1. At June 30th, Pluto Pet Shop had the following Account Balances:
Cash $21,000
Equipment $44,000
Inventory $8,000
Note Payable to bank $38,000
All accounts had normal balances. What was Pluto’s total equity at June 30th?
2. The Cash account is decreased by
A. A credit entry
B. A debit entry
3. A trial balance is a(n):
A. list of accounts and their balances taken from the general journal
B. device used to determine that debits equal credits in the general ledger.
C. Part of the financial statement
4. Owners of a corporation are referred to as
A. Stockholders
B. CEOs
C. CFOs
D. Treasures
5. A machine purchased in 1992 for $100,000 is in the accounting records at the 1992
amount of $100,000 and is combined with a machine purchased in 2007 for $200,000.
These are amounts combined even though the purchasing power of the dollar in 2007 was
much less than it was in 1992. The reason we do this is because of the
A. Cost concept
B. Going concern assumption
C. Entity assumption
D. Monetary unit assumption
6. The Wages Expense account will always start each new accounting period:
a. With the ending balance form last period
b. With a zero balance
c. It depends
7. During 2011, Dumbo Airplanes had cash sales of $6,000 and credit sales of $75,000. The
company collected cash of $67,500 from customers “on account” (accounts receivable)
during the year. Total Cost of Goods Sold for 2011 was $45,000. The company also had
wages expense of $8,000 and utilities expense of $1,000. At the end of 2011, Dumbo
Airplanes had Accounts payable of $11,250. Dumbo Airplanes’ accrual-based net income
for 2011 was: _______.
8. Glass Corporation sold merchandise to a customer for $40,000 on July 10. The customer
paid Glass $10,000 on July 10 and the remaining $30,000 on July 20. Under the accrual
basis of accounting, when will Glass Corporation recognize revenue?
A. Glass will recognize $40,000 of revenue on July 10
B. Glass will recognize $10,000 of revenue on July 10
C. Glass will recognize $30,000 of revenue on July 20
D. Glass will recognize $0 of revenue on July 10
9. On January 1, 2011 Baker purchased a new stamping machine for its plant. This new
piece of equipment cost $192,000 and was properly recorded in Baker's accounting
system.
Baker estimates that the stamping machine will last 4 years and have a salvage value of
$24,000 at the end of those 4 years. At the end of January, February, March, April, and
May, Baker made the correct depreciation adjusting entries. At June 30, Baker should
record the following depreciation AJE
Answer：Debit _________ and Credit ______________ for $_____.
10. On August 1, Wimpy Burger Company obtained a $600,000 bank loan. The loan has an
interest rate of 6% and has a 10 month term (it is due in 10 months). Interest is payable at
the end of the loan term. Assuming Wimpy makes adjusting entries each month, the
balance in the interest payable account at December 31, after all adjusting journal entries
is: ______.
11. A company sold 1,000,000 shares of $2 par value common stock on Jan. 1 for $5 per
share. Select the correct journal entry.
A. 1/1 Dr Cash 5,000,000
Cr Common Stock 5,000,000
B. 1/1 Dr Cash 5,000,000
Cr Common Stock 2,000,000
Cr APIC-Common Stock 3,000,000
C. 1/1 Dr Cash 5,000,000
Cr Common Stock 3,000,000
Cr APIC-Common Stock 2,000,000
D. 1/1 Dr Cash 5,000,000
Cr APIC-Common Stock 5,000,000
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