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[Question]
71. Unearned
revenues are:
A. Revenues that have been earned and received in cash
B. Revenues that have been earned but not yet collected in cash
C. Liabilities created when a customer pays in advance for products or services before the revenue is earned
D. Recorded as an asset in the accounting records
E. Increases to retained earnings
A. Revenues that have been earned and received in cash
B. Revenues that have been earned but not yet collected in cash
C. Liabilities created when a customer pays in advance for products or services before the revenue is earned
D. Recorded as an asset in the accounting records
E. Increases to retained earnings
Answer: C
Bloom’s
Taxonomy: Understand
AACSB: Analytic
AACSB: Communication
AICPA BB: Critical Thinking
AICPA BB: Industry
AICPA FN: Measurement
AICPA FN: Reporting
Difficulty: Medium
Learning Objective: 02-C2
AACSB: Analytic
AACSB: Communication
AICPA BB: Critical Thinking
AICPA BB: Industry
AICPA FN: Measurement
AICPA FN: Reporting
Difficulty: Medium
Learning Objective: 02-C2
[Question]
72. Prepaid
expenses are:
A. Payments made for products and services that do not ever expire
B. Classified as liabilities on the balance sheet
C. Decreases in retained earnings
D. Assets that represent prepayments of future expenses
E. Promises of payments by customers
A. Payments made for products and services that do not ever expire
B. Classified as liabilities on the balance sheet
C. Decreases in retained earnings
D. Assets that represent prepayments of future expenses
E. Promises of payments by customers
Answer: D
Bloom’s
Taxonomy: Understand
AACSB: Analytic
AACSB: Communication
AICPA BB: Critical Thinking
AICPA BB: Industry
AICPA FN: Measurement
AICPA FN: Reporting
Difficulty: Medium
Learning Objective: 02-C2
AACSB: Analytic
AACSB: Communication
AICPA BB: Critical Thinking
AICPA BB: Industry
AICPA FN: Measurement
AICPA FN: Reporting
Difficulty: Medium
Learning Objective: 02-C2
[Question]
73. A
written promise to pay a definite sum of money on a specific future date is
a(n):
A. Unearned revenue
B. Prepaid expense
C. Credit account
D. Note payable
E. Account receivable
A. Unearned revenue
B. Prepaid expense
C. Credit account
D. Note payable
E. Account receivable
Answer: D
Bloom’s
Taxonomy: Remember
AACSB: Analytic
AACSB: Communication
AICPA BB: Critical Thinking
AICPA BB: Industry
AICPA FN: Measurement
AICPA FN: Reporting
Difficulty: Medium
Learning Objective: 02-C2
AACSB: Analytic
AACSB: Communication
AICPA BB: Critical Thinking
AICPA BB: Industry
AICPA FN: Measurement
AICPA FN: Reporting
Difficulty: Medium
Learning Objective: 02-C2
[Question]
74. A
collection of all accounts (with account balances) used by a business is called
a:
A. Journal
B. Book of original entry
C. General Journal
D. Balance column journal
E. Ledger
A. Journal
B. Book of original entry
C. General Journal
D. Balance column journal
E. Ledger
Answer: E
Bloom’s
Taxonomy: Remember
AACSB: Analytic
AACSB: Communication
AICPA BB: Critical Thinking
AICPA BB: Industry
AICPA FN: Measurement
AICPA FN: Reporting
Difficulty: Medium
Learning Objective: 02-C2
AACSB: Analytic
AACSB: Communication
AICPA BB: Critical Thinking
AICPA BB: Industry
AICPA FN: Measurement
AICPA FN: Reporting
Difficulty: Medium
Learning Objective: 02-C2
[Question]
75. A
ledger is:
A. A record containing all accounts (with amounts) for a business
A. A record containing all accounts (with amounts) for a business
B. A
journal in which transactions are first recorded
C. A collection of documents that describe transactions and events during the accounting process
D. A list of all accounts with their debit balances at a point in time
E. A list of all accounts a company uses and includes an identification number assigned to each account
C. A collection of documents that describe transactions and events during the accounting process
D. A list of all accounts with their debit balances at a point in time
E. A list of all accounts a company uses and includes an identification number assigned to each account
Answer: A
Bloom’s
Taxonomy: Understand
AACSB: Analytic
AACSB: Communication
AICPA BB: Critical Thinking
AICPA BB: Industry
AICPA FN: Measurement
AICPA FN: Reporting
Difficulty: Medium
Learning Objective: 02-C2
AACSB: Analytic
AACSB: Communication
AICPA BB: Critical Thinking
AICPA BB: Industry
AICPA FN: Measurement
AICPA FN: Reporting
Difficulty: Medium
Learning Objective: 02-C2
[Question]
76. Which
of the following statements about the Cash account are true?
A. Because most companies earn their fees in cash, the cash account is categorized as revenue
B. For any given transaction Accounts Receivable and Cash can be used interchangeably because both accounts are measured in terms of cash
C. The cash account includes the value of any medium of exchange that a bank accepts for deposit
D. Both A and B are true statements
E. Both B and C are true statements
A. Because most companies earn their fees in cash, the cash account is categorized as revenue
B. For any given transaction Accounts Receivable and Cash can be used interchangeably because both accounts are measured in terms of cash
C. The cash account includes the value of any medium of exchange that a bank accepts for deposit
D. Both A and B are true statements
E. Both B and C are true statements
Answer: C
Bloom’s
Taxonomy: Apply
AACSB: Analytic
AACSB: Communication
AICPA BB: Critical Thinking
AICPA BB: Industry
AICPA FN: Measurement
AICPA FN: Reporting
Difficulty: Hard
Learning Objective: 02-C2
AACSB: Analytic
AACSB: Communication
AICPA BB: Critical Thinking
AICPA BB: Industry
AICPA FN: Measurement
AICPA FN: Reporting
Difficulty: Hard
Learning Objective: 02-C2
[Question]
77. A
list of all accounts used by a company and the identification number assigned
to each account is called a:
A. Ledger
B. Journal
C. Trial balance
D. Chart of accounts
E. General Journal
A. Ledger
B. Journal
C. Trial balance
D. Chart of accounts
E. General Journal
Answer: D
Bloom’s
Taxonomy: Remember
AACSB: Analytic
AACSB: Communication
AICPA BB: Critical Thinking
AICPA BB: Industry
AICPA FN: Measurement
AICPA FN: Reporting
Difficulty: Medium
Learning Objective: 02-C3
AACSB: Analytic
AACSB: Communication
AICPA BB: Critical Thinking
AICPA BB: Industry
AICPA FN: Measurement
AICPA FN: Reporting
Difficulty: Medium
Learning Objective: 02-C3
[Question]
78. The
general ledger of a business
A. Is a collection of all accounts used in a company's information system
B. Must be kept in a computer file
C. A and B
D. Is a set standard not affected by a company's size and diversity
E. A, B and D
A. Is a collection of all accounts used in a company's information system
B. Must be kept in a computer file
C. A and B
D. Is a set standard not affected by a company's size and diversity
E. A, B and D
Answer: A
Bloom’s
Taxonomy: Understand
AACSB: Analytic
AACSB: Communication
AICPA BB: Critical Thinking
AICPA BB: Industry
AICPA FN: Measurement
AICPA FN: Reporting
Difficulty: Hard
Learning Objective: 02-C3
AACSB: Analytic
AACSB: Communication
AICPA BB: Critical Thinking
AICPA BB: Industry
AICPA FN: Measurement
AICPA FN: Reporting
Difficulty: Hard
Learning Objective: 02-C3
[Question]
79. A
debit is:
A. An increase in an account
B. The right-hand side of a T-account
C. A decrease in an account
D. The left-hand side of a T-account
E. An increase to a liability account
A. An increase in an account
B. The right-hand side of a T-account
C. A decrease in an account
D. The left-hand side of a T-account
E. An increase to a liability account
Answer: D
Bloom’s
Taxonomy: Remember
AACSB: Analytic
AACSB: Communication
AICPA BB: Critical Thinking
AICPA BB: Industry
AICPA FN: Measurement
AICPA FN: Reporting
Difficulty: Easy
Learning Objective: 02-C4
AACSB: Analytic
AACSB: Communication
AICPA BB: Critical Thinking
AICPA BB: Industry
AICPA FN: Measurement
AICPA FN: Reporting
Difficulty: Easy
Learning Objective: 02-C4
[Question]
80. The
right side of a T-account is a(n):
A. Debit
B. Increase
C. Credit
D. Decrease
E. Account balance
A. Debit
B. Increase
C. Credit
D. Decrease
E. Account balance
Answer: C
Bloom’s
Taxonomy: Remember
AACSB: Analytic
AACSB: Communication
AICPA BB: Critical Thinking
AICPA BB: Industry
AICPA FN: Measurement
AICPA FN: Reporting
Difficulty: Easy
Learning Objective: 02-C4
AACSB: Analytic
AACSB: Communication
AICPA BB: Critical Thinking
AICPA BB: Industry
AICPA FN: Measurement
AICPA FN: Reporting
Difficulty: Easy
Learning Objective: 02-C4
[Question]
81. Which
of the following statements is incorrect?
A. The normal balance of accounts receivable is a debit
B. The normal balance of dividends is a debit
C. The normal balance of unearned revenues is a credit
D. The normal balance of an expense account is a credit
E. The normal balance of common stock is a credit
A. The normal balance of accounts receivable is a debit
B. The normal balance of dividends is a debit
C. The normal balance of unearned revenues is a credit
D. The normal balance of an expense account is a credit
E. The normal balance of common stock is a credit
Answer: D
Bloom’s
Taxonomy: Apply
AACSB: Analytic
AACSB: Communication
AICPA BB: Critical Thinking
AICPA BB: Industry
AICPA FN: Measurement
AICPA FN: Reporting
Difficulty: Easy
Learning Objective: 02-C4
AACSB: Analytic
AACSB: Communication
AICPA BB: Critical Thinking
AICPA BB: Industry
AICPA FN: Measurement
AICPA FN: Reporting
Difficulty: Easy
Learning Objective: 02-C4
[Question]
82. A
credit is used to record:
A. An increase in an expense account
B. An increase in an asset account
C. An increase in an unearned revenue account
D. A decrease in a revenue account
E. A decrease to retained earnings
A. An increase in an expense account
B. An increase in an asset account
C. An increase in an unearned revenue account
D. A decrease in a revenue account
E. A decrease to retained earnings
Answer: C
Bloom’s
Taxonomy: Apply
AACSB: Analytic
AACSB: Communication
AICPA BB: Critical Thinking
AICPA BB: Industry
AICPA FN: Measurement
AICPA FN: Reporting
Difficulty: Medium
Learning Objective: 02-C4
AACSB: Analytic
AACSB: Communication
AICPA BB: Critical Thinking
AICPA BB: Industry
AICPA FN: Measurement
AICPA FN: Reporting
Difficulty: Medium
Learning Objective: 02-C4
[Question]
83. A
simple account form widely used in accounting to illustrate how debits and
credits work is called a:
A. Dividend account
B. Common stock account
C. Drawing account
D. T-account
E. Balance column sheet
A. Dividend account
B. Common stock account
C. Drawing account
D. T-account
E. Balance column sheet
Answer: D
Bloom’s
Taxonomy: Remember
AACSB: Analytic
AACSB: Communication
AICPA BB: Critical Thinking
AICPA BB: Industry
AICPA FN: Measurement
AICPA FN: Reporting
Difficulty: Easy
Learning Objective: 02-C4
AACSB: Analytic
AACSB: Communication
AICPA BB: Critical Thinking
AICPA BB: Industry
AICPA FN: Measurement
AICPA FN: Reporting
Difficulty: Easy
Learning Objective: 02-C4
[Question]
84. Which
of the following statements is correct?
A. The left side of a T-account is the credit side
B. Debits decrease asset and expense accounts and increase liability, equity and revenue accounts
C. The left side of a T-account is the debit side
D. Credits increase asset and expense accounts and decrease liability, equity and revenue accounts
E. In certain circumstances the total amount debited need not equal the total amount credited for a particular transaction
A. The left side of a T-account is the credit side
B. Debits decrease asset and expense accounts and increase liability, equity and revenue accounts
C. The left side of a T-account is the debit side
D. Credits increase asset and expense accounts and decrease liability, equity and revenue accounts
E. In certain circumstances the total amount debited need not equal the total amount credited for a particular transaction
Answer: C
Bloom’s
Taxonomy: Apply
AACSB: Analytic
AACSB: Communication
AICPA BB: Critical Thinking
AICPA BB: Industry
AICPA FN: Measurement
AICPA FN: Reporting
Difficulty: Easy
Learning Objective: 02-C4
AACSB: Analytic
AACSB: Communication
AICPA BB: Critical Thinking
AICPA BB: Industry
AICPA FN: Measurement
AICPA FN: Reporting
Difficulty: Easy
Learning Objective: 02-C4
[Question]
85. An
account balance is:
A. The total of the credit side of the account
B. The total of the debit side of the account
C. The difference between the total debits and total credits for an account including the beginning balance
D. Assets = liabilities + equity
E. Always a credit
A. The total of the credit side of the account
B. The total of the debit side of the account
C. The difference between the total debits and total credits for an account including the beginning balance
D. Assets = liabilities + equity
E. Always a credit
Answer: C
Bloom’s
Taxonomy: Understand
AACSB: Analytic
AACSB: Communication
AICPA BB: Critical Thinking
AICPA BB: Industry
AICPA FN: Measurement
AICPA FN: Reporting
Difficulty: Medium
Learning Objective: 02-C4
AACSB: Analytic
AACSB: Communication
AICPA BB: Critical Thinking
AICPA BB: Industry
AICPA FN: Measurement
AICPA FN: Reporting
Difficulty: Medium
Learning Objective: 02-C4
[Question]
86. Of
the following accounts, the one that normally has a credit balance is:
A. Cash
B. Office Equipment
C. Sales Salaries Payable
D. Dividends
E. Sales Salaries Expense
A. Cash
B. Office Equipment
C. Sales Salaries Payable
D. Dividends
E. Sales Salaries Expense
Answer: C
Bloom’s
Taxonomy: Apply
AACSB: Analytic
AACSB: Communication
AICPA BB: Critical Thinking
AICPA BB: Industry
AICPA FN: Measurement
AICPA FN: Reporting
Difficulty: Medium
Learning Objective: 02-C4
AACSB: Analytic
AACSB: Communication
AICPA BB: Critical Thinking
AICPA BB: Industry
AICPA FN: Measurement
AICPA FN: Reporting
Difficulty: Medium
Learning Objective: 02-C4
[Question]
87. A
debit is used to record:
A. A decrease in an asset account
B. A decrease in an expense account
C. An increase in a revenue account
D. An increase in the balance of common stock
E. A decrease in the balance of retained earnings
A. A decrease in an asset account
B. A decrease in an expense account
C. An increase in a revenue account
D. An increase in the balance of common stock
E. A decrease in the balance of retained earnings
Answer: E
Bloom’s
Taxonomy: Apply
AACSB: Analytic
AACSB: Communication
AICPA BB: Critical Thinking
AICPA BB: Industry
AICPA FN: Measurement
AICPA FN: Reporting
Difficulty: Medium
Learning Objective: 02-C4
AACSB: Analytic
AACSB: Communication
AICPA BB: Critical Thinking
AICPA BB: Industry
AICPA FN: Measurement
AICPA FN: Reporting
Difficulty: Medium
Learning Objective: 02-C4
[Question]
88. A
credit entry:
A. Increases asset and expense accounts and decreases liability, common stock and revenue accounts
B. Is always a decrease in an account
C. Decreases asset and expense accounts and increases liability, common stock and revenue accounts
D. Is recorded on the left side of a T-account
E. Is always an increase in an account
A. Increases asset and expense accounts and decreases liability, common stock and revenue accounts
B. Is always a decrease in an account
C. Decreases asset and expense accounts and increases liability, common stock and revenue accounts
D. Is recorded on the left side of a T-account
E. Is always an increase in an account
Answer: C
Bloom’s
Taxonomy: Understand
AACSB: Analytic
AACSB: Communication
AICPA BB: Critical Thinking
AICPA BB: Industry
AICPA FN: Measurement
AICPA FN: Reporting
Difficulty: Medium
Learning Objective: 02-C4
AACSB: Analytic
AACSB: Communication
AICPA BB: Critical Thinking
AICPA BB: Industry
AICPA FN: Measurement
AICPA FN: Reporting
Difficulty: Medium
Learning Objective: 02-C4
[Question]
89. Double-entry
accounting is an accounting system:
A. That records each transaction twice
B. That records the effects of transactions and other events in at least two accounts with equal debits and credits
C. In which the impact of each transaction is recorded in two or more accounts but that could include two debits and no credits
D. That may only be used if T-accounts are used
E. That insures that errors never occur
A. That records each transaction twice
B. That records the effects of transactions and other events in at least two accounts with equal debits and credits
C. In which the impact of each transaction is recorded in two or more accounts but that could include two debits and no credits
D. That may only be used if T-accounts are used
E. That insures that errors never occur
Answer: B
Bloom’s
Taxonomy: Understand
AACSB: Analytic
AACSB: Communication
AICPA BB: Critical Thinking
AICPA BB: Industry
AICPA FN: Measurement
AICPA FN: Reporting
Difficulty: Hard
Learning Objective: 02-C4
AACSB: Analytic
AACSB: Communication
AICPA BB: Critical Thinking
AICPA BB: Industry
AICPA FN: Measurement
AICPA FN: Reporting
Difficulty: Hard
Learning Objective: 02-C4
[Question]
90. Which
of the following is a true statement regarding debits and credits?
A. If a company earned a profit, debits will not equal credits
B. For a business, debits are better than credits
C. A company's books are not in balance if they have a current period loss
D. Assets and expenses are both increased with a debit
E. Liabilities and equity are both increased with a debit
A. If a company earned a profit, debits will not equal credits
B. For a business, debits are better than credits
C. A company's books are not in balance if they have a current period loss
D. Assets and expenses are both increased with a debit
E. Liabilities and equity are both increased with a debit
Answer: D
Bloom’s
Taxonomy: Apply
AACSB: Analytic
AACSB: Communication
AICPA BB: Critical Thinking
AICPA BB: Industry
AICPA FN: Measurement
AICPA FN: Reporting
Difficulty: Hard
Learning Objective: 02-C4
AACSB: Analytic
AACSB: Communication
AICPA BB: Critical Thinking
AICPA BB: Industry
AICPA FN: Measurement
AICPA FN: Reporting
Difficulty: Hard
Learning Objective: 02-C4
[Question]
91. Rocky
Industries received its telephone bill in the amount of $300 and immediately
paid it. Rocky's general journal entry to record this transaction will include
a
A. Debit to Telephone Expense for $300
B. Credit to Accounts Payable for $300
C. Debit to Cash for $300
D. Credit to Telephone Expense for $300
E. Debit to Accounts Payable for $300
A. Debit to Telephone Expense for $300
B. Credit to Accounts Payable for $300
C. Debit to Cash for $300
D. Credit to Telephone Expense for $300
E. Debit to Accounts Payable for $300
Answer: A
Bloom’s
Taxonomy: Apply
AACSB: Analytic
AACSB: Communication
AICPA BB: Critical Thinking
AICPA BB: Industry
AICPA FN: Measurement
AICPA FN: Reporting
Difficulty: Easy
Learning Objective: 02-A1
AACSB: Analytic
AACSB: Communication
AICPA BB: Critical Thinking
AICPA BB: Industry
AICPA FN: Measurement
AICPA FN: Reporting
Difficulty: Easy
Learning Objective: 02-A1
[Question]
92. Management
Services, Inc. provides services to clients. On May 1, a client prepaid
Management Services $60,000 for 6-months contract in advance. Management
Services' general journal entry to record this transaction will include a
A. Debit to Unearned Management Fees for $60,000
B. Credit to Management Fees Earned for $60,000
C. Credit to Cash for $60,000
D. Credit to Unearned Management Fees for $60,000
E. Debit to Management Fees Earned for $60,000
A. Debit to Unearned Management Fees for $60,000
B. Credit to Management Fees Earned for $60,000
C. Credit to Cash for $60,000
D. Credit to Unearned Management Fees for $60,000
E. Debit to Management Fees Earned for $60,000
Answer: D
Bloom’s
Taxonomy: Apply
AACSB: Analytic
AACSB: Communication
AICPA BB: Critical Thinking
AICPA BB: Industry
AICPA FN: Measurement
AICPA FN: Reporting
Difficulty: Easy
Learning Objective: 02-A1
AACSB: Analytic
AACSB: Communication
AICPA BB: Critical Thinking
AICPA BB: Industry
AICPA FN: Measurement
AICPA FN: Reporting
Difficulty: Easy
Learning Objective: 02-A1
[Question]
93. Wisconsin
Rentals purchased office supplies on credit. The general journal entry made by
Wisconsin Rentals will include a:
A. Debit to Accounts Payable
B. Debit to Accounts Receivable
C. Credit to Cash
D. Credit to Accounts Payable
E. Credit to Retained Earnings
A. Debit to Accounts Payable
B. Debit to Accounts Receivable
C. Credit to Cash
D. Credit to Accounts Payable
E. Credit to Retained Earnings
Answer: D
Bloom’s
Taxonomy: Apply
AACSB: Analytic
AACSB: Communication
AICPA BB: Critical Thinking
AICPA BB: Industry
AICPA FN: Measurement
AICPA FN: Reporting
Difficulty: Medium
Learning Objective: 02-A1
AACSB: Analytic
AACSB: Communication
AICPA BB: Critical Thinking
AICPA BB: Industry
AICPA FN: Measurement
AICPA FN: Reporting
Difficulty: Medium
Learning Objective: 02-A1
[Question]
94. An
asset created by prepayment of an expense is:
A. Recorded as a debit to an unearned revenue account
B. Recorded as a debit to a prepaid expense account
C. Recorded as a credit to an unearned revenue account
D. Recorded as a credit to a prepaid expense account
E. Not recorded in the accounting records until the earnings process is complete
A. Recorded as a debit to an unearned revenue account
B. Recorded as a debit to a prepaid expense account
C. Recorded as a credit to an unearned revenue account
D. Recorded as a credit to a prepaid expense account
E. Not recorded in the accounting records until the earnings process is complete
Answer: B
Bloom’s
Taxonomy: Apply
AACSB: Analytic
AACSB: Communication
AICPA BB: Critical Thinking
AICPA BB: Industry
AICPA FN: Measurement
AICPA FN: Reporting
Difficulty: Medium
Learning Objective: 02-A1
AACSB: Analytic
AACSB: Communication
AICPA BB: Critical Thinking
AICPA BB: Industry
AICPA FN: Measurement
AICPA FN: Reporting
Difficulty: Medium
Learning Objective: 02-A1
[Question]
95. Robert Haddon contributed $70,000 in
cash and some land worth $130,000 to open a new business, RH Consulting. Which
of the following general journal entries will RH Consulting make to record this
transaction?
A.
A.
|
Assets
|
200,000
|
|
|
Common Stock
|
|
200,000
|
B.
|
Cash and Land
|
200,000
|
|
|
Common Stock
|
|
200,000
|
C.
|
Cash
|
70,000
|
|
|
Land
|
130,000
|
|
|
Common Stock
|
|
200,000
|
D.
|
Common Stock
|
200,000
|
|
|
Cash
|
|
70,000
|
|
Land
|
|
130,000
|
E.
|
Common Stock
|
200,000
|
|
|
Assets
|
|
200,000
|
Answer: C
Bloom’s
Taxonomy: Apply
AACSB: Analytic
AACSB: Communication
AICPA BB: Critical Thinking
AICPA BB: Industry
AICPA FN: Measurement
AICPA FN: Reporting
Difficulty: Medium
Learning Objective: 02-A1
AACSB: Analytic
AACSB: Communication
AICPA BB: Critical Thinking
AICPA BB: Industry
AICPA FN: Measurement
AICPA FN: Reporting
Difficulty: Medium
Learning Objective: 02-A1
[Question]
96. A
liability created by the receipt of cash from customers in payment for products
or services that have not yet been delivered to the customers is:
A. Recorded as a debit to an unearned revenue account
B. Recorded as a debit to a prepaid expense account
C. Recorded as a credit to an unearned revenue account
D. Recorded as a credit to a prepaid expense account
E. Not recorded in the accounting records until the earnings process is complete
A. Recorded as a debit to an unearned revenue account
B. Recorded as a debit to a prepaid expense account
C. Recorded as a credit to an unearned revenue account
D. Recorded as a credit to a prepaid expense account
E. Not recorded in the accounting records until the earnings process is complete
Answer: C
Bloom’s
Taxonomy: Apply
AACSB: Analytic
AACSB: Communication
AICPA BB: Critical Thinking
AICPA BB: Industry
AICPA FN: Measurement
AICPA FN: Reporting
Difficulty: Hard
Learning Objective: 02-A1
AACSB: Analytic
AACSB: Communication
AICPA BB: Critical Thinking
AICPA BB: Industry
AICPA FN: Measurement
AICPA FN: Reporting
Difficulty: Hard
Learning Objective: 02-A1
[Question]
97. On
September 30, the Cash account of Value Company had a normal balance of $5,000.
During September, the account was debited for a total of $12,200 and credited
for a total of $11,500. What was the balance in the Cash account at the
beginning of September?
A. A $0 balance
B. A $4,300 debit balance
C. A $4,300 credit balance
D. A $5,700 debit balance
E. A $5,700 credit balance
A. A $0 balance
B. A $4,300 debit balance
C. A $4,300 credit balance
D. A $5,700 debit balance
E. A $5,700 credit balance
Answer: B
Feedback: Normal
balance = debit
Bloom’s
Taxonomy: Analyze
AACSB: Analytic
AACSB: Communication
AICPA BB: Critical Thinking
AICPA BB: Industry
AICPA FN: Measurement
AICPA FN: Reporting
Difficulty: Hard
Learning Objective: 02-A1
AACSB: Analytic
AACSB: Communication
AICPA BB: Critical Thinking
AICPA BB: Industry
AICPA FN: Measurement
AICPA FN: Reporting
Difficulty: Hard
Learning Objective: 02-A1
[Question]
98. On
October 31, a company's Cash account had a normal balance of $7,000. During
October, the account was debited for a total of $4,250 and credited for a total
of $5,340. What was the balance in the Cash account at the beginning of
October?
A. $0 balance
B. $1,090 debit balance
C. $2,590 credit balance
D. $8,090 debit balance
E. $9,590 credit balance
A. $0 balance
B. $1,090 debit balance
C. $2,590 credit balance
D. $8,090 debit balance
E. $9,590 credit balance
Answer: D
Feedback: Normal
balance = debit
Bloom’s
Taxonomy: Analyze
AACSB: Analytic
AACSB: Communication
AICPA BB: Critical Thinking
AICPA BB: Industry
AICPA FN: Measurement
AICPA FN: Reporting
Difficulty: Hard
Learning Objective: 02-A1
AACSB: Analytic
AACSB: Communication
AICPA BB: Critical Thinking
AICPA BB: Industry
AICPA FN: Measurement
AICPA FN: Reporting
Difficulty: Hard
Learning Objective: 02-A1
[Question]
99. On
April 30, Holden Company had an Accounts Receivable balance of $18,000. During
the month of May, total credits to Accounts Receivable were $52,000 from
customer payments. The May 31 Accounts Receivable balance was $13,000. What was
the amount of credit sales during May?
A. $5,000
B. $47,000
C. $52,000
D. $57,000
E. $32,000
A. $5,000
B. $47,000
C. $52,000
D. $57,000
E. $32,000
Answer: B
Feedback: Normal
balance = debit
Bloom’s
Taxonomy: Analyze
AACSB: Analytic
AACSB: Communication
AICPA BB: Critical Thinking
AICPA BB: Industry
AICPA FN: Measurement
AICPA FN: Reporting
Difficulty: Hard
Learning Objective: 02-A1
AACSB: Analytic
AACSB: Communication
AICPA BB: Critical Thinking
AICPA BB: Industry
AICPA FN: Measurement
AICPA FN: Reporting
Difficulty: Hard
Learning Objective: 02-A1
[Question]
100. On November 30, a company
had an Accounts Receivable balance of $5,100. During the month of December,
total credits to Accounts Receivable were $76,000 from customer payments. The
December 31 Accounts Receivable balance was $43,000. What was the amount of
credit sales during December?
A. $8,100
B. $27,900
C. $70,900
D. $76,000
E. $113,900
A. $8,100
B. $27,900
C. $70,900
D. $76,000
E. $113,900
Answer: E
Feedback: Normal
balance = debit
Bloom’s
Taxonomy: Analyze
AACSB: Analytic
AACSB: Communication
AICPA BB: Critical Thinking
AICPA BB: Industry
AICPA FN: Measurement
AICPA FN: Reporting
Difficulty: Hard
Learning Objective: 02-A1
AACSB: Analytic
AACSB: Communication
AICPA BB: Critical Thinking
AICPA BB: Industry
AICPA FN: Measurement
AICPA FN: Reporting
Difficulty: Hard
Learning Objective: 02-A1
[Question]
101. The
Fireside Country Inn is a very popular destination for tourists. The Inn
requires guests to make reservations at least two months in advance of their
stay. A twenty percent down payment is required at the time the reservation is
made. When should this inn recognize room rental revenue?
A. On the date the reservation is received
B. On the date the money for the reservation is received
C. On the date the guests stay in the inn
D. On the date the guests pay the remaining eighty percent due
E. Once all cash has been received
A. On the date the reservation is received
B. On the date the money for the reservation is received
C. On the date the guests stay in the inn
D. On the date the guests pay the remaining eighty percent due
E. Once all cash has been received
Answer: C
Bloom’s
Taxonomy: Apply
AACSB: Analytic
AACSB: Communication
AICPA BB: Critical Thinking
AICPA BB: Industry
AICPA FN: Measurement
AICPA FN: Reporting
Difficulty: Hard
Learning Objective: 02-A1
AACSB: Analytic
AACSB: Communication
AICPA BB: Critical Thinking
AICPA BB: Industry
AICPA FN: Measurement
AICPA FN: Reporting
Difficulty: Hard
Learning Objective: 02-A1
[Question]
102. During
the month of February, Hoffer Company had cash receipts of $7,500 and cash
disbursements of $8,600. The February 28 cash balance was $1,800. What was the
January 31 beginning cash balance?
A. $700
B. $1,100
C. $2,900
D. $0
E. $4,300
A. $700
B. $1,100
C. $2,900
D. $0
E. $4,300
Answer: C
Feedback: X +
$7,500 - $8,600 = $1,800
Bloom’s
Taxonomy: Analyze
AACSB: Analytic
AACSB: Communication
AICPA BB: Critical Thinking
AICPA BB: Industry
AICPA FN: Measurement
AICPA FN: Reporting
Difficulty: Hard
Learning Objective: 02-A1
AACSB: Analytic
AACSB: Communication
AICPA BB: Critical Thinking
AICPA BB: Industry
AICPA FN: Measurement
AICPA FN: Reporting
Difficulty: Hard
Learning Objective: 02-A1
[Question]
103. During
March, a company had cash receipts of $2,300 and cash disbursements of $6,600.
The March 31 cash balance was $2,780. What was the March 1 beginning cash
balance?
A. $1,520
B. $7,080
C. $4,300
D. $8,900
E. $11,680
A. $1,520
B. $7,080
C. $4,300
D. $8,900
E. $11,680
Answer: B
Feedback: X +
$2,300 - $6,600 = $2,780
Bloom’s
Taxonomy: Analyze
AACSB: Analytic
AACSB: Communication
AICPA BB: Critical Thinking
AICPA BB: Industry
AICPA FN: Measurement
AICPA FN: Reporting
Difficulty: Hard
Learning Objective: 02-A1
AACSB: Analytic
AACSB: Communication
AICPA BB: Critical Thinking
AICPA BB: Industry
AICPA FN: Measurement
AICPA FN: Reporting
Difficulty: Hard
Learning Objective: 02-A1
[Question]
104. The
following transactions occurred during July:
Received $900 cash for services provided to a customer during July.
Received $2,200 cash investment from Barbara Hanson, the owner of the business.
Received $750 from a customer in partial payment of his account receivable, which arose from sales in June.
Provided services to a customer on credit, $375.
Signed a promissory note for a $6,000 bank loan.
Received $1,250 cash from a customer for services to be rendered next year.
What was the amount of revenue for July?
A. $900
B. $1,275
C. $2,525
D. $3,275
E. $11,100
Received $900 cash for services provided to a customer during July.
Received $2,200 cash investment from Barbara Hanson, the owner of the business.
Received $750 from a customer in partial payment of his account receivable, which arose from sales in June.
Provided services to a customer on credit, $375.
Signed a promissory note for a $6,000 bank loan.
Received $1,250 cash from a customer for services to be rendered next year.
What was the amount of revenue for July?
A. $900
B. $1,275
C. $2,525
D. $3,275
E. $11,100
Answer: B
Feedback: 900
+ 375 = 1,275
Bloom’s
Taxonomy: Analyze
AACSB: Analytic
AACSB: Communication
AICPA BB: Critical Thinking
AICPA BB: Industry
AICPA FN: Measurement
AICPA FN: Reporting
Difficulty: Hard
Learning Objective: 02-A1
AACSB: Analytic
AACSB: Communication
AICPA BB: Critical Thinking
AICPA BB: Industry
AICPA FN: Measurement
AICPA FN: Reporting
Difficulty: Hard
Learning Objective: 02-A1
[Question]
105.
Jones Hardware, Inc. pays a cash dividend of $6,000, what is the necessary entry to record this
transaction:
A. Debit Cash, Credit Retained Earnings
B. Debit Dividends, Credit Cash
C. Debit Common Stock, Credit Cash
D. Debit Cash, Credit Common Stock
E. Debit Cash, Credit Dividend Income
A. Debit Cash, Credit Retained Earnings
B. Debit Dividends, Credit Cash
C. Debit Common Stock, Credit Cash
D. Debit Cash, Credit Common Stock
E. Debit Cash, Credit Dividend Income
Answer: B
Bloom’s
Taxonomy: Apply
AACSB: Analytic
AACSB: Communication
AICPA BB: Critical Thinking
AICPA BB: Industry
AICPA FN: Measurement
AICPA FN: Reporting
Difficulty: Hard
Learning Objective: 02-A1
AACSB: Analytic
AACSB: Communication
AICPA BB: Critical Thinking
AICPA BB: Industry
AICPA FN: Measurement
AICPA FN: Reporting
Difficulty: Hard
Learning Objective: 02-A1
[Question]
106. These
transactions were completed by the art gallery opened by Zed Bennett.
Bennet started the gallery, Artery, by investing $40,000 cash and equipment valued at $18,000 in exchange for common stock.
Purchased $70 of office supplies on credit.
Paid $1,200 cash for the receptionist's salary.
Sold a painting for an artist and collected a $4,500 cash commission on the sale.
Completed an art appraisal and billed the client $200.
What was the balance of the cash account after these transactions were posted?
A. $12,230
B. $12,430
C. $43,300
D. $43,430
E. $61,430
Bennet started the gallery, Artery, by investing $40,000 cash and equipment valued at $18,000 in exchange for common stock.
Purchased $70 of office supplies on credit.
Paid $1,200 cash for the receptionist's salary.
Sold a painting for an artist and collected a $4,500 cash commission on the sale.
Completed an art appraisal and billed the client $200.
What was the balance of the cash account after these transactions were posted?
A. $12,230
B. $12,430
C. $43,300
D. $43,430
E. $61,430
Answer: C
Feedback: $40,000
- $1,200 + $4,500 = $43,300
Bloom’s
Taxonomy: Analyze
AACSB: Analytic
AACSB: Communication
AICPA BB: Critical Thinking
AICPA BB: Industry
AICPA FN: Measurement
AICPA FN: Reporting
Difficulty: Hard
Learning Objective: 02-A1
AACSB: Analytic
AACSB: Communication
AICPA BB: Critical Thinking
AICPA BB: Industry
AICPA FN: Measurement
AICPA FN: Reporting
Difficulty: Hard
Learning Objective: 02-A1
[Question]
107. The
debt ratio is used:
A. To measure the amount of equity relative to the expenses
B. To reflect the risk associated with a company's debts
C. Only by banks when a business applies for a loan
D. To determine how much debt a firm should pay off
E. To determine who a company owes
A. To measure the amount of equity relative to the expenses
B. To reflect the risk associated with a company's debts
C. Only by banks when a business applies for a loan
D. To determine how much debt a firm should pay off
E. To determine who a company owes
Answer: B
Bloom’s
Taxonomy: Understand
AACSB: Analytic
AACSB: Communication
AICPA BB: Critical Thinking
AICPA BB: Industry
AICPA FN: Measurement
AICPA FN: Reporting
Difficulty: Medium
Learning Objective: 02-A2
AACSB: Analytic
AACSB: Communication
AICPA BB: Critical Thinking
AICPA BB: Industry
AICPA FN: Measurement
AICPA FN: Reporting
Difficulty: Medium
Learning Objective: 02-A2
[Question]
108. Which
of the following formulas can be used to calculate the debt ratio?
A. Total Equity/Total Liabilities
B. Total Liabilities/Total Equity
C. Total Liabilities/Total Assets
D. Total Assets/Total Liabilities
E. Total Equity/Total Assets
A. Total Equity/Total Liabilities
B. Total Liabilities/Total Equity
C. Total Liabilities/Total Assets
D. Total Assets/Total Liabilities
E. Total Equity/Total Assets
Answer: C
Bloom’s
Taxonomy: Remember
AACSB: Analytic
AACSB: Communication
AICPA BB: Critical Thinking
AICPA BB: Industry
AICPA FN: Measurement
AICPA FN: Reporting
Difficulty: Medium
Learning Objective: 02-A2
AACSB: Analytic
AACSB: Communication
AICPA BB: Critical Thinking
AICPA BB: Industry
AICPA FN: Measurement
AICPA FN: Reporting
Difficulty: Medium
Learning Objective: 02-A2
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