Reference no: EM13857105

1- f a company receives $11,100 from the stockholders to establish a corporation, the effect on the accounting equation would be:
Assets decrease $11,100 and equity decreases $11,100.
Assets increase $11,100 and liabilities decrease $11,100.
Assets increase $11,100 and liabilities increase $11,100.
Liabilities increase $11,100 and equity decreases $11,100.
Assets increase $11,100 and equity increases $11,100.

2- If a company purchases equipment costing $3,800 on credit, the effect on the accounting equation would be:
Assets increase $3,800 and liabilities decrease $3,800.
Equity decreases $3,800 and liabilities increase $3,800.
Liabilities decrease $3,800 and assets increase $3,800.
Assets increase $3,800 and liabilities increase $3,800.
Equity increases $3,800 and liabilities decrease $3,800.

3- If equity is $389,000 and liabilities are $185,000, then assets equal:
$204,000.
$185,000.
$389,000.
$574,000.
$963,000.

4- On August 31 of the current year, the assets and liabilities of Gladstone, Inc. are as follows: Cash $31,500; Supplies, $730; Equipment, $11,100; Accounts Payable, $9,900. What is the amount of stockholders' equity as of August 31 of the current year?
$32,700
$33,430
$53,230
$11,230
$31,970
5- If the liabilities of a business increased $77,000 during a period of time and the Stockholders' Equity in the business decreased $31,000 during the same period, the assets of the business must have:
Decreased $108,000.
Decreased $46,000.
Increased $31,000.
Increased $46,000.
Increased $108,000.

6- If assets are $375,000 and equity is $125,000, then liabilities are:
$125,000.
$250,000.
$375,000.
$500,000.
$625,000.

7- If assets are $405,000 and equity is $140,000, then liabilities are:
$140,000.
$265,000.
$405,000.
$545,000.
$670,000.

 

8- Use the following information for Meeker Corp. to determine the amount of equity to report.

Cash 78,000
Buildings 129,500
Land 215,800
Liabilities $135,000

$558,300.
$299,300.
$423,300.
$29,300.
$288,300.

9-Determine the net income of a company for which of the following information is available for the month of July.

Employee salaries expense $196,000
Interest expense 26,000
Rent expense 36,000
Consulting revenue 464,000
$206,000.
$242,000.
$278,000.
$464,000.
$722,000.

10- Savvy Sightseeing had beginning equity of $89,000; revenues of $141,000, expenses of $82,000, and dividends to stockholders of $10,700. Calculate the ending equity.
$137,300.
$59,000.
$148,000.
$19,300.
$30,000.

 

 

11- Richard Redden contributed $83,000 in cash and land worth $156,000 to open a new business, RR Consulting, Inc. Which of the following general journal entries will RR Consulting, Inc. make to record this transaction?
Debit Assets $239,000; credit Common Stock $239,000.
Debit Cash and Land, $239,000; credit Common Stock $239,000.
Debit cash $83,000; debit land $156,000; credit Common Stock $239,000.
Debit Common Stock $239,000; credit cash $83,000; credit Land $156,000.
Debit Common Stock $239,000; credit Assets $239,000.

12-Able Graphics received a $460 utility bill for the current month's electricity. It is not due until the end of the next month which is when they intend to pay it. Which of the following general journal entries will Able Graphics make to record this transaction?
Utilities Expense 460
Cash 460
Cash 460
Utilities Expense 460
Utilities Expense 460
Accounts Payable 460
Accounts Payable 460
Utilities Expense 460
Utilities Payable 460
Cash 460

13-During the month of February, Victor Services had cash receipts of $8,000 and cash disbursements of $9,600. The February 28 cash balance was $2,800. What was the February 1 beginning cash balance?
$1,200.
$1,600.
$4,400.
$0.
$6,800.

14-During the month of March, Harley's Computer Services made purchases on account totaling $45,700. Also during the month of March, Harley was paid $11,300 by a customer for services to be provided in the future and paid $38,000 of cash on its accounts payable balance. If the balance in the accounts payable account at the beginning of March was $78,400, what is the balance in accounts payable at the end of March?
$86,100.
$97,400.
$7,700.
$74,800.
$6,000

15-Smiles Entertainment had the following accounts and balances at December 31:

Account Debit Credit
Cash $10,700
Accounts Receivable 2,140
Prepaid Insurance 2,680
Supplies 1,140
Accounts Payable $5,350
Common Stock 5,320
Service Revenue 7,700
Salaries Expense 570
Utilities Expense 1,140
________________________________________ ________________________________________
Totals $18,370 $18,370
________________________________________ ________________________________________

16-Using the information in the table, calculate the company's reported net income for the period.
$1,240.
$4,210.
$4,850.
$11,240.
$5,990.

17-A bookkeeper has debited an account for $5,700 and credited a liability account for $3,100. Which of the following would be an incorrect way to complete the recording of this transaction:
Credit another asset account for $2,600.
Credit another liability account for $2,600.
Credit an expense account for $2,600.
Credit the Common Stock account for $2,600.
Debit another asset account for $2,600.

18- Ralph Pine Consulting received its telephone bill in the amount of $530, and immediately paid it. Pine's general journal entry to record this transaction will include a:
Debit to Telephone Expenses for $530.
Credit to Accounts payable for $530.
Debit to Cash for $530.
Credit to Telephone Expenses for $530.
Debit to Accounts payable for $530.

19-Wiley Consulting purchased $7,700 worth of supplies and paid cash immediately. Which of the following general journal entries will Wiley Consulting make to record this transaction?
Accounts Payable 7,700
Supplies 7,700
Cash 7,700
Supplies 7,700
Supplies 7,700
Cash 7,700
Supplies 7,700
Accounts Payable 7,700
Supplies Expense 7,700
Accounts Payable 7,700

20- Trimble Graphic Design receives $1,550 from a client billed in a previous month for services provided. Which of the following general journal entries will Trimble Graphic Design make to record this transaction?
Cash 1,550
Accounts Receivable 1,550
Cash 1,550
Unearned Design Revenue 1,550
Accounts Receivable 1,550
Unearned Design Revenue 1,550
Cash 1,550
Design Revenue 1,550
Accounts Receivable 1,550
Cash 1,550

21- Mary Martin, the owner of Martin Consulting, Inc., started the business by investing $65,000 cash. Identify the general journal entry below that Martin Consulting, Inc. will make to record the transaction.
Cash 65,000
Common stock 65,000
Common stock 65,000
Cash 65,000
Investments 65,000
Cash 65,000
Investments 65,000
Common stock 65,000
Cash 65,000
Increased Equity 65,000

22- A company purchased $3,800 of merchandise on July 5 with terms 1/10, n/30. On July 7, it returned $420 worth of merchandise. On July 8, it paid the full amount due. The amount of the cash paid on July 8 equals:
$420.
$3,342.
$3,346.
$3,380.
$3,800

23- A company has sales of $409,200 and its gross profit is $172,700. Its cost of goods sold equals:
$(236,500).
$409,200.
$172,700.
$236,500.
$581,900.

24- Cushman Company, Inc. had $832,000 in net sales, $364,000 in gross profit, and $208,000 in operating expenses. Cost of goods sold equals:
$260,000.
$676,000.
$156,000.
$468,000.
$624,000.

25- A company purchased $10,200 of merchandise on June 15 with terms of 3/10, n/45, and FOB shipping point. The freight charge was $600. On June 20, it returned $960 of that merchandise. On June 24, it paid the balance owed for the merchandise taking any discount it is entitled to. The cash paid on June 24 equals:
$9,224.
$10,460.
$10,800.
$10,560.
$9,563.

26- A company purchased $9,700 of merchandise on June 15 with terms of 3/10, n/45. On June 20, it returned $485 of that merchandise. On June 24, it paid the balance owed for the merchandise taking any discount it was entitled to. The cash paid on June 24 equals:
$8,939.
$9,409.
$9,700.
$9,215.
$8,987.

27-Cushman Company, Inc. had $842,000 in sales, sales discounts of $12,630, sales returns and allowances of $18,945, cost of goods sold of $399,950, and $289,650 in operating expenses. Gross profit equals:
$810,425.
$120,825.
$410,475.
$423,105.
$429,420.

28- Prentice Company, Inc. had cash sales of $95,450, credit sales of $84,150, sales returns and allowances of $2,175, and sales discounts of $3,950. Prentice's net sales for this period equal:
$95,450.
$173,475.
$175,650
$177,425.
$179,600.

29- On February 3, Smart Company sold merchandise in the amount of $4,600 to Truman Company, with credit terms of 3/10, n/30. The cost of the items sold is $3,175. Smart uses the perpetual inventory system. Truman pays the invoice on February 8, and takes the appropriate discount. The journal entry that Smart makes on February 8 is:
Cash 3,175
Accounts receivable 3,175
Cash 4,600
Accounts receivable 4,600
Cash 4,520
Sales discounts 80

Accounts receivable 4,600

Cash 3,095

Accounts receivable 3,095

Cash 4,462
Sales discounts 138

Accounts receivable 4,600

30- Garza Company had sales of $155,000, sales discounts of $2,325, and sales returns of $3,720. Garza Company's net sales equals:
$6,045.
$148,955.
$152,675.
$155,000.
$161,045.

31- A company has sales of $403,800 and its gross profit is $170,300. Its cost of goods sold equals:
$(233,500).
$403,800.
$170,300.
$233,500.
$574,100.

32- A company has sales of $715,400 and cost of goods sold of $286,400 Its gross profit equals:
$142,600.
$715,400.
$286,400.
$429,000.
$1,001,800.