on the trial balance? A) The sum of the credits will still equal the sum of the debits. B) The sum of the debits will exceed the sum of the credits by $75. C) The sum of the debits will exceed the sum of the credits by $150. D) The sum of the credits will exceed the sum of the debits

A) The sum of the credits will still equal the sum of debits

During the year, EcoWash has $120,000 in revenues, $50,000 in expenses, and $4000 in dividends. Retained Earnings is changed by A.+$66000 B.+$70000 C.-$66000 D.+$74000

A. +$66000

On Oct. 1, Basher Company received $1,000 from a customer as advance payment for services to be rendered, and credited Unearned Revenues at the time of receipt. By Dec. 31, Basher had performed $750 of services. The adjusting journal entry at Dec.31 would include: A.A debit to unearned revenues for $750. B.A credit to unearned revenues for $750. C.A debit to unearned revenues for $250. D.A credit to unearned revenues for $250.

A. A debit to unearned revenues for $750

Those obligations of a firm that must be either paid in cash or settled by providing goods or services within one year are referred to as: A.Current liabilities. B.Accounts payable. C.Notes payable. D.Bonds payable. E.Current assets.

A. Current Liabilities

If a company's expenses are overstated (a)Net income is understated (b)Net income is overstated (c)Neither is true

A. Net income is understated

Which of the following financial statements illustrates the fundamental accounting equation? a. The Balance Sheet b. The Income Statement c. The Statement of Cash Flows d. The Statement of Owners Equity e. The Statement of Retained Earnings

A. The balance sheet

If a company forgets the adjusting entry of debit to rent expense and credit to prepaid rent then expenses are (a)Understated (b) Overstated (c) No effect

A. Understated

Purchasing a building for $110,000 by paying cash of $15000 and signing a note payable for $95000 will A.Increase both total assets and total liabilities by $95,000. B.Increase both total assets and total liabilities by $110,000. C.Decrease both total assets and total liabilities by $15,000. D.Decrease total assets and increase total liabilities by $15,000.

A. increase both total assets and total liabilities

Periodicity means per GAAP a. A year can be broken-up to monthly account periods b. Every year stands on its own c. One year follows the next

A.) A year can be broken-up to monthly account periods

Which account is a permanent or 'Real' account? a. Cash b. Service Revenue c. Dividends

A.) Cash

Income statements shows a. Profitability b. Assets c. Liabilities

A.) Profitability

Total assets equals total a. Total liabilities and total equity b. Total current liabilities and total long-term liabilities c. Total contributed capital and total earned capital

A.) Total liabilities and total equity

26) On August 1, 2015, Xcel Auto Repair, Inc. paid $6,000 for six months rent. After adjusting entries are made, what will be the balance of Prepaid Rent on December 31, 2015? A) $6,000 B) $1,000 C) $2,000 D) $4,000

B) $1,000

If net income is $80,000, dividend is $ 24,000, and ending RE balance is $105,000. How much is beginning RE? A) $81 B) $49 C) $1 D) $25

B) $49

The accountant for Hobson Electrical Repair Corporation failed to make an adjusting entry to record $5,000 of unpaid salaries for the last two weeks of the year. Which of the following is true? A) Total liabilities are overstated. B) Total liabilities are understated. C) Total assets are overstated. D) Total assets are understated.

B) Total Liabilities are understated

If 1 year of rent paid in advance on January 1. 2015 was debited to prepaid rent, what adjusting entry is needed to adjust on 1/31/2015? A.Debit prepaid rent, credit cash. B.Debit rent expense, credit prepaid rent. C.Debit rent expense, credit unearned rent. D.Office supplies expense.

B. Debit rent expense, credit prepaid rent

After initially recording a transaction, the data are then copied or posted to which of the following? a. Chart of Accounts b. Ledger c. Trial Balance d. Journal

B. Ledger

If a company forgets the adjusting entry of debit to rent expense and credit to prepaid rent then assets are (a)Understated (b) Overstated (c) No effect

B. Overstated

If a company forgets the adjusting entry of debit to rent expense and credit to prepaid rent then net income is (a)Understated (b)Overstated (c)No effect

B. Overstated

Which of the following accounts is increased with a debit? a. Unearned revenue b. Prepaid expense c. Service revenue d. Retained earnings

B. Prepaid expense

The Fundamental Accounting Equation is a. Assets = Account Payable + Retained Earnings b. Assets = Liabilities + Stockholders' Equity c. Assets = Retained Earnings + Common Stock

B.) Assets = Liabilities + Stockholders' Equity

At the end of the month these accounts are zeroed-out a. Assets, Liabilities and Equity accounts b. Expenses Revenues and Dividends c. Retained Earnings

B.) Expenses Revenues and Dividends

Which accounts have zero balances at the end of each month? a. Assets b. Revenues c. Liabilities

B.) Revenues

1. Which entity is part of the federal government? a. FASB b. SEC c. IASB

B.) SEC

Received utility bill, the bill will be paid at a later date: • No journal entry required, until payment is made. • Dr. Utility Expense, Cr. Cash • Dr. Utility Expense, Cr. Utility Payable • Dr. Utility Payable, Cr. Utility Expense

C Dr. Utility Expense, Cr. Utility Payable

An example of a contra- asset account is: a. Prepaid insurance b. Income summary c. Accumulated depreciation d. Taxes payable e. Unearned revenue

C. Accumulated depreciation

Which of the following journal entries would be recorded if a business received cash of $600 on account for services performed at an earlier date? A) Cash 600 Service Revenue 600 B) Accounts Receivable 600 Service Revenue 600 C) Cash 600 Accounts Receivable 600 D) Service Revenue 600 Accounts Receivable 600

C. Cash 600

Which accounts appear on which financial statement? Balance sheet Income statement A Receivables, land, payables Revenues, supplies B Cash, revenues, land Expenses, payables C Cash, receivables, payables Revenues, expenses D Expenses, payables, cash Revenues, receivables, land

C. Cash, receivables, payables, Revenues, expenses

A business acquires equipment for $140,000 on January 1. The equipment has a life of seven years and 0 salvage value. Which of the following is the adjusting entry required on December 31? A) Debit $140,000 to Equipment, credit $140,000 to Cash B) Debit $140,000 to Depreciation Expense, credit $140,000 to Accumulated Depreciation C) Debit $20,000 to Depreciation Expense, credit $20,000 to Accumulated Depreciation D) Debit $20,000 to Depreciation Expense, credit $20,000 to Equipment

C. Debit $20,000 to Depreciation Expense, Credit $20,000 to Accumulated Depreciation

Interest Revenue is a. An expense account b. An asset account c. A revenue account

C.) A revenue account

Dividends is a(n) a. Expense b. Revenue c. Cash payments to shareholders

C.) Cash Payments to shareholders

Received $700 in advance for 14 1-hour lessons. a. Dr Revenue 700; Cr Cash 700 b. Dr Cash 700; Cr Revenue 700 c. Dr Cash 700; Cr Unearned Revenue 700

C.) Dr Cash 700; Cr Unearned Revenue 700

Paid $12000 one-year's rent in advance. a. Dr Rent Expense 12,000; Credit Cash 12,000 b. Dr Rent Expense 1,000; Credit Cash 1,000 c. Dr Prepaid Rent 12,000; Credit Cash 12,000

C.) Dr Prepaid Rent 12,000; Credit Cash 12,000

Debits increase a. Liabilities b. Stockholders' Equity accounts c. Expenses

C.) Expenses

Posting is a. Recording transactions in journals b. Preparing a Trial Balance c. Recording journal entry amounts in general ledgers

C.) Recording journal entry amounts in general ledgers

The biggest reason for incorporating? a. Reduced taxes b. Reduced paperwork c. Shareholders' personal assets are protected from bankruptcy

C.) Shareholder's personal assets

In a journal entry debits must always equal...?

Credits

You subtract Debits from ?

Credits

Revenues total $10,200. Expenses total $7,300. Dividends declared and paid total $2,600. What is the balance in the revenuesaccount after closing the temporary accounts to retained earnings account? A) Credit balance of $2,900 B) Credit balance of $ 300 C) Credit balance of $10,200 D) Balance of $0

D) Balance of $0

Which of the following accounts would appear in the Balance Sheet debit column? A) Unearned service revenue B) Depreciation expense C) Service revenue earned D) Prepaid insurance

D) Prepaid Insurance

What must result if the revenues minus the expenses is less than the amount of the dividends paid? A) The retained earnings account increases. B) The company had positive net income. C) The company had a net loss. D) The retained earnings account decreases.

D) The retained earnings account decreases

During September, Amy's shop had revenue of $4,500 and expenses of $1,600, and $1,350 paid as dividends. If the Retained Earnings on September 30 was $9,000, the Retained Earnings on September 1 must have been: A.$10,550 B.$6,000 C.$11,000 D.$7,450.

D. $7,450

An increase in an expense account could be balanced in a journal entry by: A.A decrease in a revenue account. B.A decrease in a liability account. C.A decrease in equity. D.A decrease in an asset account.

D. A decrease in an asset account

Accrual basis accounting (a)Includes accounts receivable and accounts payable for the year. (b)Includes depreciation expense (c)Does not include deferred revenue (no services rendered). (d)All of the above

D. All of the above

Cash basis accounting means ? (a) Cash receipts minus cash expenses (b) Does not include credit sales and expenses incurred on credit. (c) Does not involve depreciation expense (d) All of the above.

D. All of the above

Paying on Accounts Payable would result in: •Dr. Cash, Cr. Accounts Payable •Dr. Accounts Payable, Cr. Unearned Revenue •Dr. Accounts Payable, Cr. Advertising Expense •Dr. Accounts Payable, Cr. Cash

D. Dr. Accounts Payable, Cr. Cash

At the end of an accounting period, the office supplies account shows a balance of $500, but the actual supplies on hand amount to only $300. If this situation calls for an adjusting entry, what account should be debited? A.Office supplies B.Office supplies payable. C.Unused office supplies D.Office supplies expense

D. Office supplies expense

You subtract Credits from ?

Debits

A characteristic feature of corporations is A.Limited liability for investors B.Ability to make contracts in its own name C.Ownership rights proportional to shares D.Articles of incorporation E.All of the above

E. All of the above

Which of the individuals listed below is most interested in financial statements produced in accord with generally accepted accounting principles (GAAP)? A.A manager involved in the operations of a business. B.A loan officer reviewing a loan application. C.An internal revenue agent reviewing the validity of a company's tax return. D.A potential stockholder of a corporation. E.B and D

E. B and D

If a company debits depreciation expense and credits accumulated depreciation for $1,000 instead of $100 by mistake, then (a)Expense is overstated (b)Net income is understated (c)No effect on revenues (d)Assets are understated (e)No effect on Liabilities (f)Stockholders equity is overstated (g)All of the above except (f) (h)All of the above

G. All of the above except (f)

Given: Assets-Jan.1,2015 $320 Liabilities- Jan. 1, 2015 $140 Assets-Dec. 31, 2015 $350 Revenues in 2015 $75 Expenses in 2015 $60 ●3. What are " Liabilities" at December 31, 2015 if no withdrawals or investments were made during the year? (use the information from 2) F.$125 G.$110 H.$170 I.$155

I. $155

Where overstatements and understatements found ?

In the general ledger or in the subsidiary journals

Understated amount

Indicate a reported amount it's not correct and the reported amount is less than the true amount.

Overstated amount

Indicate an incorrect reported amount that is higher than the true amount.

When adding Debits to Debits, you add them in the ?

Left side of the T

What his the formula for calculating Retained Earnings ?

Net income + previous retained earnings - dividends paid to shareholders

When adding Credits to Credits, you add them in the ?

Right side of the T

To get the balance in an account you ...?

Subtract the the subtotal of the smaller side of the T from the subtotal of the larger side and place the balance on the larger side.

Closing the books

To reduce the Temporary Accounts to 0 and transfer to Retained Earnings

Recognizing revenue

When it is earned

Matching Principle for expenses

When it occurs

Periodicity

measuring performance