,{$ Name: TaftUCrf,Prt- Date: ID: A. Test 1 - Chapter 1,2,3 & 4

Name: TaftUCrf,Prt-

ID: A

Date:

'Jnd-'at

T e s t1 - C h a p t e1r , 2 , 3 & 4 Multiple Choice Identifu the choice that best completesthe statementor answers the question. 1. Profit is the differencebetween a. assets and liabilities b. the incomingcashand outgoingcash c. the assetspurchasedwith cashcontributedby the owner and the cashspentto operatethe business d. the assetsreceivedfor goodsand servicesand the amountsusedto provide the goodsand servlces 2. Financialreportsare usedby a. management b. creditors c. investors d. all are correct 3. The initialsGAAP standfor a. GeneralAccounting Procedures b. GenerallyAcceptedPlans c. GenerallyAcceptedAccountingPrinciples d. GenerallyAcceptedAccounting Practices 4. For accountingpurposes,the businessentify shouldbe consideredseparatefrom its ownersif the entity is a. a corporation b, a proprietorship c. a partnership d. all ofthe above 5. Equipmentwith an estimatedmarketvalueof $55,000is offeredfor saleat $75,000.The equipmentis acquiredfor $20,000in cashand a note payableof $40,000due in 30 days.The amountusedin the buyer's accountingrecordsto recordthis acquisitionis a. 555.000 b. $60.000

c. $20,000 d . $ 7 5 ,0 0 0 6. Owned resourcesof a businessare referredto as a. assets b. liabilities c. equities d. revenues

,{$

Name:

ID: A 7. Debtsowed by a businessare referredto as a. accountsreceivables b. equities c. owner'seqLrity d. liabilities 8. The accountingequationmay be expressed as a. Assets= Equities- Liabilities b. Assets+ Liabilities= Owner'sEquity c. Assets= RevenueslessLiabilities d. Assets- Liabilities: Owner'sEquity 9. Accounts a. do not reflect money amounts b. are not usedby entitiesthat manufactureproducts c. are recordsof irrcreases and decreases in individualfinancialstatementitems d. are only usedby largeentitieswith manytransactions

10. Which of the following accountsis an owner'sequityaccount? a. Cash b. AccountsPayable c. PrepaidInsurance d. RossMorris, Capital 1l.

Tlre grossincreasesit'towner'sequityattributableto businessactivitiesare called a. assets b. liabilities c. revenues d. net income

12. An a. b. c.

accountis said to have a debit balanceif the amountof the debits exceedsthe amountof the credits thereare more entrieson the debit sidethanon the creditside its normalbalanceis debit without regardto the amourrtsor numberof entrieson the debitside d. the first entry of the accountingperiodwas postedon the debit side

13. A debitmay signifya(n) a. decreasein assetaccounts b. decreasein liability accounts c. increasein the capital account d. decreasein the drawins account

Name:

ID: A

14. Whichof thefollowinggroupsof accounts havea normaldebitbalance? a. revenues, liabilities,capital b. capital,assets c. liabilities,expenses d. assets, expenses 15. A creditmaysignifya a. decrease in assets b. decrease in liabilities c. decrease in capital d. decrease in revenue 16. Whichof thefollowingentriesrecords thepayment of anaccountpayable? a. debitCash;creditAccountsPayable b. debitAccountsReceivable; creditCash c, debitCash;creditSupplies Expense d. debitAccounts Payable; creditCash 17. Thebalance of theaccountis determined by a, addingall of thedebitsto all of thecredits. b. alwayssubtracting the debitsfrom thecredits. c. alwayssubtracting all of thecreditsfromthedebit. d. addingall of thedebits,addingall of thecredits,andthensubtracting thesmallersum fromtlie largersurn. 18, PrarieClinicpLrrchased X-rayequipment for $4,000,paid$l ,275down,with theremainder to bepaidlater. Thecorrectentrywouldbe a, Equiprnent 1,27 5 Cash 1,275 b. Cash 1,215 Accounts Payable 2,725 Equipment 4,000 c. Equipment Expense 4,000 AccountsPayable 1,275 Cash 2,725 d. Equiprnerrt 4,000 AccountsPayable 2,725 Cash 1,275 e. Cash 1,275 Equiprnent 1,275 19. Whichof thefollowingstatements is not trueaboutliabilities? a. Liabilitiesaredebtsowedto outsiders. b. Accounttitlesof liabilitiesoftenincludethetermo'payable". c. Cashreceived beforeservices areperformed areconsidered to be liabilities. d. Liabilitiesdo not includewagesowedto employees of thecompany.

Name:

20. All a. b. c. d.

ID: A exceptone of tlie following accountswill be increased with a debit: UnearnedReverrues Land AccountsReceivable Casfr

21. Usingaccrualaccounting,expensesare recordedand reportedonly a. when they are incurred,whetheror not cashis paid b. when they are incurredand paid at the sametime c. ifthey are paid before they are incurred d. if they are paid after they are incurred 22. Adjustingentriesare a. the sarneas correctirrgentries b. neededto bring accountsLrpto dateand nratchrevenlleand expense c. optiorialundergenerallyacceptedaccountingprinciples d. rarelyneededin largecompanies 23. Generallyacceptedaccountingprinciplesrequiresthat companiesusethe _ a. cashbasis b. deferralbasis c. accrualbasis d. accountbasis

of accounting.

24. Which accountwould norrnally4! requirearradjLrsting entry? a. WagesExpense b. AccountsReceivable c. AccumulatedDepreciation d. Smith,Capital 2 5 . T h e b a l a n c e i n t h e o f f i c e s u p p l i e s a c c o u n t o n Jl uwnaes $ 6 , 3 0 0 , s u p p l i e s p u r c h a s e d d u r i n g J u n e w e r e e0 a .m o u n t t o b e u s e d f o r t h e a p p r o p r i a t e $ 3 , l 0 0 , a n d t h e s u p p l i e s o n h a n d a t J u n e 3 0 w e r e $ 2T, l5r 0 adjustirrgentry is a, $3,700 b. $I 1,900 c. $5,700 d. $6,900 26. A businesspaysweekly salariesof $20,000on Fridayfor a five-dayweek endingon that day. The adjusting entrynecessary at the end ofthe fiscal periodendingon Tuesdayis a. debit SalariesPayable,$8,000;creditCash,$8,000 b. debit SalaryExpense,$8,000;creditDrawing,$8,000 c. debit SalaryExpense,$8,000;credit SalariesPayable,$8,000 d. debit Drawing,$8,000;creditCash,$8,000 27. The adjustingentry to recordtlie depreciationof equipmentfor the fiscal period is a. debitDepreciation Expense;creditEquiprnent b. debit DepreciationExpense;creditAccumulatedDepreciation c. debitAccurnulatedDepreciation;credit Depreciatiorr Expense d, debit Equipment;creditDepreciationExpense

Name:

ID: A

28, The incomestatementis preparedfrom: a. the adjLrsted trial balance. b. the incomestaternent columnsof the work sheet. c. eitherthe adjustedtrial balanceor the inconlestatenleltt columnsof the work sl,eet. d. boththe adjLrsted trial balanceand the incorrestatementcolumnsof the work sheet. 29. The Statementof Owner's Equity shouldbe prepared a. beforethe incomestatementand afterthe balancesheet b. beforethe incomestatementand balancesheet c. afterthe incomestatementand balancesheet d. afterthe incomestatementand beforethe balancesheet Usethe following irrformationirr the adjustedtrial balancefbr StocktonCompanyto answerthe followir-rg questions. StocktonConrpanv AdiustedTrial Balance For the Year endedDecernber3 2010 Cash AccountsReceivable PrepaidExperrses Equipment Accumulated Depreciation AccountsPayable NotesPayable Bob Steely,Capital Bob Steelv.Withdrawals FeesEarned WagesExpense RentExpense

s 6.030

UtilitiesExpense

775 250 85 $28"890

Depreciatiorr Expense Miscellaneous Exoense Totals

3 0 . Determine thenetincome(loss)for theperiod. a. b. c, d.

Net Income$2,390 Net Loss$790 Net Loss$5.570 N e tI n c o m $ e3,180

2 . 10 0 700

r3.700 $ t,100 1.900 4.200 12.940 790 8.750

2,500

r.960

$28,890

Name:

3 l.

ID: A Determine the owner'sequityendingbalancefor the period. a. $12,150 b. $15,330 c. $16,120 d. $12,940

32. Which of the following accountsshouldbe closedto IncomeSummaryat the end of the fiscalyear? a. SuppliesExpense b. AccumulatedDepreciation c. PrepaidInsurance d. UnearnedRent Usethe followingworksheetto answerthe followingqLrestions. FinleyCompany Worksheet For the YearEndedDecember31,2010

AccountTitle Cash Accor-rnts Receivable SLrpplies Equipment AccumulatedDepr-Equio AccountsPayable

AdjustedTrial IncomeStatement Balance Debit Credit Dcbit Credit 48,000 18,000 6.000 57,000 18,000

Totals Net Income(Loss)

Debit

r 8.000 6.000 57,000 18.000 30.000

6,000

33,000

33.000

3,000

3.000 141.000

141.000

63,000

63,000

r8.000

r8.000 r5.000

15.000

Credit

48.000

30,000 6,000

WasesPavable C, Finley,Capital . rawins C. FinleyD FeesEarned WagesExperrse RentExpense Deoreciatiorr Exoense

BalanceSheet

228"000 228.000 96,000 1 4 1 . 0 0 0 1 3 2 . 0 0 0 87.000 4s.000 4s.000 1 4 1 . 0 0 0 1 4 1 . 0 0 0 132.000 r32.000

33. ThejoLrrnalentryto closerevenues would be: a . d e b i tI n c o m eS u m m a r y$ 1 4 1 , 0 0 0c,r e d i tF e e sE a r n e d$ 1 4 1 , 0 0 0 b . d e b i tC . F i r r l e yC, a p i t a $l 1 4 1 , 0 0 0c,r e d i tF e e sE a r n e d$ 1 4 1 , 0 0 0 c. debitFeesEarned$ 141,000;creditIncomeSummary$ 141,000 d . c r e d i tF e e sE a r n e d$ 1 4 1 , 0 0 0c;r e d i tC . F i n l e y C , a p i t a$l 1 4 1 , 0 0 0

Name:

34. Based on thepreceding trialbalance, theentryto closeexpenses wouldbe: a. WagesExpense 63,000 RentExpense | 8,000 Depreciation Expense 15,000 IncomeSummary 96,000 b. Expenses 96,000 Irrcome Summary 96,000 c. WagesExpense 63,000 RentExpense 18,000 DepreciationExpense 15,000 C. Finley,Drawing 96,000 d. Income Suntmary 96,000 WagesExpense 63,000 RentExperrse 18,000 Depreciation Expense15,000

ID: A

ID: A

T e s tI - C h a p t e 1 r ,2 , 3 & AnswerSection MULTIPLE CHOICE L ANS: D PTS: I DIF: Easy NAT: AACSBAnalyticI AICPAFN-Measuremenr 2. ANS: D PTS: I DIF: Easy N A T : A A C S BA r r a l y t iIcA t C p AB B - l n d u s t r y 3 . A N S :C PTS: I DIF: Moderate NAT: AACSBAnalyticI AICPAFN-Measurernent 4. ANS: D

PTS: I

DIF: Moderate

NAT: AACSBAnalyticI AICPABB-tndustry 5. ANS:B PTS: I DIF: Difficult NAT: AACSB AnalyticIAICPA FN-Measurement 6, ANS: A PTS: I DIF: Easy NAT: AACSB AnalyticI AICPA FN-Measurement 7. ANS: D PTS: I DIF: Easy NAT: AACSB AnalyticI AICPA FN-Measuremerrr 8. ANS: D PTS: I DIF: Moclerate NAT: AACSB AnalyticI AICPA FN-Measurement 9. ANS: C PTS: I DIF: Easy NAT: AACSB ArralyticI AICPA FN-Measuremenr 10. ANS: D PTS: I DIF: Easy NAT: AACSB AnalyticI AICPA FN-Measurement ll. ANS: C PTS: I DIF: Easy NAT: AACSB AnalyticI AICPA FN-Measuremenr 12. ANS: A PTS: I DIF: Difficutt NAT: AACSI) AnalyticI AICPA FN-Measuremenr 13, ANS: B PTS: I DIF: Moderare NAT: AACSB AnalyticI AICpA FN-Measurerrrenr 14. ANS: D PTS: I DIF: f:asy NAT: AACSB AnalyticI AICPA FN-Measurement 15. ANS: A PTS: I DtF: Moderare NAT: AACSB Analytic I AICPA FN-Measurement 16. ANS: D PTS: I DIF: Difficutt NAT: AACSB AnalyticiAICPA FN-Measurement 17. ANS: D PTS: I DtF: DifficLrlt NAT: AACSB AnalyticI ATCPAFN-Measuremenr 18. ANS: D PTS: I DtF: Moderare NAT: AACSB AnalyticIAICPA FN-Measurement 19. ANS: D PTS: I DIF: Difficutt NAT: AACSB AnalyticIAICPA FN-Measuremenr 20. ANS: A PTS: I DIF: Easy NAT: AACSB Analytic I AICPA FN-Measurement

OBJ: 0l-01 OBJ: 0l-01 OBJ: 0l-02 OBJ: 0l-02 OBJ: 0l-02 OBJ: 0l-03 OBJ: 0l-03 OBJ: 0l-03 OBJ: 02-01 OBJ: 02-01 OBJ: 02-01 OBJ: 02-01 OBJ: 02-02 OBJ: 02-02 OBJ: 02-02 OBJ: 02-02 OBJ: 02-01 OBJ: 02-02 OBJ: 02-01 OBJ: 02-02

ID: A 21. ANS: A PTS: I DIF: Moclerate NAT: AACSBAnalyticI AICPAFN-Measuremenr 22. ANS: B PTS: I DIF: Moderate NAT: AACSBAnalyticI AICPAFN-Measuremenr 23. ANS: C PTS: I DIF: Easy NAT: AACSBAnalyticI AICPA FN-Measurement 24. ANS: D PTS: I DtF: Difficult NAT: AACSBAnalyticI AICPAFN-Measurerrrent 25. ANS: D PTS: I DIF: Difficult NAT: AACSBAnalyticI AICPAFN-Measuremenr 26. ANS: C PTS: I DIF: Difficult NAT: AACSBAnalyticI AICPAFN-Measurement 27. ANS: B PTS: I DIF: Moderate NAT: AACSBAnalyticIAICPAFN-Measurement 28. ANS: C PTS: I DIF: Moderate NAT: AACSBAnalyticI AICPA FN-Measurement 29. ANS: D PTS: I DIF: Moderate NAT: AACSBAnalyticI AICPAFN-Measurernent 30. ANS: D PTS: I DIF: Moderate NAT: AACSBAnalyticI AICPAFN-Measurement 31. ANS: B PTS: I DIF: Difficult NAT: AACSBAnalyticI AICPAFN-Measurement 32. ANS: A PTS: I DIF: Moderate NAT: AACSBAnalyticI AICPAFN-Measurernent 33. ANS: C PTS: I DIF: Moderate NAT: AACSBAnalyticI AICPA FN-Measurement 34. ANS: D PTS: I DIF: Moderate NAT: AACSBAnalvticIAICPA FN-Measurement

OBJ: 03_01 OBJ: 03_01 OBJ: 03_01 OBJ: 03-02 OBJ: 03-02 OBJ: 03-02 OBJ: 03-02 OBJ: 04-02 OBJ: 04-02 OBJ: 04-02 OBJ: 04-02 OBJ: 04-03 OBJ: 04-03 OBJ: 04-03