accounting questions

a. Revenues and liabilities

b. Expenses and revenues

c. Expenses and assets

d. Expenses and liabilities

2. Calculate the ending balance of the account. The Accounts Receivable account of Nupitals Inc. has the following postings:

Accounts Receivable

25,000 : 6,000

5,000 :

a. $36,000 debit

b. $24,000 debit

c. $30,000 debit

d. $6,000 credit

3. Ursula Tax Planning Service has the following plant assets: Communications equipment: Cost, $8,640 with useful life of 8 years; Furniture: Cost, $17,712 with useful life of 12 years; and Computer: Cost, $13,440 with useful life of 4 years. Assume the salvage value of all the assets is zero and the straight- line method is used. Ursula’s monthly depreciation journal entry will include a

a. Debit to accumulated depreciation of $493

b. Credit to depreciation expense of $5,916

c. Debit to Depreciation expense of $5,916

d. Credit to Accumulated Depreciation of $493

4. On the first day of January, Maywood inc. borrowed #3,000 on a one – year note payable bearing interest of 8% per year. The note specifies that principal and interest must be paid in full at the end of the one year period. On June 30, the adjusted trial balance will show Interest Payable of

a. $120 credit

b. $120 debit

c. $240 credit

d. $240 debit

5. Which of the following categories of accounts are temporary accounts that are closed at the end of the year?

a. Assets, liabilities, and Stockholder’s equity

b. Assets, liabilities, and dividends

c. Revenues, expenses, dividends

d. Revenues, expenses, stockholder’s equity

6. Viva Inc. had bought machine X for $17,000 two years ago. The machine has no residual value and had an estimated useful life of 10 years. If the company uses the straight-line depreciation method, calculate the current book value of the machine

a. $3,400

b. $13,600

c. $17,000

d. $18,700

7. A company that uses the perpetual inventory system purchases inventory for $64,000 on account, with terms of 3/10, n/30. Which of the following is the journal entry to record the payment made within 3 days?

a. A debit to accounts payable for $64,000, a credit to Merchandise Inventory for $1,920, a credit to Cash for $62,080

b. A debit to Accounts Payable for $64,000 and a credit to Cash for $64,000 and a debit to Merchandise Inventory for $1,920

c. A debit to Accounts Payable for $62,080, a debit to Merchandise Inventory for $1,920, and a credit to Cash for $64,000

d. A debit to Merchandise Inventory for $1,920, a debit to Accounts Payable for $64,000, and a credit to Cash for $65,920

8. No number 8

9. Which of the following journal entries would be recorded if a business makes a cash payment to a supplier for $750 on account? (the business had purchases office supplies on account in the previous month)

a. Debit Cash 750, Credit Accounts Payable 750

b. Debit Accounts Payable 750, Credit Cash 750

c. Debit Accounts Payable 750, Credit Office Supplies 750

d. Debit Cash 750, Credit Office Supplies 750

10. An invoice, with the payment terms 6/10, n/30, was issued on April 28 for $250. If the payment was made on May 12, the amount of the payment will be

a. 225

b. 235

c. 244

d. 250

11. Accord Corporation purchased land for $110,000 by a cash payment of $22,000 and promised to pay the remaining amount at a later period. What is the net effect of this transaction on the business’s accounting equation?

a. Assets and liabilities increase by $88,000

b. Assets and equity increase by $88,000

c. Assets increase by $110,000 and liabilities decrease by $88,000

d. Assets increase by $110,000 and liabilities decrease by $22,000

12. On September 1, 2014, Joy Inc. paid $6,000 in advance for an 8-month rental space covering the period of September, 2014 through April 2015. The prepaid expense was initially recorded as an asset. Joy Inc. makes adjusting entries once a year at year- end. The adjusting entry on December 21, 2014 would include a

a. Credit of 6,000 to prepaid rent

b. Debit of 3,000 to rent expense

c. Credit of 3,000 to rent expense

d. Debit of 6,000 to cash

13. Which of the following statements is true of accrual basis accounting?

a. It’s required by the GAAP

b. It records revenue only when cash is received

c. Is results in greater net income than cash basis accounting

d. It records expenses only when cash has been paid for them

14. Beetles. Inc. recorded the following entry on March 2, 2104: Debit Cash 5,000. Credit Unearned Revenue 5,000. Identify the transaction

a. Beetles purchased goods worth $5,000 and signed a one-year not for the same

b. Beetles sold goods for 5,000 cash

c. Beetles paid 5,000 for services to be received at a later date

d. Beetles received 5,000 for services to be performed in a later period

15. Henry tax bought communications equipment for 10,200 on Jan 1 2015. It has an estimated useful life of 5 years and zero residual value. Henry uses straight-line method to calculate depreciation and records depreciation expense in the books at the end of every month. As of June 30, 2015 the balance in the accumulated depreciation account for the equipment is

a. 850

b. 2,040

c. 170

d. 1020

16. a business purchases equipment by paying 7,955 in cash and issuing a note payable of 15,972. Which of the following occurs?

a. Cash is debited for 7,955, equipment is debited for 15,972, and notes payable is credited for 23,927

b. Cash is credits for 7,955, equipment is debited for 23,927, and notes payable is credited for 15,972

c. Cash is credited for 7,955, equipment is credited for 23,927, and notes payable is debited for 15,972

d. Cash is debited for 7,955, equipment is credited for 15,972, and notes payable is debited for 8,017.

17. Accord Corporation has originally purchased land for 25,000 it later sold it for 25,000 cash which of the following is true of the effect of the sale on the accounting equation?

a. Assets increase by 25,000; equity increases by 25,000

b. The amount of total assets remains the same

c. Assets increase and liabilities decrease by 25,000

d. Assets and equity increase by 50,000

18. The assets of moon company are 120,000 and liabilities are 60,000. The equity will be

a. 240,000

b. 120,000

c. 60,000

d. 180,000

19. following is a list of account operations as of December 31 of the first year of operation:

a. accounts receivable 6,000

b. accounts payable 7,000

c. salary expense 7,000

d. repairs expense 900

e. truck 8,000

f. equipment 8,000

g. notes payable 85,000

h. cash 8,000

i. supplies expense 8,000

j. service revenue 85,000

k. gasoline expense 7,000

l. salary payable 1,100

m. CALCULATE THE NET INCOME

i. 29,000

ii. 92,000

iii. 62,100

iv. 63,100

20. the inventory account balance is 51,000. An actual inventory reveals that actual inventory is 43,000. Which of the following would be included in the adjusting entry? Assume perpetual.

a. A 8,000 credit to COGS

b. A 51,000 debit to COGS

c. A 8,000 credit to Merchandise Inventory

d. A 43,000 credit to Merchandise Inventory

21. The balance sheet accounts as of December 31, 2015 are given: DEBIT: BUIDLING 140,000 CASH 5,000, OFFICE SUPPLIES 1,100 FURNITURE 6,000 PREPAID INSURANCE 550 LAND 35,000 ACCOUNTS RECEIVABLE 2,000. CREDIT: ACCUMULATED DEPRECIATION –FURNITURE 1,000. ACCUMULATED DEPRECIATION – BUILDING 4,600. The insurance has been prepaid for the next half year. Determine the amount of total current assets reported on the balance sheet

a. 6,650

b. 6,100

c. 8,650

d. 13,000

22. Which of the following statements is true if the income statement debit column exceeds the income statement credit column of a worksheet?

a. The company made a net profit

b. The company incurred a net loss

c. The retained earnings account increased during the period

d. The liabilities are greater than assets.

23. Versus Inc. paid $11,000 on accounts payable. How does this transaction affect the accounting equation of Venus?

a. Assets decrease by 11,000 and equity increases by 11,000

b. Assets decrease by 11,000 and liabilities decrease by 11,000

c. Assets increase by 11,000 and liabilities increase by 11,000

d. Assets increase by 11,000 and equity decrease by 11,000

24. Under the perpetual inventory system, discounts taken on an invoice by the buyer would be

a. Credited to COGS

b. Credited to Merchandise Inventory

c. Debited to COGS

d. Debited to Merchandise Inventory

25. The amount of net income is transferred from ___ to _____

a. Balance to income statement

b. Balance to cash flow

c. Income statement to statement of retained earnings

d. The income to the statement of expenditures

26. A company purchased inventory for 2,500 from a vendor on account, FOB shipping point with terms 2/10 n/30. The company paid the shipper $200 cash for freight in. the company then returned damaged goods worth $400. The invoice has been paid 8 days after the sale. Assuming that there was no beginning inventory balance, the cost of inventory would be. Assume perpetual

a. 2,058

b. 2,258

c. 2,450

d. 2,300

27. Ace Inc. had the following transactions in June: sold goods for $2,000 on account; received cash on account 8,000. Paid 700 for repaid expense. Paid 1,700 to a supplier that it owed from the previous month. What is the combined effect on Cash of the June transaction?

a. 5,600 decrease

b. a 8,000 increase

c. a 2,400 decrease

d. a 5,600 increase

28. which of the following is a permanent account?

a. Wages expense

b. Utilities expense

c. Salary payable

d. Service revenue

29. A company using perpetual inventory purchased inventory worth 24,000 on account with the terms 2/10, n/30. Defective inventory of 2,000 was returned 2 days later and the accounts were appropriately adjusted. If the invoice is paid within 10 days, the amount of the purchase discount that would be available to the company is

a. 480

b. 520

c. 440

d. 470

30. A company started business in January 2014. The company rented an office for 5,400 per month starting on January 1. On January it prepaid rentals through June 30. The company makes accrual adjustments monthly. What is the balance of the prepaid rent account on april 30?

a. 900

b. 10,800

c. 5,400

d. 2,700

31. Viva Inc. bought a machine for 15,500 two years ago. The machine had no residual value and has an estimated useful life of 10 years. If the company used the straight-line depreciation method, calculate the current book value of the machine.

a. 3,100

b. 15,500

c. 18,600

d. 12,400

32. A company reported the following for September 2015. What are the total liabilities? Received 24,000 cash and issued common stock. It was credit to common stock. Purchased office equipment for 11,000 for which 3,500 cash was paid and the balance was put on a note payable. Paid insurance expense of 1,200 cash paid a utility bill for 800 cash. Paid rent for September 2,000 cash. Had sales of 12,000 in September of these sales 40% were cash, and the balance was credit sales. The business paid 8,000 cash for office furniture.

a. 12,000

b. 7,500

c. 1,200

d. 11,000

33. what type of account is prepaid rent and what is its normal balance

a. asset; debit

b. expense; debit

c. liability; credit

d. revenue; credit

34. Calculate the amount of total assets balance at the end of the year. Assume plumbing supplies of 3,000 are left at the end of the year: received 12,000 cash and issued stock to stockholder. Paid 1,700 for equipment to be used for plumbing repairs. Borrowed 10,000 from a local bank and deposited the money in the checking account. Paid 100 rent for the year. Paid 500 for plumbing supplies to be used on various jobs in the future. Completed a plumbing repair project for a local lawyer and received 3,000.

a. 22,000

b. 2,200

c. 24,900

d. 1,700

35. a company sold merchandise for 2,000 on account with terms 4/15, n/30. The company uses perpetual inventory. Defective merchandise of 200 was returned 2 days later. If the payment was received after 30 days, the journal entry to record the cash receipt will include.

a. Credit to COGS for 2,000. Debit to sales for 2,000

b. Debit to cash for 1800 and credit to AR for 1800

c. Debit to cash for 1,920 and credit to AR for 1,920

d. Credit to sales for 1800 and debit to cash for 1800

36. A company purchased inventory and received an invoice that requires the buyer to pay the transportation costs for delivering merchandise. The terms in this case are

a. Fob in transit

b. Fob destination

c. Fob shipping point

d. Fob 2/10, n/30

37. Accumulated depreciation is a ___ account and carries a ___ normal balance

a. Revenue; debit

b. Liability; credit

c. Expense; debit

d. Contra asset; credit

38. The accountant failed to make an adjusting entry to record 6,000 on unearned service that has now been earned. Assume the unearned revenue was a initially recorded as a liability. Which of the following is true?

a. Total expenses will be overstated

b. Total revenue will be overstated

c. Total revenue will be understated

d. Total expenses will be understated

39. A journal entry for $50 payment for rent expense was posted as a debit to Salaries Expense and a credit to cash. Which of the following statements correctly states the effect of the error on the trial balance?

a. Sum of debits will exceed the sum of credits by 50

b. Sum of credits will exceed the sum of debits by 100

c. The sum credits will equal the sum of debits

d. Sum of debits will exceed the sum of credits by 100