Question 1

A net income of $10,000 means that the business received $10,000 more in cash from its customers than it spent to run the business.

Accepted Answer

A) True 
 B)False

Question 2

Which of the following transactions decreases both assets and stockholders' equity?

Accepted Answer

A)  Declaration and payment of a dividend 
B)  Advance payment made for insurance 
C)  Receipt of a phone bill, to be paid at a later time 
D)  Payment of a liability 
A)  Declaration and payment of a dividend 
B)  Advance payment made for insurance 
C)  Receipt of a phone bill, to be paid at a later time 
D)  Payment of a liability

Question 3

If a debit to Supplies were posted as a credit,and a credit of the same amount to Cash were posted as a debit,what would be the effect,if any,on the two accounts and on the trial balance column totals?

Accepted Answer

The Cash account would be over

Question 4

For which of the following accounts would a related Accumulated Depreciation account be recorded?

Accepted Answer

A)  Office Equipment 
B)  Land 
C)  Office Supplies 
D)  Prepaid Rent 
A)  Office Equipment 
B)  Land 
C)  Office Supplies 
D)  Prepaid Rent

Question 5

The purpose of the ledger is to

Accepted Answer

A)  keep a record of documentation to support each transaction. 
B)  make sure that all assets, liabilities, etc., have credit balances at all times. 
C)  record chronologically the day's transactions. 
D)  maintain a separate account for each asset, liability, etc. 
A)  keep a record of documentation to support each transaction. 
B)  make sure that all assets, liabilities, etc., have credit balances at all times. 
C)  record chronologically the day's transactions. 
D)  maintain a separate account for each asset, liability, etc.

Question 6

One can obtain a clear picture of a company's liquidity by referring to its statement of cash flows.

Accepted Answer

A) True 
 B)False

Question 7

Which of the following errors will not cause the debit and credit columns of the trial balance to be unequal?

Accepted Answer

A)  A debit entry was recorded in the wrong account. 
B)  A debit was entered in an account as a credit. 
C)  The account balance was carried to the wrong column of the trial balance. 
D)  The balance of an account was incorrectly computed. 
A)  A debit entry was recorded in the wrong account. 
B)  A debit was entered in an account as a credit. 
C)  The account balance was carried to the wrong column of the trial balance. 
D)  The balance of an account was incorrectly computed.

Question 8

Journal entries are typically posted only at the end of the year.

Accepted Answer

A) True 
 B)False

Question 9

A credit to an asset account means that asset account has been increased.

Accepted Answer

A) True 
 B)False

Question 10

Which of the following events does not result in the recording of an expense?

Accepted Answer

A)  Payment of a dividend 
B)  Purchase of gasoline for fill-up of a company car 
C)  Receipt of a bill from the telephone company 
D)  Payment of wages 
A)  Payment of a dividend 
B)  Purchase of gasoline for fill-up of a company car 
C)  Receipt of a bill from the telephone company 
D)  Payment of wages

Question 11

Which of the following accounts is decreased with a credit?

Accepted Answer

A)  Advertising Fees Earned 
B)  Insurance Expense 
C)  Common Stock 
D)  Unearned Revenue 
A)  Advertising Fees Earned 
B)  Insurance Expense 
C)  Common Stock 
D)  Unearned Revenue

Question 12

Given the following ledger account and postings,complete the Balance column.Assume no previous postings in the account.

Accepted Answer

The answer of Given the following ledger account and postings,complete...

Question 13

Using the alphabetical list of account balances presented below,all of which are normal,prepare a trial balance for T.and C.Corporation at June 30,2010,in proper order.Compute the balance of the Cash account.
 $\begin{array}{l}
\text { Accounts Payable } &\$140\
\text { Accounts Receivable } &280\
\text { Cash } &?\
\text { Common Stock }&200\
\text { Equipment } & 400 \
\text { Office Expense } & 180 \
\text { Retained Earnings } & 240 \
\text { Seqrice Revrenue } & 300
\end{array}$

Accepted Answer

None

Question 14

It is sometimes correct for a compound entry's debit totals and credit totals to be unequal.

Accepted Answer

A) True 
 B)False

Question 15

Fair Value is the exchange price associated with a business transaction at the time the transaction is recognized.

Accepted Answer

A) True 
 B)False

Question 16

Which of the following accounts is increased with a credit?

Accepted Answer

A)  Supplies 
B)  Fees Earned 
C)  Supplies Expense 
D)  Dividends 
A)  Supplies 
B)  Fees Earned 
C)  Supplies Expense 
D)  Dividends

Question 17

The issue of deciding when to record a transaction is solved by

Accepted Answer

A)  properly classifying the transaction. 
B)  deciding on a point of recognition. 
C)  assigning historical cost to the transaction. 
D)  analyzing the intent of management. 
A)  properly classifying the transaction. 
B)  deciding on a point of recognition. 
C)  assigning historical cost to the transaction. 
D)  analyzing the intent of management.

Question 18

The declaration and payment of a dividend will

Accepted Answer

A)  decrease net income. 
B)  increase liabilities. 
C)  not affect total assets. 
D)  decrease stockholders' equity. 
A)  decrease net income. 
B)  increase liabilities. 
C)  not affect total assets. 
D)  decrease stockholders' equity.

Question 19

Here is the trial balance for McLeary Corporation: $\begin{array}{c}
\text { McLeary Corporation}\
\text {  Trial Balance}\
\text {  January 31, 2010}\
\begin{array}{lrr}
\text { Cash } & \$ 3,000 \
\text { Accounts Receivable } & 2,000 \
\text { Art Supplies } & 3,000 \
\text { Office Supplies } & 5,000 \
\text { Prepaid Rent } & 7,000 \
\text { Prepaid Insurance } & 5,000 \
\text { Art Equipment } & 5,000 \
\text { Office Equipment } & 3,000\
\text { Accounts Payable } & & \$ 10,000 \
\text { Common Stock } && 5,000 \
\text { Retained Earnings } & &5,000\
\text {Dividends}&?\
\text {Advertising Fees Earned}&&?\
\text {Wages Expense}&?\
\text {Utilities Expense}&5,000\
\text {Telephone Expense}&3,000\
&\$A&\$B
\end{array}
\end{array}$ If the trial balance showed a balance of $7,000 in the Dividends account and a balance of $11,000 in the Wages Expense account,what would be the amount of Advertising Fees Earned for the period?

Accepted Answer

A)  $49,000 
B)  $39,000 
C)  $54,000 
D)  $24,000 
A)  $49,000 
B)  $39,000 
C)  $54,000 
D)  $24,000

Question 20

Which of the following accounts might be placed first in a journal entry?

Accepted Answer

A)  Bonds Payable, when it has been decreased 
B)  Cash, when it has been decreased 
C)  Unearned Revenue, when it has been increased 
D)  Interest Income, when it has been increased 
A)  Bonds Payable, when it has been decreased 
B)  Cash, when it has been decreased 
C)  Unearned Revenue, when it has been increased 
D)  Interest Income, when it has been increased

Exam 2: Analyzing Business Transactions

A net income of $10,000 means that the business received $10,000 more in cash from its customers than it spent to run the business.

Which of the following transactions decreases both assets and stockholders' equity?

If a debit to Supplies were posted as a credit,and a credit of the same amount to Cash were posted as a debit,what would be the effect,if any,on the two accounts and on the trial balance column totals?

For which of the following accounts would a related Accumulated Depreciation account be recorded?

The purpose of the ledger is to

One can obtain a clear picture of a company's liquidity by referring to its statement of cash flows.

Which of the following errors will not cause the debit and credit columns of the trial balance to be unequal?

Journal entries are typically posted only at the end of the year.

A credit to an asset account means that asset account has been increased.

Which of the following events does not result in the recording of an expense?

Which of the following accounts is decreased with a credit?

Given the following ledger account and postings,complete the Balance column.Assume no previous postings in the account.

It is sometimes correct for a compound entry's debit totals and credit totals to be unequal.

Fair Value is the exchange price associated with a business transaction at the time the transaction is recognized.

Which of the following accounts is increased with a credit?

The issue of deciding when to record a transaction is solved by

The declaration and payment of a dividend will

Which of the following accounts might be placed first in a journal entry?

Uses of Accounting Information and the Financial Statements

Measuring Business Income

Supplement - Closing Entries and the Work Sheet

Financial Reporting and Analysis

The Operating Cycle and Merchandising Operations

Inventories

Cash and Receivables

Current Liabilities and Fair Value Accounting

Long Term Assets

Long-Term Liabilities

Contributed Capital

Investments

The Corporate Income Statement and the Statement of Stockholders Equity

The Statement of Cash Flows

The Changing Business Environment - a Managers Perspective

Cost Concepts and Cost Allocation

Costing Systems- Job Order Costing

Costing Systems- Process Costing

Value-Based Systems- Abm and Lean

Cost Behavior Analysis

The Budgeting Process

Performance Management and Evaluation

Standard Costing and Variance Analysis

Short Run Decision Analysis

Capital Investment Analysis

Pricing Decisions,incltarget Costing and Transfer Pricing

Quality Management and Measurement

Financial Analysis of Performance

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