Every journal entry:
A.
must increase at least
one account and decrease at least one account.
B.
is recorded in either
the journal or the ledger.
C.
affects both an income
statement account and a balance sheet account.
D.
must
debit at least one account and credit at least one account.
The entry to close
Service Revenue includes a debit to:
A.
Service Revenue and a
credit to Net Income.
B.
Service Revenue and a credit to Retained Earnings.
C.
Service Revenue and a
credit to Stockholders' Equity.
D.
Retained Earnings and a credit to Service
Revenue.
Michael Company reports
Total Assets of
$ 253 comma 000$253,000,
Common Stock of
$ 60 comma 000$60,000,
and Retained Earnings of
$ 92 comma 000$92,000.
What are total
liabilities at the end of the first year?
A.
$ 161 comma 000$161,000
B.
$ 101 comma 000$101,000 A company declared and paid dividends of
$ 1 comma 600$1,600.
How does this
transaction affect the accounting equation?
A.
Add
$ 1 comma 600$1,600
to Dividends and add
$ 1 comma 600$1,600
to Accounts Receivable.
B.
Subtract
$ 1 comma 600$1,600
from Retained Earnings and subtract
$ 1 comma 600$1,600
from Cash.
C.
Add
$ 1 comma 600$1,600
to Dividend Expense and
subtract
$ 1 comma 600$1,600
from Cash.
D.
Add
$ 1 comma 600$1,600
to Revenue and add
$ 1 comma 600$1,600
to Cash.
C.
$ 193 comma 000$193,000
D.
$ 221 comma 000
Decision makers who use
accounting information include:
A.
the Internal Revenue
Service.
B.
creditors.
C.
the Securities and
Exchange Commission.
D.
all of
the above.
A business paid
$ 2 comma 900$2,900
on account. The journal
entry would:
A.
debit Accounts
Receivable for
$ 2 comma 900$2,900
and credit Revenue for
$ 2 comma 900$2,900.
B.
debit Accounts Payable for
$ 2 comma 900$2,900
and credit Cash for
$ 2 comma 900$2,900.
C.
debit Cash for
$ 2 comma 900$2,900
and credit Accounts
Payable for
$ 2 comma 900$2,900.
D.
debit Cash for
$ 2 comma 900$2,900
and credit Retained
Earnings for
$ 2 comma 900$2,900.
The three factors that
influence business and accounting decisions are:
A.
minimizing costs,
maximizing profits and cost/benefit tradeoff.
B.
judgment, cost/benefit analysis,
and cultural backgrounds.
C.
legal implications,
socioeconomic backgrounds, profit maximization.
D.
economic,
legal, and ethical.
On October 1, 2018,
Golde Company paid
$ 16 comma 200$16,200
for one year of
insurance for the period, October 1, 2018 through September 30,
2019. Which of the following will be part of the adjusting entry on December 31,
2018?
A.
Debit Insurance Expense for $ 4 comma 050$4,050
B.
Debit Insurance Expense
for $ 12 comma 150$12,150
C.
Debit Prepaid Insurance
for $ 4 comma 050$4,050
D.
Debit Prepaid Insurance for $ 12 comma 150
A company's
interest expense for the period is reported on the:
A.
statement of retained
earnings.
B.
balance sheet.
C.
income statement.
D.
statement of cash flows.
A construction company
paid
$ 80 comma 000$80,000
cash for land used in
the business. At the time of purchase, the land had a list price of
$ 89 comma 000$89,000.
When the balance sheet
was prepared, the fair value of the land was
$ 86 comma 000$86,000.
At what amount should the
land be reported on the balance sheet of the company?
A.
$ 80 comma 000$80,000
B.
$ 84 comma 500$84,500
C.
$ 86 comma 000$86,000
D.
$ 89 comma 000
The income statement:
A.
must cover only a month
in time.
B.
is not dated.
C.
covers a defined period of time.
D.
reports the results of operations since the
inception of the business.
Under accrual accounting,
revenue is recorded:
A.
when the cash is received,
regardless of when the services are performed.
B.
at the end of every
month.
C.
only if the cash is
received at the same time the services are performed.
D.
when the
services are performed, regardless of when the cash is received.
The debt ratio is
computed by dividing:
A.
total liabilities by total assets.
B.
total assets by current
liabilities.
C.
current liabilities by
total assets.
D.
total assets by total liabilities.
All of the following are
expenses EXCEPT for:
A.
Dividends.
B.
Salary Expense.
C.
Cost of products and
services.
D.
Depreciation Expense.
Wetzel Company has the
following accounts and balances at the end of the fiscal year:
|
Longminus−Term
Notes Payable
|
$ 151 comma 000$151,000
|
|
|
Accounts Receivable
|
$ 32 comma 000$32,000
|
|
|
Accounts Payable
|
$ 40 comma 000$40,000
|
|
|
Building
|
$55,000
|
|
|
Cash and Cash
Equivalents
|
$ 61 comma 000$61,000
|
|
|
Salaries Expense
|
$20,500
|
|
|
Common Stock
|
$ 27 comma 000$27,000
|
|
|
Interest Payable
|
$ 5 comma 500$5,500
|
|
|
Land
|
$ 43 comma 000$43,000
|
|
|
Shortminus−term
Investments
|
$ 28 comma 000$28,000
|
|
|
Income Taxes Payable
|
$ 12 comma 000$12,000
|
|
|
Equipment
|
$59,500
|
|
|
Supplies
|
$ 25 comma 000$25,000
|
|
|
Service Revenue
|
$99,000
|
|
|
Supplies Expense
|
$38,000
|
|
|
Utilities Expense
|
$28,500
|
|
|
Income Tax Expense
|
$ 20 comma 000$20,000
|
What is the total amount
of liabilities at the end of the year?
A.
$ 208 comma 500$208,500
B.
$ 109 comma 500$109,500
C.
$ 201 comma 000$201,000
D 57500
A company started the
year with
$ 400$400
of supplies. During the
year the company purchased additional supplies costing
$ 1 comma 800$1,800.
There were
$ 900$900
of supplies on hand at
the end of the year. An adjusted trial balance, prepared at the end of
the accounting period, will show the following balance in Supplies Expense:
A.
$ 900$900.
B.
$ 500$500.
C.
$ 1 comma 300$1,300.
D.
$ 1 comma 800$1,800.
On December 1,
2019, Carrie's Day Care receives
$ 2 comma 100$2,100
in advance for an
agreement to care for Susan's children for the months of December,
January, and February. Carrie's Day Care will make an adjusting entry on
December 31, 2019 to:
A.
debit Unearned Revenue for
$ 700$700.
B.
credit Prepaid Revenue
for
$ 1 comma 400$1,400.
C.
credit Revenue for
$ 2 comma 100$2,100.
D.
credit Revenue for
$ 1 comma 400$1,400.
Beck Company had the
following accounts and balances at the end of the year. What is net income or
net loss for the year?
|
Cash
|
$ 74 comma 000$74,000
|
|
|
Accounts Payable
|
$12,000
|
|
|
Common Stock
|
$21,000
|
|
|
Dividends
|
$12,000
|
|
|
Operating Expenses
|
$ 15 comma 000$15,000
|
|
|
Accounts Receivable
|
$ 52 comma 000$52,000
|
|
|
Inventory
|
$ 47 comma 000$47,000
|
|
|
Longminus−term
Notes Payable
|
$33,000
|
|
|
Revenues
|
$ 95 comma 000$95,000
|
|
|
Salaries Payable
|
$ 34 comma 000$34,000
|
A.
net income of $ 95 comma
000$95,000
B.
net loss of $ 8 comma
000$8,000
C.
net income of $ 80 comma 000$80,000
D.
net income of $ 7 comma 000
On May 10, a
business collected
$ 3 comma 300$3,300
on account. What journal
entry is needed on that date?
A.
Debit Accounts
Receivable for
$ 3 comma 300$3,300
and credit Revenue for
$ 3 comma 300$3,300.
B.
Debit Cash for
$ 3 comma 300$3,300
and credit Revenue for
$ 3 comma 300$3,300.
C.
Debit Cash for
$ 3 comma 300$3,300
and credit Accounts Receivable for
$ 3 comma 300$3,300.
D.
Debit Accounts Payable
for
$ 3 comma 300$3,300
and credit Revenue for
$ 3 comma 300$3,300.
The financial statements
are prepared from which columns of the trial balance worksheet?
A.
closing entries columns.
B.
unadjusted trial balance
columns.
C.
adjustment columns.
D.
adjusted
trial balance columns.
The owners' equity
of a business is equal to:
A.
assets plus liabilities.
B.
revenues minus expenses.
C.
paidminus−in
capital plus assets.
D.
assets
minus liabilities.
A company performed
services for a customer for cash. This transaction increased assets and:
A.
increased liabilities.
B.
decreased stockholders'
equity.
C.
increased revenues.
D.
increased expenses.
When working with T accounts,
an important rule to remember is:
A.
the debit side of a T
account is on the
rightminus−hand
side of the T account
for assets and expenses.
B.
to credit an account means to enter an amount on the
rightminus−hand
side of the T account.
C.
an increase to accounts
payable will be recorded as a debit.
D.
when an account is debited,
an amount is entered on the
rightminus−hand
side on the T account.
After the closing
entries are prepared and posted:
A.
all asset accounts will
have a zero balance.
B.
the temporary accounts
will have debit balances.
C.
the Retained Earnings account will have the correct
ending balance.
D.
all liability accounts will have a zero balance.
The normal balance of a
revenue account is a ________ because revenues increase ________.
A.
debit; expenses
B.
credit; retained earnings
C.
debit; retained
earnings
D.
credit; assets
Closing entries:
A.
brings all asset account
balances to zero.
B.
prepare the accounts for the next period's
transactions.
C.
are made at the
beginning of each accounting period.
D.
are the same as adjusting entries.
The debt ratio is
computed by dividing:
A.
total assets by current
liabilities.
B.
total assets by total
liabilities.
C.
current liabilities by
total assets.
D.
total
liabilities by total assets.
Which of the following
transactions will increase one asset and decrease another asset?
A.
the purchase of equipment for cash
B.
the performance of
services for cash
C.
the purchase of office
supplies on account
D.
the performance of services on account
Accounting:
A.
processes data into
reports and communicates the data to decision makers.
B.
is often called the
language of business.
C.
measures business
activities.
D.
is all of
the above.
At the end of the
current accounting period, account balances were as follows: Cash,
$ 26 comma 000$26,000;
Accounts Receivable,
$ 42 comma 000$42,000;
Common Stock,
$ 21 comma 000$21,000;
Retained Earnings,
$ 14 comma 000$14,000.
Liabilities for the
period were:
A.
$ 47 comma 000$47,000.
B.
$ 68 comma 000$68,000.
C.
$ 54 comma 000$54,000.
D.
$ 33
comma 000$33,000.
The entry to close
expense account(s) includes a:
A.
debit to the revenue
accounts.
B.
debit to the expense
accounts.
C.
credit to the expense accounts.
D.
credit to Retained Earnings.
Which of the following
increases retained earnings?
A.
dividends
B.
net loss
C.
net income
D.
expenses
When computing the
normal balance of an account:
A.
equipment should have a
credit balance.
B.
notes payable should
have a debit balance.
C.
salaries expense should
have a credit balance.
D.
accounts
payable should have a credit balance.
A business received the
current month's utility bill for
$ 1 comma 025$1,025,
and immediately paid it.
Which journal entry is prepared?
A.
Debit Utilities Payable
for
$ 1 comma 025$1,025
and credit Cash for
$ 1 comma 025$1,025.
B.
Debit Operating Expense
for
$ 1 comma 025$1,025
and credit Accounts
Payable for
$ 1 comma 025$1,025.
C.
Debit Utilities Expense for
$ 1 comma 025$1,025
and credit Cash for
$ 1 comma 025$1,025.
D.
Debit Accounts Payable
for
$ 1 comma 025$1,025
and credit Cash for
$ 1 comma 025$1,025.
On December 1,
2019, Carrie's Day Care receives
$ 3 comma 300$3,300
in advance for an
agreement to care for Susan's children for the months of December,
January, and February. Carrie's Day Care will make an adjusting entry on
December 31, 2019 to:
A.
credit Revenue for
$ 2 comma 200$2,200.
B.
credit Revenue for
$ 3 comma 300$3,300.
C.
credit Prepaid Revenue
for
$ 2 comma 200$2,200.
D.
debit Unearned Revenue for
$ 1 comma
100$1,100.
Seidner Company had the
following account balances at the end of the first year of operations:
|
Revenues
|
$ 106 comma 000$106,000
|
|
|
Salaries Expense
|
$ 17 comma 000$17,000
|
|
|
Dividends
|
$ 15 comma 000$15,000
|
|
|
Utilities Expense
|
$ 13 comma 000$13,000
|
|
|
Advertising Expense
|
$ 7 comma 000$7,000
|
|
|
Shortminus−term
Investments
|
$20,000
|
|
|
Cash
|
$ 32 comma 000$32,000
|
|
|
Land
|
$50,000
|
|
|
Common Stock
|
$50,000
|
What is the amount of
net income or net loss for the year?
A.
$ 35 comma 000$35,000
B.
$ 76 comma 000$76,000
C.
$ 69 comma 000$69,000
D.
$ 28 comma 000
A company received a
utility bill for
$ 1 comma 300$1,300
and decided to pay it
next month due to a shortage of cash. How does this transaction affect the
accounting equation?
A.
Add
$ 1 comma 300$1,300
to Accounts Payable and subtract
$ 1 comma 300$1,300
from Retained Earnings.
B.
Add
$ 1 comma 300$1,300
to Utilities Expense and
add
$ 1 comma 300$1,300
to Cash.
C.
Subtract
$ 1 comma 300$1,300
from Cash and add
$ 1 comma 300$1,300
to Accounts Payable.
D.
Add
$ 1 comma 300$1,300
to Accounts Receivable
and subtract
$ 1 comma 300$1,300
from Retained Earnings.
When working with T accounts,
an important rule to remember is:
A.
an increase to accounts
payable will be recorded as a debit.
B.
when an account is debited,
an amount is entered on the
rightminus−hand
side on the T account.
C.
to credit an account means to enter an amount on the
rightminus−hand
side of the T account.
D.
the debit side of a T
account is on the
rightminus−hand
side of the T account for assets and expenses.
A doctor performed
surgery in April and did not receive cash payment from the patient until
August. Under
cashminus−basis
accounting, the doctor
recognizes revenue:
A.
in August.
B.
in April.
C.
in April or August.
D.
at a time
that cannot be determined from the facts.
The ________
factor recognizes that while certain actions might be both economically
profitable and legal, they still may not be right.
A.
profitability
B.
economic
C.
ethical
D.
legal
The income statement:
A.
is not dated.
B.
covers a defined period of time.
C.
reports the results of
operations since the inception of the business.
D.
must cover only a month in time.
A construction company
paid
$ 80 comma 000$80,000
cash for land used in
the business. At the time of purchase, the land had a list price of
$ 90 comma 000$90,000.
When the balance sheet
was prepared, the fair value of the land was
$ 83 comma 000$83,000.
At what amount should
the land be reported on the balance sheet of the company?
A.
$ 80 comma 000$80,000
B.
$ 85 comma 000$85,000
C.
$ 90 comma 000$90,000
D.
$ 83 comma 000
A business purchased
office supplies of
$ 24 comma 000$24,000
on account. The business would:
A.
debit Accounts
Receivable for
$ 24 comma 000$24,000
and credit Supplies for
$ 24 comma 000$24,000.
B.
debit Accounts Payable
for
$ 24 comma 000$24,000
and credit Supplies for
$ 24 comma 000$24,000.
C.
debit Supplies for
$ 24 comma 000$24,000
and credit Accounts Payable for
$ 24 comma 000$24,000.
D.
debit Supplies for
$ 24 comma 000$24,000
and credit Cash for
$ 24 comma 000$24,000.
A company started the
year with
$ 300$300
of supplies. During the year,
the company purchased an additional
$ 1 comma 000$1,000
of supplies. There were
$ 900$900
of supplies on hand at
the end of the year. An adjusting entry prepared at the end of the accounting
period includes a:
A.
debit to Supplies for
$ 900$900.
B.
debit to Supplies Expense for
$ 400$400.
C.
debit to Supplies
Expense for
$ 600$600.
D.
debit to Supplies for
$ 700$700.
If an investor wants to
know a company's cash balance at the end of the year, this balance
is reported on the:
A.
balance sheet.
B.
statement of cash flows.
C.
income statement.
D.
A and B.
Kolander Company has the
following accounts and balances at the end of the year:
|
Longminus−Term
Notes Payable
|
$ 53 comma 000$53,000
|
|
|
Accounts Receivable
|
$ 32 comma 000$32,000
|
|
|
Accounts Payable
|
$ 42 comma 000$42,000
|
|
|
Building
|
$ 60 comma 000$60,000
|
|
|
Cash and Cash
Equivalents
|
$ 80 comma 000$80,000
|
|
|
Common Stock
|
$ 121 comma 000$121,000
|
|
|
Interest Payable
|
$ 4 comma 500$4,500
|
|
|
Land
|
$ 41 comma 000$41,000
|
|
|
Shortminus−term
Investments
|
$ 6 comma 000$6,000
|
|
|
Income Taxes Payable
|
$ 11 comma 000$11,000
|
|
|
Equipment
|
$ 59 comma 500$59,500
|
|
|
Supplies
  |
$ 10 comma 000$10,000
|
What is the amount of
Retained Earnings at the end of the year?
57500
On December 1 of the
current year, Prepaid Rent was debited
$ 11 comma 400$11,400
for three months of rent,
to cover the period December 1 to February 28. The amount of the adjusting entry
on December 31 is:
A.
$0.
B.
$ 7 comma 600$7,600.
C.
$ 3 comma 800$3,800.
D.
$ 11 comma 400$11,400.
The
adjusted trial balance for the year of
SneedSneed
Corporation
at
OctoberOctober
3131,
20182018,
follows.
Requirement 1. Prepare
SneedSneed
Corporation's
20182018
single-step income statement,
statement of retained earnings, and balance sheet.
Begin by preparing
SneedSneed's
20182018
income statement.
Prepare the balance sheet.
Requirement 2.
SneedSneed's
lenders require that the
company maintain a debt ratio no higher than
0.500.50.
Calculate
SneedSneed's
debt ratio at
OctoberOctober
3131,
20182018,
to determine whether the
company is in compliance with this debt restriction. If not, suggest a
way that
SneedSneed
could have avoided this
difficult situation.
Begin by selecting the
labels and then enter the amounts to compute
SneedSneed's
debt ratio at
OctoberOctober
3131,
20182018.
Which of the following
transactions includes a credit to cash?
A.
the collection of cash
from an accounts receivable
B.
the payment of an accounts payable
C.
the purchase of supplies
on account
D.
receipt of cash from a customer when service is
provided
When preparing the
financial statements, why is the income statement prepared first?
A.
The income statement is
the most important statement to investors and creditors.
B.
Net income or net loss from the income statement is used
for the statement of retained earnings.
C.
The income statement is
the easiest statement to prepare.
D.
The income statement is used to prepare the
balance sheet.
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