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Study Resources (Accounting)

19) Which of the following amounts appears on both the income statement and the balance sheet? A) Total assets B) Net income C) Ending retained earnings D) None of the above amounts appear on both 20) Which of the following financial statements shows the changes in retained earnings during a period of time? A) Income statement B).
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Learning Objective 1-10 1) The relative proportion of economic resources and obligations would be shown by the balance sheet. 2) The income statement shows whether or not a company can generate enough cash to pay its liabilities. 3) The balance sheet shows whether or not a company is earning profits. 4) You can.
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34) Which of the following journal entries would be recorded if a business renders service and receives cash of $400 from the customer? A) Service revenue 400      Cash 400 B) Service revenue 400      Accounts payable 400 C) Cash 400      Service revenue 400 D) Service revenue 400      Accounts receivable 400 35) Which of the following journal entries would be recorded if a business makes a cash payment to.
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11) Martin Supply Co. paid $350 cash to a materials supplier that it owed from the previous month.  What is the effect of the cash payment on the accounts of the company? A) Materials account increases; Retained earnings account decreases. B) Cash account decreases; Accounts payable increases. C) Accounts payable increases; Retained earnings.
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34) The accountant for Noble Jewelry Repair Corporation forgot to make an adjusting entry for Depreciation expense for the current year. What is the effect of this error on total assets? A) Total assets are understated. B) Total assets are not affected. C) Total assets are overstated. D) There is not enough information presented.
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Learning Objective 1-5 1) In an LLC, the business-not the owners-are responsible for the corporation's debts. 2) Corporations are subject to stricter regulation than other forms of businesses, so it is more difficult for corporations to raise large amounts of investment capital. 3) The most an investor in a corporation can lose-in.
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14) The following is the ending month's balances for Toys Galore. Accounts payable $6,790 Revenues 8,680 Cash 4,500 Expenses 1,050 Furniture 8,370 Accounts receivable 7,710 Common stock 930 Notes payable 5,230 What is the total amount of debits for the trial balance? A) $21,630 B) $16,400 C) $20,580 D) $30,310 15) The following is the ending month's balances for Toys Galore. Accounts payable $6,790 Revenues 8,680 Cash 4,500 Expenses 1,050 Furniture 8,370 Accounts receivable 7,710 Common stock 930 Notes payable 5,230 What is the net income for Toys Galore.
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10) Below is the adjusted trial balance for Parsons Repair Service.  Please prepare the balance sheet at December 31, 2012. Parsons Repair Service Adjusted Trial Balance December 31, 2012 Accounts Debit Credit Cash $1,600 Accounts receivable 2,400 Prepaid rent 800 Supplies 200 Building 14,000 Accumulated depreciation $2,000 Accounts payable 4,200 Salary payable 1,000 Unearned revenue 800 Common stock 1,000 Retained earnings 5,000 Dividends 1,000 Service revenue 50,000 Salary expense 21,000 Rent expense 14,000 Depreciation expense 8,500 Supplies expense 500 Total $64,000 $64,000 Learning Objective 3-7 1) Pattie's Event Planning Service records prepaid expenses as.
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Learning Objective 3-1 1) Accrual accounting records transactions ONLY when cash is received or paid. 2) The owner of Recipes.org purchases $2,000 of supplies on account. Under the accrual basis of accounting, no entry is made until the $2,000 is paid. 3) In cash-basis accounting, revenue is recognized when cash is received.
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8) Below is the adjusted trial balance for Parsons Repair Service.  Please prepare the income statement for the year ended December 31, 2012. Parsons Repair Service Adjusted Trial Balance December 31, 2012 Accounts Debit Credit Cash $1,600 Accounts receivable 2,400 Prepaid rent 800 Supplies 200 Building 14,000 Accumulated depreciation $2,000 Accounts payable 4,200 Salary payable 1,000 Unearned revenue 800 Common stock 1,000 Retained earnings 5,000 Dividends 1,000 Service revenue 50,000 Salary expense 21,000 Rent expense 14,000 Depreciation expense 8,500 Supplies expense 500 Total $64,000 $64,000 9) Below is the adjusted trial balance for Parsons.
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19) For Retained earnings, the category of account, and its normal balance are: A) Stockholders' equity and a credit balance. B) Assets and a debit balance. C) Liabilities and a credit balance. D) Assets and a credit balance. 20) For Dividends, the category of account and its normal balance are: A) Stockholders' equity and a credit.
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64) A business renders services to its customer and collects $900 cash.  Please provide the journal entry (debits first, credits second.) 65) A business renders services to its customer for $350 on account.  Please provide the journal entry (debits first, credits second.) 66) A business pays salary expense of $4,000 in cash. .
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5) In accounting, the matching principle means to match which of the following? A) Revenues to liabilities B) Expenses to assets C) Expenses to revenues D) Expenses to liabilities 6) The matching principle means which of the following? A) Revenues are subtracted from expenses. B) Expenses are subtracted from revenues. C) Assets are subtracted from liabilities. D) Liabilities are.
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24) Adjusting entries NEVER involve: A) expenses. B) cash. C) liabilities. D) revenues. 25) If an adjusting entry includes a debit to Rent expense, that would indicate that the payment of rent had been previously recorded as a(n) ________ entry. A) prepaid expense B) depreciation C) accrued expense D) accrued revenue 26) An entry that reflects the using up of.
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9) Accounting standards are formulated by the: A) SEC. B) AICPA. C) FASB. D) IRS. 10) The Sarbanes-Oxley Act ("SOX") made it a criminal offense to: A) steal shareholders' money. B) default on loans from creditors. C) declare bankruptcy. D) falsify financial information. 11) Which of the following organizations requires publicly owned companies to be audited by independent accountants (CPAs)? A).
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54) The following entries were made by the accountant of Patel Pastries, Inc. during its first month of operation. 1.  James Patel, the sole shareholder, deposited $3,000 in the company's new checking account in exchange for stock. 2.  Patel Pastries, Inc. paid the first month's rent of $400 in cash. 3.  Patel Pastries,.
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11) Which of the following accounts does cash-basis accounting ignore? A) Payables B) Revenue C) Cash D) Expenses 12) Which of the following entries would be recorded ONLY if a company is using the accrual method of accounting? A) Cash 1,000      Accounts receivable 1,000 B) Salary expense 1,000      Cash 1,000 C) Cash 1,000      Service revenue 1,000 D) Supplies 1,000      Cash 1,000 13) Which of the following entries would be recorded if a.
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23) A business makes a cash payment for advertising expense. Which account is debited? A) Cash B) Service revenue C) Accounts receivable D) Advertising expense 24) A business makes a cash payment for advertising expense. Which account is credited? A) Cash B) Service revenue C) Accounts receivable D) Advertising expense 25) A business pays out cash dividends to shareholders. Which.
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21) ABC Delivery Co. had the following transactions in June:  Earned $4,000 cash for services rendered;  collected $2,500 from a customer "on account;"  paid out $200 cash for plumbing services;  received $3,500 of supplies and promised to pay one month later;  paid out $1,000 in cash dividends to shareholders.  What.
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8) Which of the following accounts increases with a debit? A) Cash B) Interest payable C) Accounts payable D) Common Stock 9) Which of the following accounts decreases with a debit? A) Notes payable B) Prepaid insurance C) Cash D) Land Learning Objective 2-3 1) An account that normally has a debit balance may occasionally have a credit balance. 2) Which.
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19) The following transactions have been journalized and posted to the proper accounts. Prepare a trial balance in good form. a.Edward Wilson invested $8,000 cash in his new landscaping corporation in exchange for stock. b.The corporation paid the first month's rent with $300 cash. c.The corporation purchased equipment by paying $2,000 cash ,.
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3) All of a company's accounts and their balances appear on the: A) statement of retained earnings. B) balance sheet. C) adjusted trial balance. D) income statement. 4) The accountant for Wilson Consulting Company failed to make an adjusting entry to record $3,000 of unearned service revenue that has now been earned. Which of the.
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13) A business buys $500 of supplies on account. Which account is debited? A) Cash B) Accounts payable C) Supplies D) Service revenue 14) A business buys $500 of supplies on account. Which account is credited? A) Cash B) Accounts payable C) Supplies D) Service revenue 15) A business makes a cash payment to a supplier "on account" (for supplies.
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6) Prepare a statement of retained earnings for the year ended December 31, 2012 from the adjusted trial balance below. Deavours Photography Company Adjusted Trial Balance December 31, 2012 Accounts Debit Credit Cash $2,000 Prepaid insurance 2,000 Office supplies 600 Office equipment 16,000 Accumulated depreciation $3,000 Accounts payable 5,000 Salaries payable 900 Unearned service revenue 2,500 Common stock 5,000 Retained earnings 2,450 Dividends paid 5,600 Service revenue 15,350 Salaries expense 4,600 Depreciation expense 1,000 Supplies expense 400 Insurance expense 2,000 Totals $34,200 $34,200 7) Prepare a balance sheet from the adjusted trial.
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29) Which of the following is the correct order of steps to journalize an entry? A) Identify each account affected, determine increase or decrease in each account, record the transaction. B) Identify each account affected, record the transaction, determine increase or decrease in each account. C) Record the transaction, identify each account affected,.
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11) The owner(s) of a business will most likely face "double taxation" if their business is organized as a(n): A) corporation. B) LLC. C) partnership. D) proprietorship. 12) The ability to raise large amounts of capital is a key characteristic of a: A) partnership. B) not-for-profit. C) corporation. D) proprietorship. 13) The separation between the owners and the managers of.
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9) For liabilities and revenues, a debit increases the account. 10) The balance of an account is the: A) amount remaining in an account. B) account number as shown in the chart of Accounts. C) sum of the debits only. D) sum of the credits only. 11) For Accounts receivable, the category of account and its.
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3) A business purchases equipment for cash in the amount of $8,000. Which account is debited? A) Cash B) Accounts payable C) Utilities expense D) Equipment 4) A business purchases equipment for cash in the amount of $8,000. Which account is credited? A) Cash B) Accounts payable C) Utilities expense D) Equipment 5) A business makes a cash payment of.
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5) Assets are $150,000 and total liabilities are $90,000. Total stockholders' equity will be: A) $180,000. B) $300,000. C) $240,000. D) $60,000. 6) Assets are $270,000 and stockholders' equity is $90,000. Liabilities will be: A) $60,000. B) $360,000. C) $270,000. D) $180,000. 7) A business performs services for its customers. Payment is expected to be received next month. How does.
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25) Sharon Samson starts a plumbing service, Reliable Waterworks, Inc. Selected transactions are described as follows: A) Sharon deposits $7,000 into a new checking account for the company, receiving stock in exchange. B) Reliable pays $4,000 cash for equipment to be used for plumbing repairs. C) Reliable borrows $15,000 from a local bank.
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15) Employees of Robert Rogers, CPA, worked during the last two weeks of December. They received their paychecks on January 2. The matching principle would require that which of the following accounts appear on the income statement for the year ended December 31? A) Salary expense B) Prepaid expense C) Salaries payable D) Unearned.
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13) Pattie's Event Planning Service has just prepared the unadjusted trial balance, which shows the following balances: Salary expense: Debit $6,000 Service revenues: Credit $20,000 Interest expense: 0 Pattie's salaries are $2,000 per week and are paid out at the end of the day on Fridays.  The end of the month falls on a.
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8) Which of the following concepts (principles) would require that an item be recorded at the amount actually paid rather than at estimated market value? A) Going-concern concept B) Entity concept C) Cost principle D) Stable monetary unit concept 9) Which of the following concepts (principles) require an assumption that the entity will remain in.
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64) Hank's Tax Planning Service started business in January, 2012.  He rented an office for $900 a month starting January 1.  He prepaid the rentals through June 30.   He makes accrual adjustments monthly.   As of April 30, Hank's ledger shows a balance in Prepaid rent of how much? A) $1,800 B) $900 C).
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9) The balance sheet, or statement of financial position, is like a snapshot of the entity. Which of the following items are included on the balance sheet? A) Revenues B) Expenses C) Assets D) Dividends paid 10) Each financial statement includes a heading giving three pieces of data. Which of the following items is NOT.
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15) The business collects a $5,000 account receivable from its customer. How is the accounting equation affected? A) Assets increase $5,000; liabilities decrease $5,000. B) One asset increases by $5,000; another asset decreases $5,000. C) Assets increase $5,000; liabilities increase $5,000. D) Assets increase $5,000; stockholders' equity increases $5,000. 16) Total liabilities increase by $7,000..
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11) Which of the following accounts is a stockholders' equity account? A) Accrued liability B) Accounts payable C) Prepaid expense D) Retained earnings 12) Prepaid expenses are recorded as: A) assets. B) liabilities. C) debits and credits. D) retained earnings. 13) In a typical chart of accounts, liabilities appear before assets. 14) In a typical chart of accounts, what information is.
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24) Alice Li incorporated Li Design Company and invested $5,000 of her own money in exchange for stock on Dec. 1, 2012.   On Dec. 12, she rendered services to three clients "on account" with total revenues earned of $4,500.  She then incurred advertising expense on four different websites and promised.
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