Reference no: EM13909864

Question 1

Which of the following statements is true regarding the classified balance sheet?

a Current assets include cash, accounts receivable, and equipment.
b Plant, property, and equipment is one category of long-term assets.
c Current liabilities include accounts payable, salaries payable, and notes receivable.
d Stockholders' equity is subdivided into current and long-term cat

Question 2
A company received cash from a customer in payment for future delivery services. The correct debitand credit are:

a. Debit Cash, credit Unearned Delivery Fees.
b. Debit Cash, credit Delivery Fee Revenue.
c. Debit Accounts Receivable, credit Delivery Fee Revenue.
d. None of the above.

Question 3

When services are performed on account, what is the effect?
a. Both cash and retained earnings decrease.
b. Both cash and retained earnings increase.
c. Both accounts receivable and retained earnings increase.
d. Accounts payable increases and retained earnings decreases.

Question 4

Which of the following is not a correct form of the accounting equation?
a. Assets = Equities.
b. Assets = Liabilities + Stockholders' equity.
c. Assets - Liabilities = Stockholders' equity.
d. Assets + Stockholders' equity = Liabilities.

Question 5
Assume the following facts regarding the construction of a bridge:
Construction costs this period...... USD 3,000,000
Total estimated construction costs...10,000,000
Total sales price............... 15,000,000
The revenue that should be recognized this period is:
a. USD 3,000,000.
b. USD 4,500,000.
c. USD 5,000,000.
d. USD 6,500,000.


Question 6

The ending balance in the retained earnings is shown in the:

a. Balance sheet
b. Statement of retained earnings
c. Income statement
d. Both (a ) and ( b)


Question 7

Which of the following accounts may appear on a post-closing trial balance?

a. Cash, Salaries payable, and Salaries Expense
b. Cash, Service Revenue, and Salaries Expense
c. Cash, Salaries payable, and Capital
d. Cash, Salaries payable, and Service Revenue





Question 8

At the end of a certain year, a company had total assets of $14,520 and equity of $9,120. How much were its liabilities?

a. $23,640
b. $14,520
c. $5,400
d. $9,120

Question 9

Which of the following requires accounting information to be complete, neutral, and free from material error?

a. Economic entity assumption
b. Cost principle
c. Faithful representation concept
d. Going concern assumption


Question 10

Assume that cash is paid for Utilities Expense to cover a five-year period. The recommended debit and credit are:

a. Debit cash, Credit Utilities Expense
b. Debit Utilities Expense, Credit cash
c. Debit Prepaid Utilities expense, Credit Cash
d. Debit cash, Credit Prepaid Utilities Expense

Question 11

ABC Properties purchased office supplies on account for $400. Which journal entry records the payment of those office supplies?

a. Accounts payable $400
Accounts Receivable $400

b. Accounts payable $400
Cash $400

c. Cash $400
Accounts payable $400

d. Office Supplies $400
Cash $400


Question 12

Sunshine Company recorded a cash collection on account by debiting Cash and crediting Accounts payable. What will the trial balance show for this error?

a. Cash is overstated
b. The trial balance will not balance
c. Expenses are overstated
d. Liabilities are overstated


Question 13

The detailed record of the changes in a particular asset, liability, or owner's equity is called

a. A ledger
b. A journal
c. An account
d. A trial balance

Question 14

Which of the following is not an external user of a business's financial information?

a. Customers
b. Employee
c. Investors
d. Taxing authorities


Question 15

When the stockholders invested cash in the business:

a. Capital stock is debited, and Cash is credited
b. Cash is debited, Dividends is Credited
c. Cash is debited, Capital stock is credited
d. None of the above






Question 16

The left side of an account is used to record which of the following?

a. Increase
b. Debits
c. Credits
d. Debit or credit, depending on the type of account


Question 17

Which of the following statements is correct?

a. Accounts Payable is increased with a credit
b. Unearned Revenue is increased with a debit
c. Prepaid Expenses are decreased with a debit.
d. Rent Expense is increased with a credit.


Question 18

A Company performed delivery services for a customer for cash. The correct debit and credit are:

a. Debit cash, Credit unearned delivery fees
b. Debit cash, Credit Delivery Fee Revenue.
c. Debit Accounts Receivable, Credit delivery Fee Revenue
d. None of the above

Question 19

If $900 has been earned by a company's workers since the last payday in an accounting period, the necessary adjusting entry would be:

a. Debit an expense, and Credit a liability
b. Debit an expense, and Credit an asset
c. Debit a liability, and Credit an asset
d. Debit a liability, and Credit an expense

Question 20

The adjusted trial balance shows

a. Account balances after adjustments.
b. Assets and liabilities only.
c. Revenues and expenses only.
d. Amounts that may be out of balance.


Question 21

NFL Inc. has Cash of $2,400, Accounts Receivable of $3,600, and Office Supplies of $1,600. NFL owes $2,000 on Accounts Payable and Salaries Payable of $800. NFL's current ratio is

a. 2.71
b. 2.50
c. 0.63
d. 0.37


Question 22

Which of the following accounts is not closed?

a. Withdrawals
b. Service revenue
c. Depreciation Expense
d. Accumulated Depreciation


Question 23

Adjusting the accounts is the process of

a. Subtracting expenses from revenues to measure net income
b. Recording transactions as they occur during the period
c. Updating the accounts at the end of the period
d. Zeroing out account balances to prepare for the next period.


Question 24

If the balance sheet columns do not balance, the errors is most likely to exist in the:

a. General ledger
b. First six columns of the worksheet
c. General journal
d. Last six columns of the worksheet



Question 25

Net income for a period appears in all but which of the following?

a. Income statement debit column of the worksheet
b. Statement of retained earnings credit column of the worksheet
c. Statement of retained earnings
d. Balance sheet.


Question 26

The concept that requires companies to use the same accounting practices and reporting practices through time is:
a. Substance over form.
b. Consistency.
c. Articulation.
d. None of the above.


Question 27

The underlying assumptions of accounting includes all of the following except:

a. Going concern
b. Money measurement and periodicity
c. Business entity
d. Matching.

Question 28

Assets and liabilities are listed on the balance sheet in order of their

a. Adjustments.
b. Purchase date.
c. Liquidity
d. Balance.








Question 29

Which of the following accounts would be included in the plant assets category of the classified balance sheet?

a. Land held for investment
b. Accumulated depreciation
c. Office supplies
d. Mortgage payable


Question 30

Which of the following steps of the accounting cycle is not completed at the end of the period?

a. Prepare the post-closing trial balance
b. Prepare the financial statement.
c. Journalize and post the closing entries.
d. Journalize transactions as they occur.




Part 2 - Essay
Question 1

Prepare journal entries to record each of the following transactions for Plaza Inc
Company. Use the letter of the transaction in place of the date. Include an explanation for each entry.

a. Capital stock was issued for cash, USD 300,000.
b. Purchased trucks by signing a note bearing no interest, USD 210,000.
c. Earned service revenue on account, USD 4,800.
d. Collected the account receivable resulting from transaction (c), USD 4,800.
e. Paid the note payable for the trucks purchased, USD 210,000.
f. Paid utilities for the month in the amount of USD 1,800.
g. Paid salaries for the month in the amount of USD 7,500.
h. Incurred supplies expenses on account in the amount of USD 1,920.
i. Purchased another truck for cash, USD 48,000.
p. 129 of 433
j. Performed delivery services on account, USD 24,000.





Question 2
Among other items, the trial balance of Walgreen, Inc., a movie rental company, at
December 31 of the current year includes the following account balances:

Debits
Prepaid Insurance USD 10,000
Prepaid Rent USD 14,400
Supplies on Hand USD 2,800

Examination of the records shows that adjustments should be made for the following items:
a. Of the prepaid insurance in the trial balance, USD 4,000 is for coverage during the months
after December 31 of the current year.
b. The balance in the Prepaid Rent account is for a 12-month period that started October 1 of the
current year.
c. USD 300 of interest has been earned but not received.
d. Supplies used during the year amount to USD 1,800.

Prepare the annual year-end adjusting journal entries at December 31.

Question 3

The transactions listed below are those of Adidas Corporation, Inc.,
for April 2010:

Apr. 1 Cash of USD 500,000 was received for capital stock issued to the owners.
3 Rent was paid for April, USD 3,500.
6 Trucks were purchased for USD 56,000 cash.
7 Office equipment was purchased on account from Wagner Company for USD 76,800.
14 Salaries for first two weeks were paid, USD 12,000.
15 USD 28,000 was received for services performed.
18 An invoice was received from Roger's Gas Station for USD 400 for gas and oil used during
April.
23 A note was arranged with the bank for USD 80,000. The cash was received, and a note
promising to return the USD 80,000 on 2010 May 30, was signed.
29 Purchased trucks for USD 73,600 by signing a note.
30 Salaries for the remainder of April were paid, USD 14,400.

Requirements:
a. . Prepare journal entries for these transactions.
b. Post the journal entries to T-accounts.#question..