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Study Resources (Accounting)

1.4   Learning Objective 1-4 1) The increase or decrease in the owner's equity is reported on the: A) income statement. B) statement of owner's equity. C) balance sheet. D) All of these are correct. 2) Which financial statement is prepared first? A) Statement of Owner's Equity B) Balance Sheet C) Income Statement D) None of the above 3) The financial statement.
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11) If total liabilities are $18,000 and owner's equity is $21,000, the total assets must be: A) $39,000. B) $5,000. C) $20,000. D) $17,000. 12) If total liabilities are $1,000 and total assets are $8,000, owner's equity must be: A) $7,000. B) $3,000. C) $10,000. D) $13,000. 13) How does the purchase of office equipment on account affect the accounting.
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31) Accounts Receivable has a normal balance of $1,100. After collecting $800, the balance in the account is: A) debit $300. B) debit $1,900. C) credit $300. D) credit $1,900. 32) The beginning balance in Cash was $3,500. Additional cash of $2,000 was received. Checks were written totaling $2,500. The cash balance is: A) $2,000. B) $6,000. C).
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76) Accounts Payable is an asset account that is increased on the credit side. 77) The Accounts Receivable account is increased by a debit. 78) Identify the normal balance for each of the following accounts by placing a Dr. (debit) or a Cr. (credit) in the space provided. ________ 1. Computer ________ 2. M..
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11) If Prepaid Rent for the period is not adjusted: A) assets will be overstated and expenses will be overstated. B) assets will be overstated and expenses will be understated. C) assets will be understated and expenses will be overstated. D) assets will be understated and expenses will be understated. 12) If the Supplies account.
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31) Which of the following transactions would cause an asset to increase and the owner's equity to increase? A) The owner invested cash in the business. B) The business incurred an expense on credit. C) The business bought supplies on account. D) The owner withdrew cash from the business. 32) Which of the following would.
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2.1   Learning Objective 2-1 1) A chart of accounts: A) is set up in alphabetical order. B) includes account balances. C) is a listing of all the accounts used by a company. D) All of the above are correct. 2) Accounts Payable had a normal starting balance of $800. There were debit postings of $600 and.
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11) The financial statements contain debit and credit columns. 12) Withdrawals and expenses are reported on the income statement. 13) Accounts Payable appears on the income statement. 14) Wages Expense appears on the balance sheet. 15) Determine the ending owner's equity of a business having a beginning owner's equity of $9,500, additional investments of.
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3.2   Learning Objective 3-2 1) The purpose of posting is to: A) list the transactions in chronological order in the journal. B) provide an explanation of the transaction. C) update the account balances in the ledger. D) correct a previous entry. 2) Posting is performed by transferring information from the journal to the: A) ledger. B) trial balance. C).
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2.4   Learning Objective 2-4 1) Which type of account would not be reported on the income statement? A) Revenue B) Expenses C) Liabilities D) None of these answers are correct. 2) Accounts Payable would appear on which financial statement? A) Balance sheet B) Income statement C) Owner's equity statement D) None of these answers are correct. 3) The left column of.
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31) A calendar year is: A) any 12-month period that a business chooses for its accounting year. B) the 12-month period beginning with January. C) the period for when a interim financial statement would be completed. D) All of these answers are correct. 32) Interim statements are prepared to: A) notify management of the company's current.
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3.3   Learning Objective 3-3 1) The informal listing of the ledger accounts and their balances in the ledger to aid in providing the equality of debits and credits is the: A) journal. B) ledger. C) income statement. D) trial balance. 2) If the debit and credit totals of a trial balance are not equal, it could.
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3.1   Learning Objective 3-1 1) The process that begins with recording business transactions and includes the completion of the financial statements is the: A) calendar year. B) natural business years. C) fiscal year. D) accounting cycle. 2) The twelve-month period a business chooses for its accounting period is a(n): A) calendar year. B) accounting period. C) fiscal year. D) accounting.
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2.2   Learning Objective 2-2 1) An accounting device used to record increases and decreases in individual assets, liabilities, capital, revenue, expenses, and withdrawals is a(n): A) chart of accounts. B) account. C) trial balance. D) footing. 2) A compound entry is: A) a transaction involving more than one debit and/or credit. B) used to prepare the trial balance. C).
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71) Define and discuss a calendar year, accounting period, and fiscal year. 72) Provide an explanation for the following journal entries: a) Prepaid Rent debited, Cash credited b) Office supplies debited, Accounts Payable credited c) Cash debited, Capital credited d) Withdrawals debited, Cash credited e) Accounts Payable debited, Cash credited 73) Complete the following entries by using.
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1.3   Learning Objective 1-3 1) The net income or net loss is calculated on the: A) balance sheet. B) statement of owner's equity. C) income statement. D) none of these. 2) Owner's withdrawals: A) decrease assets. B) increase expenses. C) increase liabilities. D) decrease withdrawals. 3) Go Blue Retail Store collected $12,000 of its accounts receivable. The expanded accounting equation changes.
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1.2   Learning Objective 1-2 1) Which of the following will be recorded in the owner's equity column as an increase? A) An exchange of assets B) The purchase of an asset on credit C) An investment by the owner D) A withdrawal by the owner 2) The purchase of supplies for cash would affect which account.
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41) Bailey's received its electric bill for December on December 31 but did not pay nor record it in the general journal. This resulted in: A) understated assets. B) overstated net income. C) overstated liabilities. D) understated capital. 42) Online Service received its telephone bill for January, but is not going to pay the bill.
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2.3   Learning Objective 2-3 1) Which of the following is not a financial statement? A) Balance sheet B) Income statement C) Statement of owner's equity D) Trial balance 2) A list of all the accounts from the ledger with their ending balances is called a: A) normal balance. B) trial balance. C) chart of accounts. D) footing. 3) Which of the.
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11) The statement of owner's equity is the link between the income statement and balance sheet. 12) The income statement is the first financial statement completed. 13) Calculate the total Liabilities if the company has: Assets totaling $700 and Capital of $450. 14) Calculate the total Assets if the company has: Cash $200,.
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11) In an efficient market, an investor's search for "underpriced" stock will be unsuccessful unless the investor has knowledge of confidential information. 12) The cost of capital is defined as the: A) sum of liabilities and stockholders' equity accounts. B) weighted average of the returns demanded by the company's stockholders and lenders. C) rate.
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4.1   Learning Objective 4-1 1) A form used to organize and check data before preparing financial reports is known as a(n): A) trial balance. B) income statement. C) balance sheet. D) worksheet. 2) Bringing account balances up to date before preparing financial reports is called: A) posting. B) adjusting. C) journalizing. D) analyzing. 3) An adjustment for Prepaid Rent would indicate: A).
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21) Which accounts are affected when the company buys supplies on account? A) Assets and Capital B) Liabilities and Capital C) Assets and Liabilities D) None of the above are correct. 22) Which accounts are affected when the company provides services to a cash customer? A) Assets and Capital B) Liabilities and Capital C) Assets and Revenue D) None.
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31) Withdrawals are considered an expense of doing business. 32) When expenses are greater than revenue, net loss is the result. 33) The four parts of owner's equity include capital, liabilities, revenue, and expenses. 34) Cash withdrawals by the owner increase both equity and assets. 35) Cash investments by the owner increases both equity.
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13.5   Learning Objective 13-5 1) A firm's ability to pay current liabilities can be evaluated using working capital and the current ratio. 2) A company's debt ratio is computed as total assets minus total liabilities. 3) A ratio analysis, horizontal analysis, and vertical analysis are all financial analysis tools. 4) The acid-test ratio reflects.
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21) During the month of January, Katelyn invested $11,000 in starting her legal practice. The proper journal entry would be: A) Cash, debit $11,000; Katelyn's Capital, credit $11,000 B) Accounts Payable, debit $11,000; Cash, credit $11,000 C) Cash, debit $11,000; Revenue, credit $11,000 D) Katelyn's Capital, debit $11,000; Cash, credit $11,000 22) Which of the.
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51) Historical cost is the same as: A) residual value. B) original cost. C) accumulated depreciation. D) book value. 52) The accrual of an expense was not recorded. This would: A) overstate expenses and overstate liabilities. B) overstate expenses and understate liabilities. C) understate expenses and overstate liabilities. D) understate expenses and understate liabilities. 53) Depreciation of equipment was recorded.
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16) The proper sequence used in recording a business transaction is: A) analyze, post, journalize, record the account balance, and complete the reference column in the journal. B) analyze, journalize, post, record the account balance, and complete the reference column in the journal. C) analyze, journalize, post, complete the reference column in the.
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16) Which of the following groups of accounts have a normal debit balance? A) Revenue, liabilities, and capital B) Assets, capital, and withdrawals C) Liabilities, expenses, and assets D) Assets, expenses, and withdrawals 17) The ledger is: A) a group of accounts that records data from business transactions. B) a tool used to make sure that all.
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11) If 'Ol Fashioned Toys' revenues are greater than its expenses during the accounting period: A) assets will increase more than liabilities. B) liabilities will increase more than assets. C) the business will incur a loss. D) the business will earn a net income. 12) Carrie billed her legal clients $6,000 for legal work completed.
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4.2   Learning Objective 4-2 1) The order of the steps to prepare the worksheet are: A) prepare the trial balance, complete adjustments, prepare the adjusted trial balance, extend the respective totals to the Income Statement and Balance Sheet columns. B) complete the adjustments, prepare the adjusted trial balance, prepare the trial balance, extend.
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11) Generally Accepted Accounting Principles are the procedures and guidelines that must be followed during the accounting process. 12) The function of accounting includes analyzing, recording, classifying, summarizing, reporting, and interpreting financial information. 13) A sole proprietorship ends with the death of the owner. 14) Put the 7 main steps of the accounting.
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51) If Capital has been credited, it is likely that: A) services were provided to a cash customer. B) services were provided to a charge customer. C) the owner made an investment. D) All of these are possible 52) If Fees Earned has been credited, it is most likely that: A) services were provided. B) the owner.
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11) The general ledger: A) is the book of original entry. B) is the book of final entry. C) lists the transactions in chronological order. D) is before the general journal. 12) The process of initially recording business transactions in a journal is: A) sliding. B) posting. C) journalizing. D) transposing. 13) When recording a transaction in a journal, the.
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21) Eileen's Corner Shoppe purchases a new computer for cash. This causes: A) Cash and Capital to increase. B) Computer Equipment and Cash to increase. C) Computer Equipment to increase and Cash to decrease. D) Accounts Payable to increase and Capital to increase. 22) Bob purchased a new computer for the company on account. The.
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21) The estimated value of an item at the end of its useful life is: A) depreciation expense. B) residual value. C) accumulated depreciation. D) None of these answers are correct. 22) Accumulated Depreciation is found on which of the following financial statements? A) Balance sheet B) Income statement C) Statement of Owner's Equity D) All of these answers.
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11) Ratios that test liquidity include all of the following EXCEPT: A) acid-test ratio. B) current ratio. C) debt to total assets. D) inventory turnover. 12) To compute operating income (profit) percentage, divide: A) sales by cost of goods sold. B) gross profit by net sales. C) net income by stockholders' equity. D) operating income by net sales. 13) A.
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1.1   Learning Objective 1-1 1) The type of business organization that can continue indefinitely is known as a: A) sole proprietorship. B) partnership. C) corporation. D) None of the above 2) The purpose of the accounting process is to provide financial information about: A) sole proprietorships. B) small businesses. C) large corporations. D) All of these answers are correct. 3) Accounting.
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13.6   Learning Objective 13-6 1) Economic value added (EVA) can be computed as net income minus interest expense minus capital charge. 2) The cost of capital is a weighted average of the returns demanded by the company's stockholders and lenders. 3) Economic value added is a measure of change in corporation's total assets. 4).
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31) Samantha purchased a two-year insurance policy for $7,200. The adjusting entry for one month would include a: A) debit to Insurance Expense, $300. B) credit to Cash, $300. C) debit to Prepaid Insurance, $300. D) credit to Insurance expense, $300. 32) Sarah's Spices' accrued wages are $1,800. Which of the following is the required.
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