Accounting 280
Ash.k1. Business can take the following form(s)
A. Sole proprietorship.
B. Common stock.
C. Partnership.
D. A and C only.
E. All of these.
2. The cost concept:
A. Requires that revenue be recognised when earned.
B. Prescribes the accounting information is based on actual cost.
C. Means the business records should be kept separately from the owner’s financial record.
D. Requires the partnerships have written agreement.
E. Requires expenses to be recognised when earned.
3. The below items has a normal debit balance on Adjusted Trail Balance except:
A. Prepaid Insurance
B. Rent Expense
C. Unearned revenue
D. Cash
4. The matching principle dictates that:
A. All debits equal credits in an entry.
B. That the trial balance must balance
C. Assets of a time period must be matched in the same time period as the liabilities and equity of the same time period.
D. expense of the time period must be matched in the same time period as the revenues of that time.
5. Unearned revenue is listed on the:
A. Statement of owner equity
B. Revenue Statement
C. Balance Sheet
D. Income Statement
6. If owner Equity is $76,000 and liabilities are $85,000, then assets equals:
A. $143,000
B. $161,000
C. $103,000
D. $100,000
E. $60,000
(76,000+85,000=161,000)
7. Unearned revenue is classified as a/ an
A. Asset
B. Revenue
C. Liability
D. Equity
E. Expense
8. Prior to adjusting entries, the office supplies account had a $555 debit balance while a physical account shows of supplies showed $110 of unused supplies on hand. Thus the required adjusting entry is:
A. Debit office supplies $110 and credit office supplies expense $110
B. Debit office supplies expense $110 and credit office supplies $110
C. Debit office supplies expense $445 and credit office supplies $445
D. Debit office supplies $445 and credit office supplies $445
E. some other entry
9. The excess of revenue over expense for a period is:
A. Net Assets
B. Equity
C. Net Loss
D. Net Income
E. A Liability
10. The Fast Forward company balance sheet shows cash $8,000, account receivable $10,000, office equipment $ 4,000 and account payable $ 10,000. What is the amount of owner’s equity?
A. $1,000
B. $ 11,000
C. $12,000
D. $15,000
E. 19,000
(8,000+10,000+4,000-11,000=12,000)
11. If expenses exceeds the revenues the company has incurred:
A. Net Assets
B. Equity
C. Net Loss
D. Net Income
E. A Liability
12. The principle that requires every business to be accounted for separately and directly from its owners or owner is known as the:
A. Objective principle
B. Business entity principle
C. Going-concern principle
D. Revenue recognition principle
13. If a parcel of land is offered for sale at $50,000, is assessed for tax purpose at $25,000, is recognised by its purchasers as easily being worth $55,000, and is purchased for $45,000 the land should be recorded in purchaser’s book at:
A. $20,000
B. $34,000
C. $36,000
D. $45,000
E. $54,000
14. The simple Accounting Equation is:
A. Net Income = Assets - Liabilities
B. Liabilities = Equity + Assets
C. Business Equation
D. Return on Equity Ratio
E. Assets = Liabilities + Owner Equity
15. A corporation reported stockholder’s equity of $45,000 on its December 31st, 19X1, balance sheet. The following information is available for year ended December 31st,19X2:
Revenues $73,000
Expenses $ 59,000
Liabilities $ 11,000
What are the total Assets of corporation for year ended December 31st, 19X2?
A. $25,000
B. $45,000
C. $48,000
D. $57,000
E. $70,000
(Revenue- expense= net income; 73,000-59,000=14,000)
(Equity + net Income+ Liabilities= Total Assets; 45,000+14,000+11,000=70,000)
16. The right side of an account is:
A. The credit
B. The income side
C. The debit
D. Recorded as an asset in the accounting records
E. The left side.
17. A list of all accounts used by a company, including the identification number assigned to each account is called a:
A. Ledger
B. Journal
C. Trial Balance
D. Charts of Accounts
E. General Journal
18. The difference between total debits and credits for an account, including beginning balance is:
A. The normal balance
B. The account balance
C. The credit
D. The normal balance of an expense account
E. All of above statements are correct.
19. On September 1, the cash account of Blue Company had a normal balance of $2,300. During September, the account was debited for $5,400 and credited for a total of $ 3,900. What was the balance in cash account at the end of September?
A. A $-0- balance
B. An $3,800 debit balance
C. An $4,600 credit balance
D. A $3,600 debit balance
E. A $ 3,800 credit balance
(2300+5400-3900=3800)
20. All of the above are part of Retained Earning except:
A. Beginning balance
B. Normal balance
C. Net income
D. Dividends
E. Ending Balance
21. If assets are $ 134,000, and liabilities are $87,000, then owner equity equals:
A. $181,000
B. $221,000
C. $47,000
D. $107,000
E. $74,000
(134,000-87,000=47,000)
22. Y Company had $ 1,000 office supplies on hand at the beginning of 20X1. During 20X1 Y Company purchased $250 worth of office supplies. On December 31st 20X1, $925 worth of office supplies remained. How much should Y Company report as office supplies expense during 20X1?
A. $1,675
B. $275
C. $2,175
D. $325
E. $125
(1,000+250-925=325)
23. A company begins a year by purchasing 5 year insurance policy for $2300. If the purchase was charged to prepaid insurance, the adjusting entry at the end of first year is:
A. Debit prepaid insurance $2,300; credit cash, $2,300
B. Debit Insurance expense $920; credit insurance expense, $920.
C. Debit prepaid insurance $460; credit insurance expense, $460
D. Debit insurance expense $460; credit prepaid insurance, $460
E. Some other entry
(2300/5=460 per year)
24. Prepaid insurance is reported in the financial statement as:
A. A revenue on the balance sheet
B. A liability on the balance sheet
C. An unearned revenue on the income statement
D. An asset on the balance sheet
25. Which of the following asset is not depreciated:
A. Store fixtures
B. Computers
C. Land
D. Buildings
E. All of the above are depreciated
26. On May 1, Shawn’s Sporting goods store received $1,500 from Julie Bee for advertising services to be completed on April 30, 20X2. Assume the receipt was recorded as unearned revenue on 5/01/X1 and that as of December 31, 20X1, $725 fees had been earned but no additional entry have been made. Show the entry on 5/01/X1. What journal entry is needed on 12-31-X1.
27. The Shawn’s sporting goods purchased for cash a new truck at a cost of $50,000 on Jan 1, 20X1. The truck is estimated to have residual value of 7 years. What journal entry is needed to record the purchase of truck?
What journal entry is needed at year ended December 31st, 20X1 to record depreciation expense for one year?
28. A business pays each of its two office employees each Friday at the rate of $60 per day per person for a five day weeks that begins on Monday. If the accounting period ends on Tuesday and the employees worked on both Monday and Tuesday, the adjusting entry to record salaries earned but unpaid is:
A. Debit unpaid salaries $360 and credit salaries payable $360.
B. Debit office salaries expense $240 and credit salaries payable $240.
C. Debit office salaries expense $360 and credit salaries payable $360.
D. Debit office salaries payable $240 and credit salaries expense $240.
E. Debit office salaries expense $240 and credit cash $240.
(2 employees*2 days*$60=$240)
29. A trial balance prepared before any adjustment have been recorded is:
A. An adjusted trial balance
B. Used to prepare the financial statements
C. An unadjusted trial balance
D. Correct with respect to proper balance sheet and income statement
E. Both A and D.
30. In January, Southern New Hampshire University received $360,000 in unearned tuition revenue from its students for the spring semester, which lasts four months. On January 31st the college should recognised which amount for tuition fees?
A. $360,000
B. $80,000
C. $ 180,000
D. $60,000
E. 90,000
(360,000/4)
11 years ago
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