1.The objectives of financial reporting are met in large part by a set of financial statements. Of the following which is not one of these statements?
a. Statement of Cash Flows
b. Statement of Financial Position
c. Federal Income Tax Return
d. Income Statement
2.The primary assurance that financial statements issued by management are complete and reliable is by:
a. An audit performed by a certified public accountant
b. An audit performed by the IRS
c. Internal controls
d. Generally accepted accounting principles
3.During the current year, the assets of The Big Dial increase by $132,000, and the liabilities increase by $80,000. As a result, owners' equity:
a. Increases by $52,000 during the year
b. Decreases by $52,000 during the year
c. Increases by $212,000 during the year
d. Is $52,000 at the end of the year
4.A business purchases land and building, giving in exchange $225,000 cash and a note payable for $95,000. This transaction:
a. Increases owners' equity
b. Decreases total assets
c. Decreases total liabilities
d. Increases total assets
5.The account balances for HydroTech as of May 31, 2001, are listed below in random order:
Accounts Payable............$10,000
Accounts Receivable.........12,000
Building...........................40,000
Cash................................6,000
Equipment.......................16,000
Land...............................50,000
Notes Payable..................28,000
Capital Stock...................86,000
Refer to the above data. The balance in the Asset account is:
a. $86,000
b. $124,000
c. $144,000
d. Some other amount
6.The account balances for HydroTech as of May 31, 2001, are listed below in random order:
Accounts Payable............$10,000
Accounts Receivable.........12,000
Building...........................40,000
Cash................................6,000
Equipment.......................16,000
Land...............................50,000
Notes Payable..................28,000
Capital Stock...................86,000
On June 3, HydroTech collected $7,000 of its accounts receivable and paid $4,000 of its accounts payable. In addition, $2,400 of additional stock was issued for cash.
Refer to the above data. On June 4, the balance in the Cash account is:
a. Some other amount
b. $11,400
c. $9,000
d. $5,400
7.The account balances for HydroTech as of May 31, 2001, are listed below in random order:
Accounts Payable............$10,000
Accounts Receivable.........12,000
Building...........................40,000
Cash................................6,000
Equipment.......................16,000
Land...............................50,000
Notes Payable..................28,000
Capital Stock...................86,000
8.On June 3, HydroTech collected $7,000 of its accounts receivable and paid $4,000 of its accounts payable. In addition, $2,400 of additional stock was issued for cash. On June 4, another $3,000 of stock was issued for cash.
Refer to the above data. On June 5, the balance in the Capital Stock Account is:
a. $79,000
b. Some other amount
c. $81,400
d. $91,400
Question 8
The account balances for HydroTech as of May 31, 2001, are listed below in random order:
Accounts Payable............$10,000
Accounts Receivable.........12,000
Building...........................40,000
Cash................................6,000
Equipment.......................16,000
Land...............................50,000
Notes Payable..................28,000
Capital Stock...................86,000
On June 3, HydroTech collected $7,000 of its accounts receivable and paid $4,000 of its accounts payable. In addition, $2,400 of additional stock was issued for cash. One June 4, another $3,000 of stock was issued for cash. On June 5, new equipment costing $5,000 was acquired. A cash payment was made for $1,000 and a Note Payable of $4,000 was issued for the balance. In a trial balance prepared on June 5, the sum of the credit column is:
Note: Be sure to take into account all transactions from June 3, 4 and 5.
a. $123,000
b. $125,000
c. $129,400
d. Some other amount
9.The account balances for HydroTech as of May 31, 2001, are listed below in random order:
Accounts Payable............$10,000
Accounts Receivable.........12,000
Building...........................40,000
Cash................................6,000
Equipment.......................16,000
Land...............................50,000
Notes Payable..................28,000
Capital Stock...................86,000
On June 3, HydroTech collected $7,000 of its accounts receivable and paid $4,000 of its accounts payable. In addition, $2,400 of additional stock was issued for cash. One June 4, another $3,000 of stock was issued for cash. On June 5, new equipment costing $5,000 was acquired. A cash payment was made for $1,000 and a Note Payable of $4,000 was issued for the balance. The trial balance prepared on June 5, would, therefore, be as follows:
HydroTech
Trial Balance
June 5, 2001
Debit Credit
Cash 13,400
Accounts Receivable 5,000
Equipment 21,000
Land 50,000
Building 40,000
Accounts Payable 6,000
Notes Payable 32,000
Capital Stock 91,400
TOTAL 129,400 129,400
On June 6, the bookkeeper for HydroTech makes this entry:
Supplies 6,300
Cash 1,500
Accounts Payable 4,800
As a result of this transaction:
Select one:
a. Increases total assets $6,300
b. Decreases total assets
c. Involves the sale of supplies for $6,300
d. Increases liabilities
10.On March 2, purchased auto cleaning supplies from Pip Boys for $240 on account. How would this transaction be recorded in the two-column journal for Marcs Detailing?
Select one:
a. None of the above
b. Debit Supplies for 240, credit Accounts Receivable for 240
c. Debit Accounts Receivable for 240, credit Supplies for 240
d. Debit Supplies for 240, credit Accounts Payable for 240
11.On March 4, collected an account receivable of $470 from a customer, At-Your-Service Limousines. How would this transaction be recorded in the two-column journal for Marcs Detailing?
a. None of the above
b. Debit Accounts Payable for 470, credit Cash for 470
c. Debit Accounts Receivable for 470, credit Cash for 470
d. Debit Cash for 470, credit Accounts Receivable for 470
12.On March 5, Paid $320 in partial payment of an account payable to Sears for equipment purchased in February.How would this transaction be recorded in the two-column journal for Marcs Detailing?
Select one:
a. Debit Accounts Payable for 320, Credit Cash for 320
b. Debit Accounts Receivable for 320, Credit Cash for 320.
c. Debit Cash for 320, Credit Accounts Payable for 320
d. Debit Equipment for 320, Credit Accounts Payable for 320
13.March 7, Issued capital stock in exchange for $2,500 cash. How would this transaction be recorded in the two-column journal for Marcs Detailing?
a. Debit Accounts Payable for 2,500, credit Drawing for 2,500
b. Debit Cash for 2,500, credit Capital Stock 2,500
c. Debit Accounts Receivable for 2,500, credit Capital Stock for 2,500.
d. Debit Capital Stock for 2,500, credit Cash for 2,500.
14.On March 9, purchased office equipment from Jeromes Warehouse for $3,300; paid $1,000 cash and issued a note payable due in 90 days for the balance. How would this transaction be recorded in the two-column journal for Marcs Detailing?
a. Debit Office Equipment for 3,300, credit Cash for 1,000, credit Notes Payable for 2,300.
b. Debit Cash for 1,000, debit Accounts Receivable for 2,300, credit Office Equipment for 3,300.
c. Debit Cash for 1,000, debit Notes Payable for 2,300, credit Office Equipment for 3,300.
d. Debit Office Equipment for 3,300, credit Cash for 1,000, credit Notes Receivable for 2,300
15.West Coast Potters purchased a kiln on February 1 for $7,200 which is guaranteed to have a useful life of 10 years. Assuming adjusting entries are prepared monthly, what is the book value of the kiln on June 30?
a. $7,200
b. $6,480
c. $300.
d. $6,900.
16.Village Square Cinema sells books of movie tickets for $100, which contain tickets to admission to 20 movies. During July, 50 books of tickets were sold for $5,000 and this amount was credited to Unearned Admissions Revenue. By the end of July, it was determined that 400 movie tickets had been used by customers who had purchased the ticket books. The July 31 adjusting entry is:
a. Debit Admissions Revenue $2,000 and credit Unearned Admissions Revenue $2,000
b. Debit Unearned Admissions Revenue $4,000 and credit Admissions Revenue $4,000.
c. Debit Admissions Revenue $3,000 and credit Unearned Admissions Revenue $3,000.
d. Debit Unearned Admissions Revenue $2,000 and credit Admissions Revenue $2,000.
17.A December 31 trial balance (before December adjustments) shows Office Supplies of $600 and Office Supplies Expense of $1,010. A December adjusting entry recorded office supplies expense of $170. After the December adjusting entries have been posted, what is the proper balance in the Office Supplies account on December 31?
a. $840.
b. $770.
c. $1,180.
d. $430.
18.Net income of Samurai Company was $40,000 before any year-end adjusting entries were made. The following adjustments are necessary: interest accrued on a company savings account, $110; portion of insurance expiring, $300; portion of fees collected in advance now earned, $2,400. Net income as shown in the income statement for the current year should be:
a. $42,210
b. $38,010
c. $41,990
d. $37,410
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The adjusting entry to recognize interest owed by Bradley Tools to the bank for May was omitted in month-end procedures. As a result of this error, Bradleys
Select one:
a. May net income is overstated and May 31 liabilities understated
b. May expenses are understated and May 31 ownerâ??s equity understated.
c. May net income is understated and May 31 assets overstated.
d. May expenses are understated and May 31 assets overstated.
20.The accountant for Timesure Inc. prepared the following trial balance at January 31, 2000, after one month of operations:
Debit Credit
Cash 5,400
Accounts Receivable 4,200
Unexpired Insurance 1,800
Office Equipment 18,000
Unearned Cosulting Fees 3,000
Capital Stock 15,300
Retained Earnings, January 1, 2000 0
Dividends 3,000
Consulting Fees Earned 25,000
Salaries Expense 7,400
Utilities Expense 1,400
Rent Expense 1,800
Supplies Expense 300
TOTALS 43,000 43,300
What adjusting journal entry should be made to record consulting services rendered to a client in January, not yet billed or recorded, $1,900?
a. Debit Unearned Consulting Fees Earned for 1,900.and credit Consulting Fees Earned for 1,900.
b. Debit Cash for 1,900 and credit Consulting Fees Earned for 1,900.
c. Debit Accounts Receivable for 1,900 and credit Consulting Fees Earned for 1,900.
d. Debit Accounts Receivable for 1,900 and credit Unearned Consulting Fees Earned.for 1,900.
21.The accountant for Timesure Inc. prepared the following trial balance at January 31, 2000, after one month of operations:
Debit Credit
Cash 5,400
Accounts Receivable 4,200
Unexpired Insurance 1,800
Office Equipment 18,000
Unearned Cosulting Fees 3,000
Capital Stock 15,300
Retained Earnings, January 1, 2000 0
Dividends 3,000
Consulting Fees Earned 25,000
Salaries Expense 7,400
Utilities Expense 1,400
Rent Expense 1,800
Supplies Expense 300
TOTALS 43,000 43,300
What adjusting journal entry should be made to record the posrtion of insurance expiring in January, $150?
a. Debit Insurance Expense for 150 and credit Cash for 150.
b. None of the above.
c. Debit Insurance Expense for 150 and credit Unexpired Insurance for 150.
d. Debit Unexpired Insurance for 150 and credit Insurance Expense for 150.
22.The accountant for Timesure Inc. prepared the following trial balance at January 31, 2000, after one month of operations:
Debit Credit
Cash 5,400
Accounts Receivable 4,200
Unexpired Insurance 1,800
Office Equipment 18,000
Unearned Cosulting Fees 3,000
Capital Stock 15,300
Retained Earnings, January 1, 2000 0
Dividends 3,000
Consulting Fees Earned 25,000
Salaries Expense 7,400
Utilities Expense 1,400
Rent Expense 1,800
Supplies Expense 300
TOTALS 43,000 43,300
What adjusting journal entry should be made to record the portion of Income Taxes Expense for January of $2,000.
a. Debit Income Taxes Payable and credit Cash for 2,000.
b. Debit Income Taxes Expense for 2,000 and credit Income Taxes Payable for 2,000
c. Debit Prepaid Taxes and credit Cash for 2,000.
d. None of the above.
23.below is the adjusted trial balance of TWK, Inc. at December 31:
Debit Credit
Cash 10
Accounts Receivable 20
Equipment 200
Accounts Payable 15
Capital Stock 100
Retained Earnings 50
Dividends 5
Service Revenue 180
Salaries Expense 80
Depreciation Expense 20
Refer to the above data. Which accounts are closed to income summary?
a. All accounts that are not nominal.
b. All accounts.
c. Revenues and expenses
d. Revenues, expenses, and dividends.
24.Presented below is the adjusted trial balance of TWK, Inc. at December 31:
Debit Credit
Cash 10
Accounts Receivable 20
Equipment 200
Accounts Payable 15
Capital Stock 100
Retained Earnings 50
Dividends 5
Service Revenue 180
Salaries Expense 60
Depreciation Expense 20
Refer to the above data. What is the balance in income summary before it is closed to retained earnings?
a. $100
b. $65
c. $180.
d. $75
25.Presented below is the adjusted trial balance of TWK, Inc. at December 31:
Debit Credit
Cash 10
Accounts Receivable 20
Equipment 200
Accounts Payable 15
Capital Stock 100
Retained Earnings 50
Dividends 5
Service Revenue 180
Salaries Expense 80
Depreciation Expense 20
Supplies Expense 10
Refer to the above data. What is the balance in retained earnings at December 31?
a. $115
b. $70
c. $50.
d. $65.