Question 1

The expanded accounting equation is

Accepted Answer

A)  Assets + Expenses + Revenues = Liabilities + Stockholders' Equity + Dividends 
B)  Assets + Expenses + Dividends = Liabilities + Stockholders' Equity + Revenues 
C)  Assets + Liabilities + Stockholders' Equity = Revenues + Expenses + Dividends 
D)  Assets + Dividends + Revenues = Liabilities + Stockholders' Equity + Expenses 
E)  Assets + Revenues + Stockholders' Equity = Liabilities + Expenses + Dividends 
A)  Assets + Expenses + Revenues = Liabilities + Stockholders' Equity + Dividends 
B)  Assets + Expenses + Dividends = Liabilities + Stockholders' Equity + Revenues 
C)  Assets + Liabilities + Stockholders' Equity = Revenues + Expenses + Dividends 
D)  Assets + Dividends + Revenues = Liabilities + Stockholders' Equity + Expenses 
E)  Assets + Revenues + Stockholders' Equity = Liabilities + Expenses + Dividends B

Question 2

John Dorval Trucking Co. purchased a new truck costing $45,750, paying $5,750 in cash and signing a one-year, 10% interest bearing note payable for the balance. The purchase of the new truck increases the Truck

Accepted Answer

A)  and Retained Earnings accounts by $45,750. 
B)  account by $49,750, increases the Note Payable account by $44,000, and decreases the Cash account by $5,750. 
C)  account by $45,750, increases the Note Payable account by $40,000, and decreases the Cash account by $5,750. 
D)  account by $40,000 and increases the Note Payable account by $40,000. 
E)  account by $49,750, increases the Note Payable account by $40,000, increases the Interest Expense account by $4,000, and decreases Cash by $9,750. 
A)  and Retained Earnings accounts by $45,750. 
B)  account by $49,750, increases the Note Payable account by $44,000, and decreases the Cash account by $5,750. 
C)  account by $45,750, increases the Note Payable account by $40,000, and decreases the Cash account by $5,750. 
D)  account by $40,000 and increases the Note Payable account by $40,000. 
E)  account by $49,750, increases the Note Payable account by $40,000, increases the Interest Expense account by $4,000, and decreases Cash by $9,750. C

Question 3

The origins of modern accounting date back to the early 1900s.

Accepted Answer

A) True 
 B)False  False

Question 4

Darwin Services purchased furniture costing $12,000, paid $5,000 in cash, and signed a 12% interest-bearing note payable for the balance. The effect of this transaction on the Cash and Furniture accounts is

Accepted Answer

The answer of Darwin Services purchased furniture costing $12,000, paid...

Question 5

During the closing process, the balances of revenue, expense, and dividend accounts are transferred to Income Summary.

Accepted Answer

A) True 
 B)False

Question 6

If the column totals of a trial balance are equal, debits are equal to credits but there still may be errors in the accounting records.

Accepted Answer

A) True 
 B)False

Question 7

Under the accrual basis of accounting, businesses generally record transactions only if those transactions involve cash.

Accepted Answer

A) True 
 B)False

Question 8

On December 31, earned but unpaid wages amounted to $33,500. What closing entry would be made for the unpaid wages?

Accepted Answer

A)  Debit Wages Expense for $33,500 and credit Wages Payable for $33,500. 
B)  Debit Wages Payable for $33,500 and credit Wages Expense for $33,500. 
C)  Debit Wages Expense for $33,500 and credit Income Summary for $33,500. 
D)  Debit Income Summary for $33,500 and credit Wages Payable for $33,500. 
E)  None of the above. 
A)  Debit Wages Expense for $33,500 and credit Wages Payable for $33,500. 
B)  Debit Wages Payable for $33,500 and credit Wages Expense for $33,500. 
C)  Debit Wages Expense for $33,500 and credit Income Summary for $33,500. 
D)  Debit Income Summary for $33,500 and credit Wages Payable for $33,500. 
E)  None of the above.

Question 9

During 2010, Elaine Corp. (a calendar-year company) declared $46,000 of dividends. The dividends have not been paid by December 31, 2010. At year-end, Elaine Corp. will

Accepted Answer

A)  debit Dividends and credit Income Summary to close the Dividends account. 
B)  debit Income Summary and credit Dividends to close the Dividends account. 
C)  debit Dividends and credit Cash to close the Dividends account. 
D)  debit Retained Earnings and credit Dividends to close the Dividends account. 
E)  not close the Dividends account until the dividends have been paid. 
A)  debit Dividends and credit Income Summary to close the Dividends account. 
B)  debit Income Summary and credit Dividends to close the Dividends account. 
C)  debit Dividends and credit Cash to close the Dividends account. 
D)  debit Retained Earnings and credit Dividends to close the Dividends account. 
E)  not close the Dividends account until the dividends have been paid.

Question 10

Which of the following statements is true?

Accepted Answer

A)  Purchasing office furniture on credit decreases total assets. 
B)  Financing purchases with long-term notes payable decreases total liabilities. 
C)  Declaring dividends decreases total stockholders' equity. 
D)  Purchasing inventory for cash causes total assets to increase. 
E)  Both c and d. 
A)  Purchasing office furniture on credit decreases total assets. 
B)  Financing purchases with long-term notes payable decreases total liabilities. 
C)  Declaring dividends decreases total stockholders' equity. 
D)  Purchasing inventory for cash causes total assets to increase. 
E)  Both c and d.

Question 11

Which of the following items is not a source document?

Accepted Answer

A)  Invoice 
B)  Journal entry 
C)  Legal contract 
D)  Purchase order 
E)  Sales slip 
A)  Invoice 
B)  Journal entry 
C)  Legal contract 
D)  Purchase order 
E)  Sales slip

Question 12

As used in accounting, a debit is an entry that

Accepted Answer

A)  causes an expense account to decrease. 
B)  causes a liability account to decrease. 
C)  arises because a company bought something that put the company in debt. 
D)  is made on the right-hand side of a T-account. 
E)  increases an asset or a revenue account . 
A)  causes an expense account to decrease. 
B)  causes a liability account to decrease. 
C)  arises because a company bought something that put the company in debt. 
D)  is made on the right-hand side of a T-account. 
E)  increases an asset or a revenue account .

Question 13

An amount received by a business for a service or product that will be provided or delivered in the future is

Accepted Answer

A)  accrued expense. 
B)  accrued revenue. 
C)  deferred expense. 
D)  deferred revenue. 
E)  operating income. 
A)  accrued expense. 
B)  accrued revenue. 
C)  deferred expense. 
D)  deferred revenue. 
E)  operating income.

Question 14

On February 1, 2010, Green Valley Lodge purchased ski equipment costing $75,000. The company paid $25,000 in cash and signed a 2-year note payable for the balance. What is the net change in Green Valley's total assets immediately after this transaction?

Accepted Answer

A)  $(25,000) 
B)  $0 
C)  +$25,000 
D)  +$50,000 
E)  +$75,000 
A)  $(25,000) 
B)  $0 
C)  +$25,000 
D)  +$50,000 
E)  +$75,000

Question 15

Which of the following equations is correct?

Accepted Answer

A)  Stockholders' Equity = Assets + Liabilities 
B)  Liabilities = Assets + Stockholders' Equity 
C)  Liabilities = Assets - Stockholders' Equity + Expenses 
D)  Stockholders' Equity = Assets - Liabilities 
E)  Assets + Revenues - Expenses = Stockholders' Equity 
A)  Stockholders' Equity = Assets + Liabilities 
B)  Liabilities = Assets + Stockholders' Equity 
C)  Liabilities = Assets - Stockholders' Equity + Expenses 
D)  Stockholders' Equity = Assets - Liabilities 
E)  Assets + Revenues - Expenses = Stockholders' Equity

Question 16

The declaration of a dividend causes Common Stock to decrease.

Accepted Answer

A) True 
 B)False

Question 17

General journals generally contain columns for dates, descriptions, posting references, debits, credits, and balances.

Accepted Answer

A) True 
 B)False

Question 18

At the beginning of 2010, Trey Corp. had $341,000 in Retained Earnings. During 2010, Trey Corp. had $450,000 of revenue and $260,000 of expenses. Dividends declared and paid in 2010 were $25,000. Which of the following statements is(are) true?

Accepted Answer

A)  Trey Corp.'s net income for 2010 was $165,000. 
B)  Trey Corp.'s net income for 2010 was $190,000. 
C)  Trey Corp.'s Retained Earnings on the December 31, 2010, balance sheet is $506,000. 
D)  Both a and c are true. 
E)  Both b and c are true. 
A)  Trey Corp.'s net income for 2010 was $165,000. 
B)  Trey Corp.'s net income for 2010 was $190,000. 
C)  Trey Corp.'s Retained Earnings on the December 31, 2010, balance sheet is $506,000. 
D)  Both a and c are true. 
E)  Both b and c are true.

Question 19

Which of the following statements is true?

Accepted Answer

A)  Retained Earnings represents a corporation's net income for the current period minus all dividends distributed to the firm's stockholders for the current period. 
B)  The dollar amounts associated with revenue, expense, and dividend transactions are stored in permanent accounts during the accounting period. 
C)  The Income Summary account is used to channel the balances of temporary accounts into the Retained Earnings account through closing entries. 
D)  Revenue and expense account balances do not change once closing entries have been posted. 
E)  Only temporary accounts are included in the post-closing trial balance. 
A)  Retained Earnings represents a corporation's net income for the current period minus all dividends distributed to the firm's stockholders for the current period. 
B)  The dollar amounts associated with revenue, expense, and dividend transactions are stored in permanent accounts during the accounting period. 
C)  The Income Summary account is used to channel the balances of temporary accounts into the Retained Earnings account through closing entries. 
D)  Revenue and expense account balances do not change once closing entries have been posted. 
E)  Only temporary accounts are included in the post-closing trial balance.

Question 20

A contra-liability account has a debit balance and, thus, will be shown with the assets on the balance sheet.

Accepted Answer

A) True 
 B)False

The expanded accounting equation is

John Dorval Trucking Co. purchased a new truck costing $45,750, paying $5,750 in cash and signing a one-year, 10% interest bearing note payable for the balance. The purchase of the new truck increases the Truck

The origins of modern accounting date back to the early 1900s.

Darwin Services purchased furniture costing $12,000, paid $5,000 in cash, and signed a 12% interest-bearing note payable for the balance. The effect of this transaction on the Cash and Furniture accounts is

During the closing process, the balances of revenue, expense, and dividend accounts are transferred to Income Summary.

If the column totals of a trial balance are equal, debits are equal to credits but there still may be errors in the accounting records.

Under the accrual basis of accounting, businesses generally record transactions only if those transactions involve cash.

On December 31, earned but unpaid wages amounted to $33,500. What closing entry would be made for the unpaid wages?

During 2010, Elaine Corp. (a calendar-year company) declared $46,000 of dividends. The dividends have not been paid by December 31, 2010. At year-end, Elaine Corp. will

Which of the following statements is true?

Which of the following items is not a source document?

As used in accounting, a debit is an entry that

An amount received by a business for a service or product that will be provided or delivered in the future is

On February 1, 2010, Green Valley Lodge purchased ski equipment costing $75,000. The company paid $25,000 in cash and signed a 2-year note payable for the balance. What is the net change in Green Valley's total assets immediately after this transaction?

Which of the following equations is correct?

The declaration of a dividend causes Common Stock to decrease.

General journals generally contain columns for dates, descriptions, posting references, debits, credits, and balances.

At the beginning of 2010, Trey Corp. had $341,000 in Retained Earnings. During 2010, Trey Corp. had $450,000 of revenue and $260,000 of expenses. Dividends declared and paid in 2010 were $25,000. Which of the following statements is(are) true?

Which of the following statements is true?

A contra-liability account has a debit balance and, thus, will be shown with the assets on the balance sheet.

An Introduction to the Role of Accounting in the Business World

Concepts and Elements Underlying Accounting

Cash, Short-Term Investments and Accounts Receivable

Inventory

Long-Term Assets: Property, Plant Equipment and Intangibles

Liabilities

Stockholders Equity

The Corporate Income Statement and Financial Analysis

Statement of Cash Flows

Managerial Accounting

Cost-Volume-Profit Analysis

The Master Budget

Activity-Based Management and Performance Measurementreward

Filters

Exam 3: The Mechanics of Double-Entry Bookkeeping

The expanded accounting equation is

John Dorval Trucking Co. purchased a new truck costing $45,750, paying $5,750 in cash and signing a one-year, 10% interest bearing note payable for the balance. The purchase of the new truck increases the Truck

The origins of modern accounting date back to the early 1900s.

Darwin Services purchased furniture costing $12,000, paid $5,000 in cash, and signed a 12% interest-bearing note payable for the balance. The effect of this transaction on the Cash and Furniture accounts is

During the closing process, the balances of revenue, expense, and dividend accounts are transferred to Income Summary.

If the column totals of a trial balance are equal, debits are equal to credits but there still may be errors in the accounting records.

Under the accrual basis of accounting, businesses generally record transactions only if those transactions involve cash.

On December 31, earned but unpaid wages amounted to $33,500. What closing entry would be made for the unpaid wages?

During 2010, Elaine Corp. (a calendar-year company) declared $46,000 of dividends. The dividends have not been paid by December 31, 2010. At year-end, Elaine Corp. will

Which of the following statements is true?

Which of the following items is not a source document?

As used in accounting, a debit is an entry that

An amount received by a business for a service or product that will be provided or delivered in the future is

On February 1, 2010, Green Valley Lodge purchased ski equipment costing $75,000. The company paid $25,000 in cash and signed a 2-year note payable for the balance. What is the net change in Green Valley's total assets immediately after this transaction?

Which of the following equations is correct?

The declaration of a dividend causes Common Stock to decrease.

General journals generally contain columns for dates, descriptions, posting references, debits, credits, and balances.

At the beginning of 2010, Trey Corp. had $341,000 in Retained Earnings. During 2010, Trey Corp. had $450,000 of revenue and $260,000 of expenses. Dividends declared and paid in 2010 were $25,000. Which of the following statements is(are) true?

Which of the following statements is true?

A contra-liability account has a debit balance and, thus, will be shown with the assets on the balance sheet.

An Introduction to the Role of Accounting in the Business World

Concepts and Elements Underlying Accounting

Cash, Short-Term Investments and Accounts Receivable

Inventory

Long-Term Assets: Property, Plant Equipment and Intangibles

Liabilities

Stockholders Equity

The Corporate Income Statement and Financial Analysis

Statement of Cash Flows

Managerial Accounting

Cost-Volume-Profit Analysis

The Master Budget

Activity-Based Management and Performance Measurementreward

Filters