ACC211 Exam 1

The following transactions occurred during July: Received $1,030 cash for services provided to a customer during July. Collected $4,600 cash for services previously completed in June. Received $880 from a customer in partial payment of his account receivable which arose from sales in June. Provided services to a customer on credit, $505. Borrowed $7,300 from the bank by signing a promissory note. Received $1,380 cash from a customer for services to be performed next year. What was the amount of revenue for July?

$1,535.

A company opened on January 1 of the current year. During January, the following transactions occurred and were recorded in the company's books: The company received $14,400 cash for services provided. The company paid $3,000 cash for an insurance policy covering the next 24 months. The company received $6,600 cash for services provided. The company purchased $7,100 of office equipment on credit. The company provided $3,650 of services to customers on account. The company paid cash of $2,400 for monthly rent. The company paid $4,000 on the office equipment purchased in transaction #5 above. Paid $365 cash for January utilities. Based on this information, the balance in the cash account at the end of January would be:

$11,235.

The following information is available from the adjusted trial balance of the Harris Vacation Rental Agency. After closing entries are posted, what will be the balance in the Retained earnings account? Total revenues $ 115,000 Total expenses 55,200 Retained earnings 73,600 Dividends 13,800

$119,600.

Nexis had beginning equity of $85,000; revenues of $129,000, and expenses of $88,300. The company had no other transactions impacting equity. Calculate the ending equity.

$125,700.

A company is considering purchasing a parcel of land that was originally acquired by the seller for $90,000. While the land is currently offered for sale at $160,000, it is considered by the purchaser as easily being worth $150,000, and is finally purchased for $147,000, the land should be recorded in the purchaser's books at:

$147,000

Determine the net income of a company for which the following information is available for the month of September. Service revenue$ 330,000 Rent expense63,000 Utilities expense4,700 Salaries expense96,000

$166,300.

The following information is available for Cubic Company before closing the accounts. After all closing entries are made, what will be the balance in the Retained earnings account? Net income $ 110,400 Retained earnings 106,000 Dividends 39,000

$177,400.

The following information is available for the Higgins Travel Agency. After closing entries are posted, what will be the balance in the Retained earnings account? Net Income $ 59,500 Retained Earnings 138,500 Dividends 18,800

$179,200.

Determine the net income of a company for which the following information is available for the month of July. Employee salaries expense$ 181,000 Interest expense11,000 Rent expense21,000 Consulting revenue404,000

$191,000.

If assets are $390,000 and liabilities are $198,000, then equity equals:

$192,000.

On April 1, Otisco, Incorporated paid Garcia Publishing Company $2,880 for 36-month subscriptions to several different magazines. Otisco debited the prepayment to a Prepaid Subscriptions account, and the subscriptions started immediately. What amount should appear in the Prepaid Subscription account for Otisco, Incorporated after adjustments on December 31 of the first year assuming the company is using a calendar-year reporting period and no previous adjustment has been made?

$2,160.

Charlie's Chocolates' has accounts receivable of $52,000 and accounts payable of $21,000. The company has revenues of $85,000 and expenses of $65,000. Calculate its net income.

$20,000.

A $24 credit to Revenue was posted as a $240 credit. By what amount is the Revenue account in error?

$216 overstated

A company had no office supplies available at the beginning of the year. During the year, the company purchased $320 worth of office supplies. On December 31, $100 worth of office supplies remained. How much should the company report as office supplies expense for the year?

$220.

The following information is available for the Noir Detective Agency. After closing entries are posted, what will be the balance in the Retained earnings account? Net Loss $ 30,600 Retained earnings 295,500 Dividends 37,200

$227,700.

Lito Company had cash inflows from operating activities of $44,000; cash outflows from investing activities of $39,000, and cash outflows from financing activities of $29,000. Calculate the net increase or decrease in cash.

$24,000 decrease.

Use the following information for Meeker Corporation to determine the amount of equity to report. Cash$ 55,000 Buildings117,500 Land198,000 Liabilities123,500

$247,000.

At the end of its first month of operations, a company reported Revenue of $38,800. It also reported Wages Expense, $6,600; Rent Expense, $5,600; and Utilities Expense, $1,300. Calculate net income reported on the income statement at month-end.

$25,300

During March, the following transactions occurred: The company paid $3,900 cash to rent office space for the month of March. The company received $35,000 cash for repair services provided during March. The company paid $8,100 for salaries for the month of March. The company provided $4,900 of services to customers on account. The company paid cash of $2,400 for utilities for the month of March. The company received $5,000 cash in advance from a customer for repair services to be provided in April. The company purchased $6,900 of land for cash. Based on this information, net income for March would be:

$25,500.

If assets are $401,000 and equity is $138,000, then liabilities are:

$263,000.

A company reported total equity of $147,000 at the beginning of the year. The company reported $212,000 in revenues and $166,000 in expenses for the year. Liabilities at the end of the year totaled $93,000. What are the total assets of the company at the end of the year?

$286,000.

Zinc has beginning equity of $267,000, total revenues of $67,000, and total expenses of $45,000. The company has no other transactions impacting equity. Its ending equity is:

$289,000.

On July 1, a company paid the $6,000 premium on a one-year insurance policy with benefits beginning on that date. What will be the insurance expense on the annual income statement for the first year ended December 31?

$3,000.

A company pays its employees $3,850 each Friday, which amounts to $770 per day for the five-day work week that begins on Monday. If the monthly accounting period ends on Thursday and the employees worked through Thursday, the amount of salaries earned but unpaid at the end of the accounting period is:

$3,080.

On January 1, a company purchased new furniture at a cost of $19,000. The furniture is estimated to have a useful life of 5 years and a salvage value of $2,500. The company uses the straight-line method of depreciation. How much depreciation expense will be recorded for the furniture for the first year ended December 31?

$3,300

On November 1, Jasper Company loaned another company $260,000 at a 9% interest rate. The note receivable plus interest will not be collected until March 1 of the following year. The company's annual accounting period ends on December 31. The amount of interest revenue that should be reported in the first year is:

$3,900.

On August 31 of the current year, the assets and liabilities of Gladstone, Incorporated are as follows: Cash $30,600; Supplies, $650; Equipment, $10,400; Accounts Payable, $9,000. What is the amount of equity as of August 31 of the current year?

$32,650.

Darden has beginning equity of $289,000, total revenues of $75,000, and total expenses of $37,000. The company has no other transactions impacting equity. The company's ending equity is:

$327,000.

On January 1, Northern College received $1,310,000 from its students for the spring semester that it recorded in Unearned Revenue. The term spans four months beginning on January 1 and the college earns the revenue evenly over the months of the term. Assuming the college prepares adjustments on January 31, what amount of tuition revenue should the college recognize for the month of January?

$327,500.

On May 31 of the current year, the assets and liabilities of Riser, Incorporated are as follows: Cash $22,000; Accounts Receivable, $7,500; Supplies, $850; Equipment, $12,250; Accounts Payable, $9,550. What is the amount of equity as of May 31 of the current year?

$33,050.

Use the following information as of December 31 to determine equity. Cash$ 76,000 Buildings194,000 Equipment225,000 Liabilities160,000

$335,000.

High Step Shoes had annual revenues of $194,000, expenses of $108,200, and paid dividends of $21,600 during the current year. The retained earnings account before closing had a balance of $306,000. The ending retained earnings balance after closing is:

$370,200

A company's balance sheet shows cash of $26,000, accounts receivable of $32,000, equipment of $54,000, and equity of $74,000. What is the amount of liabilities?

$38,000.

The Retained earnings account has a credit balance of $31,450 before closing entries are made. If total revenues for the period are $97,700, total expenses are $72,100, and dividends are $16,650, what is the ending balance in the Retained earnings account after all closing entries are made?

$40,400.

Zippy had cash inflows from operating activities of $66,500; cash outflows from investing activities of $51,000; and cash inflows from financing activities of $29,000. The net change in cash was:

$44,500 increase.

Marco Nelson opened a frame shop and completed these transactions: Sold custom frames and immediately collected $41,200 cash for the sale. Purchased $190 of office supplies on credit. Paid $2,400 cash for the receptionist's salary. Sold a custom frame service and collected $5,700 cash on the sale. Completed framing services and billed the client $320. What was the balance of the cash account after these transactions were posted?

$44,500.

During the month of February, Rubio Services had cash receipts of $8,200 and cash payments of $10,000. The February 28 cash balance was $3,200. What was the February 1 beginning cash balance?

$5,000.

The assets of a company total $710,000; the liabilities, $205,000. What is the amount of equity?

$505,000.

On April 30, Gomez Services had an Accounts Receivable balance of $24,600. During the month of May, total credits to Accounts Receivable were $59,200 from customer payments. The May 31 Accounts Receivable balance was $19,000. What was the amount of credit sales during May?

$53,600.

Cash$ 18,400 Total equity 37,200 Accounts receivable 16,900 Services revenue 39,400 Equipment 22,900 Rent expense 9,400 Accounts payable 12,400 Wages expense 21,400

$58,200.

A company had the following accounts and balances at December 31: (look at pic) Using the information in the table, calculate the company's reported net income for the period.

$6,130.

At the beginning of January of the current year, Sorrel Company's ledger reflected a normal balance of $66,000 for accounts receivable. During January, the company collected $17,600 from customers on account and provided additional services to customers on account totaling $13,900. Additionally, during January one customer paid Mikey $6,400 for services to be provided in the future. At the end of January, the balance in the accounts receivable account should be:

$62,300.

If equity is $430,000 and liabilities are $201,000, then assets equal:

$631,000.

On April 1, Garcia Publishing Company received $2,628 from Otisco, Incorporated for 36-month subscriptions to several different magazines. The subscriptions started immediately. What is the amount of revenue that should be recorded by Garcia Publishing Company for the first year of the subscription assuming the company uses a calendar-year reporting period?

$657.00.

On October 1, Vista View Company rented warehouse space to a tenant for $3,700 per month and received $18,500 for five months' rent in advance on that date, with the lease beginning immediately. The cash receipt was credited to the Unearned Revenue account. The company's annual accounting period ends on December 31. The Unearned Revenue account balance at the end of December, after adjustment, should be:

$7,400.

If assets are $108,000 and liabilities are $37,000, then equity equals:

$71,000.

During the month of March, Harley's Computer Services made purchases on account totaling $44,500. Also, during the month of March, Harley was paid $9,500 by a customer for services to be provided in the future and paid $37,400 of cash on its accounts payable balance. If the balance in the accounts payable account at the beginning of March was $77,800, what is the balance in accounts payable at the end of March?

$84,900.

High Step Shoes had annual revenues of $193,000, expenses of $107,700, and paid dividends of $21,200 during the current year. The retained earnings account before closing had a balance of $305,000. The Net Income for the year is:

$85,300

Doc's Ribhouse had beginning equity of $62,500; net income of $23,000. The company has no other transactions impacting equity. Calculate the ending equity.

$85,500.

On May 1, a two-year insurance policy was purchased for $28,800 with coverage to begin immediately. What is the amount of insurance expense that would appear on the company's income statement for the first year ended December 31?

$9,600.

If Bojana Tax Services' office supplies account balance on March 1 was $1,750, the company purchased $500 of supplies during the month, and a physical count of supplies on hand at the end of March indicated $1,350 unused, what is the amount of the adjusting entry for office supplies on March 31?

$900

A company's balance sheet shows: Cash $38,000, Accounts receivable $24,000, Office equipment $58,000, and Accounts payable $25,000. What is the amount of total equity?

$95,000.

Ch1 MCQs

1

Speedy Company has net income of $22,955, and assets at the beginning of the year of $204,000. Assets at the end of the year total $250,000. Compute its return on assets.

10.1%.

Cage Company had net income of $361 million and average total assets of $2,030 million. Its return on assets (ROA) is:

17.8%.

CH2 MCQs

2

Chou Company has a net income of $62,000, assets at the beginning of the year are $269,000 and assets at the end of the year are $319,000. Compute its return on assets.

21.1%.

Sanders Company has total assets of $413 million. Its total liabilities are $114.1 million, and its equity is $298.9 million. Calculate its debt ratio. (Round your answer to 1 decimal place.)

27.6%.

A company reported net income of $3,920 for October. Its net sales for October were $14,000. Its profit margin is:

28%.

Jennings Company has total assets of $465 million. Its total liabilities are $130.5 million. Its equity is $334.5 million. Calculate the debt ratio. (Round your answer to 1 decimal place.)

28.1%.

CH3 MCQs

3

At the beginning of the current year, Snell Company's total assets were $248,800 and its total liabilities were $173,800. During the year, the company reported total revenues of $93,000 and total expenses of $81,000. There were no other changes in total equity during the year, and total assets at the end of the year were $260,800. The company's debt ratio at the end of the current year is:

66.6%.

Cruz Company had revenues of $82,000 and expenses of $51,000 for the year. Its assets at the beginning of the year were $401,000. At the end of the year, assets were worth $451,000. Calculate its return on assets.

7.3%.

Flitter reported net income of $19,000 for the past year. At the beginning of the year the company had $203,000 in assets and $53,000 in liabilities. By year end, assets had increased to $303,000 and liabilities were $78,000. Calculate its return on assets:

7.5%.

At the end of the current year, James Company reported total liabilities of $303,000 and total equity of $103,000. The company's debt ratio was:

74.6%.

Rush Company had net income of $174 million and average total assets of $1,890 million. Its return on assets (ROA) is:

9.2%.

Identify which error will cause the trial balance to be out of balance.

A $250 cash receipt from a customer in payment of her account posted as a $250 debit to Cash and a $25 credit to Accounts Receivable.

On May 31, the Cash account of Tesla had a normal balance of $6,100. During May, the account was debited for a total of $13,300 and credited for a total of $12,600. What was the balance in the Cash account at the beginning of May?

A $5,400 debit balance.

Fragment Company leased a portion of its store to another company for eight months beginning on October 1, at a monthly rate of $950. Fragment collected the entire $7,600 cash on October 1 and recorded it as unearned revenue. Assuming adjusting entries are only made at year-end, the adjusting entry made on December 31 would be:

A debit to Unearned Revenue and a credit to Rent Revenue for $2,850.

On July 1 of the current calendar year, Olive Company paid $8,400 cash for management services to be performed over a two-year period beginning July 1. The adjusting entry on December 31 of the current year for Olive would include:

A debit to an expense and a credit to a prepaid expense for $2,100.

On January 1 of the current year, Jimmy's Sandwich Company reported total equity of $127,000. During the current year, total revenues were $104,000, while total expenses were $113,500. No other changes in equity occurred during the year. The change in total equity during the year was:

A decrease of $9,500.

Ted Catering received $1,160 cash in advance from a customer for catering services to be provided in three months. Determine the general journal entry that Ted Catering will make to record the cash receipt.

Account Title Debit Cash 1,160 Credit Unearned Revenue 1,160

Adriana Graphic Design receives $1,650 from a client billed in a previous month for services provided. Which of the following general journal entries will Adriana Graphic Design make to record this transaction?

Account Title Debit Cash 1,650 Credit Accounts Receivable 1,650

Sara's Studio provided $280 of dance instruction and rented out its dance studio to the same client for another $165. The client paid cash immediately. Identify the general journal entry below that Sara's Studio will make to record the transaction.

Account Title Debit Cash445 Credit Rental Revenue 165 & Instruction Revenue 280

A company purchased $1,900 of supplies on credit. Identify the general journal entry below that the company will make to record the transaction.

Account Title Debit Supplies 1,900 Credit Accounts Payable 1,900

Specter Consulting purchased $7,800 of supplies and paid cash immediately. Which of the following general journal entries will Specter Consulting make to record this transaction?

Account Title Debit Supplies 7,800 Credit Cash 7,800

A company paid $2,200 cash for this month's utilities. Identify the general journal entry below that the company will make to record the transaction.

Account Title Debit Utilities Expense 2,200 Credit Cash 2,200

Jose Consulting paid $580 cash for utilities for the current month. Determine the general journal entry that Jose Consulting will make to record this transaction.

Account Title Debit Utilities Expense 580 Credit Cash 580

Russell Company collected cash of $620 immediately after providing consulting services to a client. Which of the following general journal entries will Russell Company make to record this transaction?

Account Title Debit Cash 620 Credit Consulting Revenue 620

Saddleback Company paid off $35,000 of its accounts payable in cash. What would be the effects of this transaction on the accounting equation?

Assets decrease $35,000; liabilities decrease $35,000.

If a company receives $13,500 from a client for services provided, the effect on the accounting equation would be:

Assets increase $13,500 and equity increases $13,500.

If a company purchases equipment costing $4,300 on credit, the effect on the accounting equation would be:

Assets increase $4,300 and liabilities increase $4,300.

Echo Company has assets of $624,000, liabilities of $262,000, and equity of $362,000. It buys office equipment on credit for $87,000. What would be the effects of this transaction on the accounting equation?

Assets increase by $87,000 and liabilities increase by $87,000.

If the liabilities of a company increased $78,000 during a period of time and equity in the company decreased $21,000 during the same period, what was the effect on the assets?

Assets would have increased $57,000.

GreenLawn Company provides landscaping services to clients. On May 1, a customer paid GreenLawn $64,000 for 6-months services in advance. GreenLawn's general journal entry to record this transaction will include a:

Credit to Unearned Revenue for $64,000.

A law firm billed a client $2,400 for work performed in the current month. Which of the following general journal entries will the firm make to record this transaction?

Debit Accounts Receivable, $2,400; credit Services Revenue, $2,400

Alicia Tax Services paid $590 to settle an account payable. Which of the following general journal entries will Alicia Tax Services make to record this transaction?

Debit Accounts payable, $590; credit Cash, $590.

A company receives $9,500 cash for performing landscaping services. Which of the following general journal entries will the company make to record this transaction?

Debit Cash $9,500; credit Landscaping Revenue, $9,500.

A law firm collected $2,500 in advance for work to be performed in three months. Which of the following general journal entries will the firm make to record this transaction?

Debit Cash, $2,500; credit Unearned Revenue, $2,500.

A law firm collected $3,600 on account for work performed and billed in the previous month. Which of the following general journal entries will the firm make to record this collection of cash?

Debit Cash, $3,600; credit Accounts Receivable, $3,600.

For the year ended December 31, a company had services revenue of $192,000 and wages expense of $115,200. Dividends of $38,400 were paid during the year. Which of the following entries could not be a closing entry?

Debit Income Summary $192,000; credit Services Revenue $192,000.

The Retained earnings account has a credit balance of $43,000 before closing entries are made. Services revenue for the period is $61,200, wages expense is $42,800, and dividends are $11,400. What is the correct closing entry for the expense accounts?

Debit Income Summary $42,800; credit Wages Expense $42,800.

A company had services revenues of $53,000 and expenses of $43,000 for the accounting period. Dividends of $5,850 were paid in cash during the same period. Which of the following entries could not be a closing entry?

Debit Income Summary $53,000; credit Services Revenue $53,000.

High Step Shoes had annual revenues of $200,000, expenses of $111,200, and dividends of $24,000 during the current year. The retained earnings account before closing had a balance of $312,000. The entry to close the Income Summary account at the end of the year, after revenue and expense accounts have been closed, is:

Debit Income Summary $88,800; credit Retained Earnings $88,800

Harrod Company paid $5,100 for a 4-month insurance premium in advance on November 1, with coverage beginning on that date. The balance in the prepaid insurance account before adjustment at the end of the year is $5,100, and no adjustments had been made previously. The adjusting entry required on December 31 is:

Debit Insurance Expense, $2,550; credit Prepaid Insurance, $2,550.

On January 1, a company purchased a five-year insurance policy for $3,100 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:

Debit Insurance Expense, $620; credit Prepaid Insurance, $620.

On December 1, Milton Company borrowed $470,000, at 6% annual interest, from the Tennessee National Bank. Interest is paid when the loan matures one year from the issue date. What is the adjusting entry for accruing interest that Milton would need to make on December 31, the calendar year-end?

Debit Interest Expense, $2,350; credit Interest Payable, $2,350.

On September 1, Kennedy Company loaned $138,000, at 13% annual interest, to a customer. Interest and principal will be collected when the loan matures one year from the issue date. Assuming adjustments are only made at year-end, what is the adjusting entry for accruing interest that Kennedy would need to make on December 31, the calendar year-end?

Debit Interest Receivable, 5,980; credit Interest Revenue, $5,980.

Prior to recording adjusting entries, the Office Supplies account had a $390 debit balance. A physical count of the supplies showed $97 of unused supplies available. The required adjusting entry is:

Debit Office Supplies Expense $293 and credit Office Supplies $293.

Green Cleaning purchased $520 of office supplies on credit. The company's policy is to initially record prepaid and unearned items in balance sheet accounts. Which of the following general journal entries will Green Cleaning make to record this transaction?

Debit Office supplies, $520; credit Accounts payable, $520.

After preparing and posting the closing entries for revenues and expenses, the income summary account has a debit balance of $29,000. The entry to close the income summary account will be:

Debit Retained Earnings $29,000; credit Income Summary $29,000.

For the year ended December 31, a company has revenues of $334,000 and expenses of $204,500. The company paid $56,800 in dividends during the year. The balance in the Retained earnings account before closing is $98,000. Which of the following entries would be used to close the dividends account?

Debit Retained Earnings $56,800; credit Dividends $56,800.

Castillo Services paid K. Castillo, the sole shareholder of Castillo Services, $6,800 in dividends during the current year. The entry to close the dividends account at the end of the year is:

Debit Retained Earnings $6,800; credit Dividends $6,800

The correct adjusting entry for accrued and unpaid employee salaries of $9,700 on December 31 is:

Debit Salary Expense, $9,700; credit Salaries Payable, $9,700.

The Retained earnings account has a credit balance of $47,000 before closing entries are made. Services revenue for the period is $65,200, wages expense is $44,800, and dividends are $13,000. What is the correct closing entry for the revenue accounts?

Debit Services Revenue $65,200; credit Income Summary $65,200.

A physical count of supplies on hand at the end of May for Masters, Incorporated indicated $1,251 of supplies available. The general ledger balance before any adjustment is $2,110. What is the adjusting entry for supplies that should be recorded on May 31?

Debit Supplies Expense $859 and credit Supplies $859.

A company purchased $21,700 of supplies on credit. The journal entry to record this transaction consists of a:

Debit Supplies for $21,700; credit Accounts Payable for $21,700.

A bookkeeper has debited an asset account for $4,900 and credited a liability account for $2,700. Which of the following would be an incorrect way to complete the recording of this transaction:

Debit another asset account for $2,200.

Edison Consulting received a $380 utilities bill and immediately paid it. Edison's general journal entry to record this transaction will include a:

Debit to Utilities Expense for $380.

If the assets of a business increased $115,000 during a period of time and its liabilities increased $80,000 during the same period, equity in the business must have:

Increased $35,000.

If the liabilities of a business increased $101,000 during a period of time and equity in the business decreased $43,000 during the same period, the assets of the business must have:

Increased $58,000.

If a company uses $1,540 of its cash to purchase supplies, the effect on the accounting equation would be:

One asset increases $1,540 and another asset decreases $1,540, causing no effect.

If Dallas Company billed a client for $23,000 of consulting work completed, the accounts receivable asset increases by $23,000 and:

Revenue increases $23,000.

A $310 credit to Supplies was credited to Revenue by mistake. By what amounts are the accounts under- or overstated as a result of this error?

Supplies, overstated $310; Revenue, overstated $310.

At year-end, a trial balance showed total credits exceeding total debits by $5,000. This difference could have been caused by:

The balance of $5,560 in the Office Equipment account being mistakenly entered on the trial balance as a debit of $560.

Identify the item below that would cause the trial balance to not balance?

The cash payment of a $1,010 account payable was posted as a debit to Accounts Payable and a debit to Cash for $1,010.

The credit purchase of a new oven for $6,100 was posted to Kitchen Equipment as a $6,100 debit and to Accounts Payable as a $6,100 debit. What effect would this error have on the trial balance?

The total of the Debit column of the trial balance will exceed the total of the Credit column by $12,200.

On December 1, Oren Marketing Company received $6,600 from a customer for a 2-month marketing plan to be completed January 31 of the following year. The cash receipt was recorded as unearned revenue. The adjusting entry for the year ended December 31 would include:

a debit to Unearned Revenue for $3,300.

On April 1, Garcia Publishing Company received $26,280 from Otisco, Incorporated for 36-month subscriptions to several different magazines. The company credited Unearned Revenue for the amount received and the subscriptions started immediately. Assuming adjustments are only made at year-end, what is the adjusting entry that should be recorded by Garcia Publishing Company on December 31 of the first year?

debit Unearned Revenue, $6,570; credit Subscription Revenue, $6,570.

end of MCQs

end