Question 1

Accounts Payable

Accepted Answer

A)  has a normal credit balance 
B)  is increased by a debit 
C)  is an asset 
D)  is increased when a company receives cash from customers. 
A)  has a normal credit balance 
B)  is increased by a debit 
C)  is an asset 
D)  is increased when a company receives cash from customers.

Question 2

A company purchased land costing $27,000 by making a 25 percent cash down payment and signing a 90-day note for the balance. The entry to record this transaction would

Accepted Answer

A)  Increase total assets. 
B)  Decrease total liabilities. 
C)  Decrease contributed capital. 
D)  Increase retained earnings. 
A)  Increase total assets. 
B)  Decrease total liabilities. 
C)  Decrease contributed capital. 
D)  Increase retained earnings.

Question 3

Which of the following is NOT true about liabilities?

Accepted Answer

A)  Liabilities are amounts owed by a business. 
B)  Liability accounts have a normal credit balance. 
C)  Financing activities will affect the amount of liabilities. 
D)  Examples of liabilities include notes payable, contributed capital and income tax payable. Contributed capital is part of stockholders' equity and is not a liability. 
A)  Liabilities are amounts owed by a business. 
B)  Liability accounts have a normal credit balance. 
C)  Financing activities will affect the amount of liabilities. 
D)  Examples of liabilities include notes payable, contributed capital and income tax payable. Contributed capital is part of stockholders' equity and is not a liability.

Question 4

A long-term liability is one that the company:

Accepted Answer

A)  has owed for over one year. 
B)  has owed for over five years. 
C)  will not pay off for over one year. 
D)  will not pay off for over five years. 
A)  has owed for over one year. 
B)  has owed for over five years. 
C)  will not pay off for over one year. 
D)  will not pay off for over five years.

Question 5

Park & Company was recently formed with a $5,000 investment in the company by stockholders. The company then borrowed $2,000 from a local bank, purchased $1,000 of supplies on account, and also purchased $5,000 of equipment by paying $2,000 in cash and signing a promissory note for the balance. Based on these
Transactions, the company's total assets are:

Accepted Answer

A)  $7,000. 
B)  $9,000. 
C)  $10,000. 
D)  $11,000. 
A)  $7,000. 
B)  $9,000. 
C)  $10,000. 
D)  $11,000.

Question 6

The Buddy Burger Corporation owes $1.5 million to the Texas Wholesale Meat Company from whom Buddy Burger buys its burger meat. Which account would Buddy Burger use to report the amount owed?

Accepted Answer

A)  Cash. 
B)  Accounts Payable. 
C)  Supplies. 
D)  Accounts Receivable. 
A)  Cash. 
B)  Accounts Payable. 
C)  Supplies. 
D)  Accounts Receivable.

Question 7

The best interpretation of the word "credit" is the

Accepted Answer

A)  offset side of an account. 
B)  increase side of an account. 
C)  right side of an account. 
D)  decrease side of an account. 
A)  offset side of an account. 
B)  increase side of an account. 
C)  right side of an account. 
D)  decrease side of an account.

Question 8

Which of the following statements is FALSE about the current ratio?

Accepted Answer

A)  Instead of using the dollar amounts, the current ratio makes it easier to compare several companies. 
B)  The current ratio is used to evaluate a company's ability to pay current obligations. 
C)  Having more current assets than current liabilities will yield a current ratio less than 1. 
D)  A high current ratio suggests good liquidity. 
A)  Instead of using the dollar amounts, the current ratio makes it easier to compare several companies. 
B)  The current ratio is used to evaluate a company's ability to pay current obligations. 
C)  Having more current assets than current liabilities will yield a current ratio less than 1. 
D)  A high current ratio suggests good liquidity.

Question 9

Which account would be decreased by a credit?

Accepted Answer

A)  Cash 
B)  Accounts payable 
C)  Contributed capital 
D)  Retained earnings 
A)  Cash 
B)  Accounts payable 
C)  Contributed capital 
D)  Retained earnings

Question 10

Which of the following would be classified as a long-term liability on the balance sheet at December 31, 2010?

Accepted Answer

A)  Accounts payable, 30-day account. 
B)  Notes payable, due November, 2011. 
C)  Notes receivable, matures April, 2012. 
D)  Mortgage payable, due January, 2013. 
A)  Accounts payable, 30-day account. 
B)  Notes payable, due November, 2011. 
C)  Notes receivable, matures April, 2012. 
D)  Mortgage payable, due January, 2013.

Question 11

Cash had a beginning balance of $68,900. During the month, Cash was credited for $16,000 and debited for $18,300. At the end of the month, the balance is:

Accepted Answer

A)  $2,300. 
B)  $71,200. 
C)  $66,700. 
D)  $(2,300). 
A)  $2,300. 
B)  $71,200. 
C)  $66,700. 
D)  $(2,300).

Question 12

The acquisition of equipment in an exchange for a company's stock would increase the current ratio of the company.
the accounts in this transaction is classified as current.

Accepted Answer

A) True 
 B)False

Question 13

Which of the following would cause a trial balance to be out of balance?

Accepted Answer

A)  A transaction was recorded twice. 
B)  A transaction was not recorded. 
C)  A transaction was posted to the wrong accounts. 
D)  Only the credit of a transaction was recorded. 
A)  A transaction was recorded twice. 
B)  A transaction was not recorded. 
C)  A transaction was posted to the wrong accounts. 
D)  Only the credit of a transaction was recorded.

Question 14

What is the total of the CREDIT balance accounts?

Accepted Answer

A)  $111,040 
B)  $104,090 
C)  $113,540 
D)  $108,590 
A)  $111,040 
B)  $104,090 
C)  $113,540 
D)  $108,590

Question 15

How many of the following statements regarding debits and credits are true?
A decrease in assets will result in a credit to an asset account.
Across all accounts, the total value of all debits must equal the total value of all credits.
The total value of all debits to a particular account must equal the total value of all credits to that account.

Accepted Answer

A)  None 
B)  One 
C)  Two 
D)  Three 
A)  None 
B)  One 
C)  Two 
D)  Three

Question 16

In 1999, the Denim Company bought land that cost $15,000. In 2010, a similar piece of land was bought for $28,000 and the company's existing land was estimated to be worth $18,000. On the balance sheet at the end of
2010, the land that was purchased in 1999 would be reported at:

Accepted Answer

A)  $15,000. 
B)  $28,000. 
C)  $18,000. 
D)  the average of the three prices. 
A)  $15,000. 
B)  $28,000. 
C)  $18,000. 
D)  the average of the three prices.

Question 17

The normal balance of any account is the

Accepted Answer

A)  left side. 
B)  right side. 
C)  side which increases that account. 
D)  side which decreases that account. 
A)  left side. 
B)  right side. 
C)  side which increases that account. 
D)  side which decreases that account.

Question 18

The final balance of the Cash account would be:

Accepted Answer

A)  $219,300. 
B)  $113,300. 
C)  $28,500. 
D)  $134,500. 
A)  $219,300. 
B)  $113,300. 
C)  $28,500. 
D)  $134,500.

Question 19

What is the amount of the total assets to be reported on the balance sheet?

Accepted Answer

A)  $150,000 
B)  $160,000 
C)  $90,000 
D)  $80,000 
A)  $150,000 
B)  $160,000 
C)  $90,000 
D)  $80,000

Question 20

Your company's president donates a large amount of her own money to charity and receives significant publicity that includes the company's name. How would the benefits of this publicity appear on the balance sheet?

Accepted Answer

A)  It would appear as a current asset. 
B)  It would appear as a liability. 
C)  It would appear as a long-term asset. 
D)  It would not appear on the balance sheet. 
A)  It would appear as a current asset. 
B)  It would appear as a liability. 
C)  It would appear as a long-term asset. 
D)  It would not appear on the balance sheet.

Accounts Payable

A company purchased land costing $27,000 by making a 25 percent cash down payment and signing a 90-day note for the balance. The entry to record this transaction would

Which of the following is NOT true about liabilities?

A long-term liability is one that the company:

The Buddy Burger Corporation owes $1.5 million to the Texas Wholesale Meat Company from whom Buddy Burger buys its burger meat. Which account would Buddy Burger use to report the amount owed?

The best interpretation of the word "credit" is the

Which of the following statements is FALSE about the current ratio?

Which account would be decreased by a credit?

Which of the following would be classified as a long-term liability on the balance sheet at December 31, 2010?

Cash had a beginning balance of $68,900. During the month, Cash was credited for $16,000 and debited for $18,300. At the end of the month, the balance is:

The acquisition of equipment in an exchange for a company's stock would increase the current ratio of the company. the accounts in this transaction is classified as current.

Which of the following would cause a trial balance to be out of balance?

What is the total of the CREDIT balance accounts?

In 1999, the Denim Company bought land that cost $15,000. In 2010, a similar piece of land was bought for $28,000 and the company's existing land was estimated to be worth $18,000. On the balance sheet at the end of 2010, the land that was purchased in 1999 would be reported at:

The normal balance of any account is the

The final balance of the Cash account would be:

What is the amount of the total assets to be reported on the balance sheet?

Your company's president donates a large amount of her own money to charity and receives significant publicity that includes the company's name. How would the benefits of this publicity appear on the balance sheet?

Business Decisions and Financial Accounting

Reporting Operating Results on the Income Statement

Adjustments, Financial Statements, and Financial Results

Financial Reporting and Analysis

Internal Control and Financial Reporting for Cash and Merchandise Sales

Reporting and Interpreting Inventories and Cost of Goods Sold

Reporting and Interpreting Receivables, Bad Debt Expense, and Interest Revenue

Reporting and Interpreting Long-Lived Tangible and Intangible Assets

Reporting and Interpreting Liabilities

Reporting and Interpreting Stockholders Equity

Reporting and Interpreting the Statement of Cash Flows

Measuring and Evaluating Financial Performance

Filters

Exam 2: Reporting Investing and Financing Results on the Balance Sheet

Accounts Payable

A company purchased land costing $27,000 by making a 25 percent cash down payment and signing a 90-day note for the balance. The entry to record this transaction would

Which of the following is NOT true about liabilities?

A long-term liability is one that the company:

The Buddy Burger Corporation owes $1.5 million to the Texas Wholesale Meat Company from whom Buddy Burger buys its burger meat. Which account would Buddy Burger use to report the amount owed?

The best interpretation of the word "credit" is the

Which of the following statements is FALSE about the current ratio?

Which account would be decreased by a credit?

Which of the following would be classified as a long-term liability on the balance sheet at December 31, 2010?

Cash had a beginning balance of $68,900. During the month, Cash was credited for $16,000 and debited for $18,300. At the end of the month, the balance is:

The acquisition of equipment in an exchange for a company's stock would increase the current ratio of the company. the accounts in this transaction is classified as current.

Which of the following would cause a trial balance to be out of balance?

What is the total of the CREDIT balance accounts?

In 1999, the Denim Company bought land that cost $15,000. In 2010, a similar piece of land was bought for $28,000 and the company's existing land was estimated to be worth $18,000. On the balance sheet at the end of 2010, the land that was purchased in 1999 would be reported at:

The normal balance of any account is the

The final balance of the Cash account would be:

What is the amount of the total assets to be reported on the balance sheet?

Your company's president donates a large amount of her own money to charity and receives significant publicity that includes the company's name. How would the benefits of this publicity appear on the balance sheet?

Business Decisions and Financial Accounting

Reporting Operating Results on the Income Statement

Adjustments, Financial Statements, and Financial Results

Financial Reporting and Analysis

Internal Control and Financial Reporting for Cash and Merchandise Sales

Reporting and Interpreting Inventories and Cost of Goods Sold

Reporting and Interpreting Receivables, Bad Debt Expense, and Interest Revenue

Reporting and Interpreting Long-Lived Tangible and Intangible Assets

Reporting and Interpreting Liabilities

Reporting and Interpreting Stockholders Equity

Reporting and Interpreting the Statement of Cash Flows

Measuring and Evaluating Financial Performance

Filters