multiple choice questions for accounting 101

24) Paid the rent for the next six months.

A) An asset would be debited and an expense credited.

B) An asset would be debited and a revenue credited.

C) Capital would be debited and a revenue credited.

D) An asset would be debited and an asset credited.

24) Paid the rent for the next six months.

A) An asset would be debited and an expense credited.

B) An asset would be debited and a revenue credited.

C) Capital would be debited and a revenue credited.

D) An asset would be debited and an asset credited.

38) Andrew Antiques showed store supplies available during the year of $400. A

count of the supplies on hand as of May 31 is $150. The adjusting entry for

Store Supplies would include:

A) a debit to Store Supplies for $150.

B) a credit to Store Supplies Expense for $250.

40) The capital balance amount shown in the balance sheet column of the worksheet represents:

A) beginning capital plus net income.

B) beginning capital plus investments to capital.

C) beginning capital less withdrawals.

D) beginning capital plus net income less withdrawal.

43) The purchase of equipment will require an adjustment of:

A) increasing the total assets and increasing the total expenses at the end of the

month.

B) decreasing the total assets and decreasing the total expenses at the end of

the month.

C) decreasing the total assets and increasing the total expenses at the end of

the month.

D) none of the above.

44) Which of the following would cause an asset to be debited and a liability

credited?

A) Recorded the adjustment for the expiration of the insurance policy

B) Recorded the adjustment for the expiration of rent

C) Purchased supplies on account

D) None of these would have that effect.

45) Which of the following would cause a liability to be credited and an expense

debited?

A) Recorded the adjustment for the accrual of wages

B) It is the end of the month and no utility bill has been received

C) Recorded an accrued expense

D) All of the above would have that effect.

46) The adjusting entries are journalized:

A) whenever time permits.

B) before preparing financial reports.

C) before the next accounting period starts.

D) at the beginning of the accounting period.

47) Which of the following accounts would be considered a permanent account?

A) Service Fees

B) Salaries Expense

C) Salaries Payable

D) Depreciation Expense

48) An important purpose of closing entries is to:

A) set nominal account balances to zero to begin the next period.

B) adjust the accounts in the ledger.

C) help in preparing financial statement.

D) set real account balances to zero to begin the next period.

49) Which of the following accounts will not be closed to Income Summary at the

end of the fiscal year?

A) Word Processing Fees

B) Smith, Withdrawals

C) Salaries Expense

D) Supplies Expense

50) Which of the following accounts will be directly closed to Capital at the end

of the fiscal year?

A) Depreciation Expense

B) Fees Revenue

C) Salaries Expense

D) Withdrawals

58) A check for $78 is incorrectly recorded on the checkbook stub as $87. The

$9 error should be shown on the bank reconciliation as:

A) deducted from the balance per bank statement.

B) added to the balance per bank statement.

C) added to the balance per books.

D) deducted from the balance per books.

59) Which of the following bank reconciliation items would not be reflected in a

journal entry?

A) Outstanding checks

B) NSF customer check

C) Collection of a note by the bank

D) Bank service charges

63) The entry to replenish the petty cash fund debited Supplies instead of Postage Expense. This would cause:

A) expenses to be overstated.

B) revenues to be understated.

C) expenses to be understated.

D) revenues to be overstated.

64) An error recording a $72 check as $27 would be included on the bank reconciliation as a(n):

A) subtraction from the balance per bank.

B) subtraction from the balance per books.

C) addition to the balance per books.

D) addition to the balance per bank..

68) The payroll register includes sections for recording:

A) assets, liabilities, equity, revenues, and expenses.

B) gross pay, deductions, and net pay.

C) accrued expenses, unearned revenues, and net pay.

D) trade accounts receivable and short-term note receivables.

D) take-home pay.

70) Both employees and employers pay which of the following taxes?

A) FICA taxes (Social Security and Medicare)

B) Excise tax

C) Federal income tax

D) FUTA tax

75) The entry to record the payroll tax expense would include:

A) a credit to Cash.

B) a credit to FICA (Social Security and Medicare) Taxes Payable.

C) a credit to Federal Income Taxes Payable.

D) a credit to Wages Payable.

76) The percentage of FICA-Medicare multiplied by taxable earnings on the 941

is:

A) 12.4%.

B) 6.2%.

C) 2.9%.

D) 1.45%.

77) The employer’s annual Federal Unemployment Tax Return is:

A) Form 940EZ.

B) Form 8109.

C) Form 941.

D) Form W-4.

78) Workers’ Compensation Insurance is:

A) paid by the employer to protect the employee against job-related injury or

death.

B) paid by the employee to protect himself/herself against no-njob-related accidents and death.

C) paid by the employee to protect himself/herself against job-related accidents

or death.

D) paid by the employer to protect the employee against non-job-related injury

or death

83) Accounts of a single type are kept in this ledger:

A) subsidiary ledger.

B) supplemental ledger.

C) additional ledger.

D) None of these answers are correct.

90) Purchased office supplies on account. This will be recorded with:

A) a debit to a liability and a credit to an asset.

B) a credit to a liability and a debit to an asset.

C) a credit to an asset and a debit to an expense.

D) a debit to an asset and a credit to an expense.

93) Deluth Corporation has a normal gross profit of 40%. The current year’s

beginning inventory was $2,000, purchases were $5,000, and retail sales

were $6,000. The estimated ending inventory under the gross margin method

is:

A) $3,600.

B) $3,400.

C) $3,450.

D) $4,500.

96) What would the depreciation be in year 2 for a computer system using the

straight-line method when cost is $5,000, residual value is $1,000, and the

expected life is 4 years?

A) $1,250

B) $800

C) $2,000

D) $1,000

99) When an asset is exchanged for a similar asset and a gain results, under

accounting rules the gain is:

A) subtracted from the cost of the new asset.

B) credited to Gain on Exchange of an Asset.

C) absorbed into the cost of the new asset.

D) recorded in the other income section of the income statement.