acct207

Company had beginning retained earnings of 2,242,000 and ending retained earnings of 2,499,000. During the year they issued common stock totaling $141,000. No dividends were paid. What waster net income for the year? A) $257,000 B) $116,000 C) $398,000 D) $323,000

A) $257,000 Stock is irrelevant when it involves net income

Reporting a net income of $95,000 will A) Increase retained earnings B) decrease retained earnings C) Increase common stock D) Decrease common stock

A)Increase retained earnings

Current Assets

Accounts receivable Cash Supplies Short-term investments Prepaid insurance

Working capital

Curren assets - current liabilities

The right to receive money in the future is called a(n) A) Account payable B) Account receivable C) Liability D) Revenue

B) Account receivable

An accountant has debited an asset account for $1,000 and credited a liability account $500. What can be done to complete the recording of the transaction? A) Nothing further must be done B) Debit a stockholders' equity account for $500 C) Debit another asset account for $500 D) Credit a different asset account for $500

B) Debit a stockholders equity account for $500

When a company performs a service but has not yet received payment, it A) Debits service revenue ad credits accounts receivable B) Debits accounts receivable and credits service revenue C) Debits service revenue and credits accounts payable D) makes no entry until cash is received

B) Debits accounts receivable and credits service revenue

Declaring a cash dividend will A) Increase retained earnings B) Decrease retained earnings C) Increase common stock D) Decrease common stock

B) Decrease retained earnings

Dividends are reported on the A) Income statement B) Retained earnings statement C) Balance sheet D) Income statement and balance sheet

B) Retained earnings statement

The usual sequence of steps in the transaction recording process is A) Journalize, analyze, post to the ledger B) Analyze, journalize, post to the ledger C) Journalize, post to the ledger, analyze D) Post to the ledger, journalize, analyze

B) analyze, journalize, post to the ledger

The relationship between current assets and current liabilities is important in evaluating a company's A) Profitability B) Liquidity C) Market Value D) Solvency

B)Liquidity

The common characteristic possessed by all assets is A) Long life B) Great monetary value C) Tangible nature D) Future economic benefit

D) Future economic benefit

The best definition of assets is the A) Cash owned by the company B) Collections of resources belonging to the company and the claims on these resources C) Owner's investment in the business D) Resources belonging to a company that have future benefit to the company

D) Resources belonging to a company that have future benefit to the company

Architecture firm earned $2,000 for services provided with the fee to be paid in the future. No entry was made at the time the service was provided. If they did no receive payment by the end of accounting period what would happen A) Revenues to be overstated B) Net income to be overstated C) Liabilities to be understated D) Revenues to be understated

D) Revenues to be understated

The unearned service revenue account is classified as a(n) A) Asset B) Revenue C) Expense D) liability

D) liability

Adjusting entries affect at least: A) One revenue and one expense account B) One asset and one liability account C) One revenue and one balance sheet account D) One income statement account and one balance sheet account

D) one income statement account and one balance sheet account

Expenses are incurred A) Only on rare occasions B) To produce assets C) To produce liabilities D) To generate revenues

D) to generate revenues

The liability created by a business when it purchases coffee beans and coffee cups on credit from suppliers is termed a(n) A) Account payable B) Account receivable C) Revenue D) Expense

A) Account payable

Which of the following accounts probably would be listed before the others in a chart of accounts? A) Accumulated depreciation- Buildings B) Insurance expense C) Dividends D) Notes payable

A) Accumulated depreciation- buildings

A company that receives money in advance of performing a service A) debits cashand credits unearned revenue B) debits unearned service revenue and credits accounts payable C) debits cash and credits prepaid insurance D) debits cash and credits accounts receivable

A) debits cash and credits unearned service revenue

The purpose of the ledger is to A) Record chronologically the day''s transactions B) Keep a record of documentation to support each transaction C) Keep in one place all information about changes in specific account balances D) Make sure that all assets, liabilities,etc. have normal balances at all times

C) Keep in one place all information about changes in specific account balances

Which of the following clarifies information presented in the financial statements, as well as expanding upon it where additional detail is needed? A) Auditor's report B) Management discussion and analysis section C) Notes on the financial statements D) President's state of the company report

C) Notes to the financial statements

The most important information needed to determine if companies can pay their current obligations is the: A) Net income for this year B) Projected net income for next year C) Relationship between current assets and current liabilities D) Relationship between short-term and long-term liabilities

C) Relationship between current assets and current liabilities

Ending retaied earning for a period is equal to beginning A) Retained earnings + net income +dividends B) Retained earnings - net income - dividends C) Retained earnings + net income - dividends D) Retained earnings - net income +dividends

C) Retained earnings + net income - dividends

The best interpretation of the word "credit" is the A) Offset side of an account B) Increase side of an account C) Right side of an account D) Decrease side of an account

C) Right side of an account

An adjusting entry can include a a) debit to an asset and a credit to a liability b) debit to a revenue and a credit to an asset c) debit to a liability and a credit to a revenue d) debit to an expense and a credit to a revenue

C) debit to a liability and credit to a revenue

Current Liabilities

Notes payable (short-term) Accounts payable Salary/Wages payable Unearned service revenue

In recording an accounting transaction in a double-entry system a) The number of of debit accounts must equal the number of credit accounts b) There must always be entries made on both sides of the accounting equation c) The amount of the debits must equal the amount of the credits d) There must only be two accounts affected by any transaction

c) the amount of debits must equal the amount of credits