HM 335 exam 1
C
Which of the following is prepared last? A) trial balance B) statement of owner's equity C) balance sheet D) income statement
A
Financial statements that are prepared for a period shorter than a year are called: A) interim statements B) accounting period statements C) operating statements D) fiscal year statements
A
How are credits distinguished from debits in the journal? A) indenting B) a line separation C) a different color D) there is no distinction
B
Bringing account balances up to date before preparing financial reports is called: A) journalizing B) adjusting C) analyzing D) posting
A
Business transactions are first recorded in the: A) journal B) trial balance C) ledger D) income statement
C
The purchase of supplies for cash would affect which account category? A) capital B) expense C) assets D) liabilities
A
A chart of accounts: A) is a listing of all the accounts used by a company B) is set up in alphabetical order C) includes account balances D) all of the above
D
A contra-asset is: A) a liability B) an account that increases the asset C) an asset with a debit balance D) an account with an opposite balance of a normal asset
C
A credit to an asset account was posted to a revenue account. This would cause: A) liabilities to be overstated B) capital to be understated C) revenue to be overstated D) assets to be understated
A
A form used to organize and check data before preparing financial reports is known as a: A) worksheet B) trial balance C) income statement D) ledger
C
A ledger: A) can replace the financial statements B) is the same as a chart of accounts C) is a group of accounts and their balances D) none of the above
D
Accounting provides information to: A) investors B) managers C) government D) all of the above
B
Accumulated depreciation is found on which if the following financial statements? A) statement of owner's equity B) balance sheet C) income statement D) all of the above
A
An accounting report that shows the changes in capital during the accounting period is: A) a statement of owner's equity B) an income statement C) a balance sheet D) all of the above
D
An adjustment for prepaid rent expense would indicate: A) the amount originally paid B) the amount of the ending balance C) the amount of the trial balance D) the amount expired
C
If total liabilities increased by $6,000 and the assets increased by $8,000 during the accounting period, what is the change in the owner's equity amount? A) decrease of $2,000 B) decrease of $10,000 C) increase of $2,000 D) increase of $10,000
C
NOT recording the prepaid rent expense used causes: A) liabilities to be too high B) expenses to be too low C) assets to be too low D) revenue to be too high
B
On a worksheet, the income statement debit column totals $10,500 and the credit column totals $10,300. Which of the following statements is correct? A) The company had a net income of $200 B) The company had a net loss of $200 C) The company's revenues were greater than expenses D) none of the above
B
Posting is performed by transferring information from the journal to the: A) balance sheet B) ledger C) trial balance D) income statement
C
Robert purchases a truck for $50,000 with a residual value of $20,000 and a life expectancy of 5 years; using straight-line depreciation, the amount of the depreciation adjustment for the first year would be: A) $6,400 B) $4,000 C) $6,000 D) $5,000
A
The 12 month period a business chooses for its accounting period is a: A) fiscal year B) accounting cycle C) accounting period D) calendar year
C
The adjustment to record supplies used during the period would be: A) debit supplies; credit cash B) debit supplies; credit supplies expense C) debit supplies expense; credit supplies D) debit supplies expense; credit cash
A
The cost of an asset less accumulated depreciation equals: A) book value B) residual value C) depreciable value D) depreciation expense
C
The entry to record Tom's payment of a home telephone bill is: A) debit telephone expense; credit cash B) debit telephone expense; credit accounts payable C) debit tom's withdrawals; credit cash D) debit tom's withdrawals; credit accounts payable
B
The general journal: A) is the book of final entry B) is the book of original entry C) contains account balances D) is completed after the trial balance
B
The net income or net loss is calculated on the: A) statement of owner's equity B) income statement C) balance sheet D) none of these
D
The posting reference column in the ledger is: A) not used B) used to record the date C) used to record the ledger number D) used to record the journal and page number the transactions originated
D
The process that begins with recording business transactions and includes the completion of the financial statements is the: A) natural business years B) operating cycle C) fiscal year D) calendar year
C
The purpose of posting is to: A) provide an explanation of the transaction B) correct a previous entry C) update the account balances in the ledger D) record the transactions in chronological order in the journal