Question 1 of 50 Case 3.10 Business Week magazine receives $240,000 in advance for 2 years of…

Question 1 of 50

Case 3.10

Business Week magazine receives $240,000 in advance for 2 years of magazine subscriptions on 1-1-08. Business Week prepares annual financial statements on 12-31-08.

Referring to Case 3.10, if Business Week prepares monthly financial statements, how much subscription revenue should be recognized each month?

$16,000

$10,000

$12,000

$24,000

Question 2 of 50

Case 3.2

Oddessy Consulting pays $90,000 for three years of rent in advance on September 1, 2008. Oddessy prepares yearly financial statements on December 31, 2008.

Referring to Case 3.2, how much Prepaid Rent remains after the 12-31-09 adjusting entry?

$70,000

$60,000

$10,000

$50,000

Question 3 of 50

Accounting information should be able to be confirmed by an independent observer. For instance, a sale of a product should have documentation such as a sales order and sales invoice. This makes the information:

observable.

accessible.

verifiable.

none of the above.

Question 4 of 50

Which columns of the worksheet show the accounts after adjustments?

A) Income Statement

B) Adjusted Trial Balance

C) Balance Sheet

D) Both B and C

Question 5 of 50

Which of the following is a long term asset that is NOT depreciated?

Building

Machinery

Equipment

Land

Question 6 of 50

Which of the following is an example of a prepaid expense?

Insurance

Rent

Supplies

All of the above

Question 7 of 50

Which of the following concepts assumes the entity will remain in operation for the foreseeable future?

Reliable

Going concern

Cost

Entity

Question 8 of 50

Case 3.4

Lisa and Mel, Attorneys at Law, purchased $20,000 of supplies on 3-1-08. Lisa and Mel prepare financial statements on 12-31-08. $300 of supplies is left on 12-31-08.

Referring to Case 3.4, how much Supplies Expense should be recorded at 12-31-08?

$19,700

$20,000

$10,000

$300

Question 9 of 50

A business owes $20,000 for a utilities bill. How does this impact the accounting equation?

AssetsLiabilitiesOwner's Equity

A)IncreaseNo effectIncrease

B)No effectIncreaseDecrease

C)IncreaseIncreaseIncrease

D)IncreaseDecreaseNo effect

A

B

C

D

Question 10 of 50

AccountsDrCr

A)Accounts Payable$25,000

Salaries Expense$25,000

B)Owner, Withdrawals$25,000

Cash$25,000

C)Owner Expense$25,000

Cash$25,000

D)Cash$25,000

Owner, Withdrawals$25,000

Which of the following is the correct journal entry for an owner withdrawal of $25,000 in cash?

A)

B)

C)

D)

Question 11 of 50

Which of the following can be errors that occur in an accounting system?

Addition or subtraction error

Recording the wrong amount in the journal

Account balance calculated incorrectly

All of the above

Question 12 of 50

Which of the following is the purpose of financial accounting information?

Help investors, creditors, and others make decisions.

Comply with SEC and IRS rules.

To provide biased information to the markets for trading.

Help managers plan and control business operations.

Question 13 of 50

AccountsDrCr

A)Accounts Receivable$50,000

Equipment$50,000

B)Equipment$50,000

Owner's Capital$50,000

C)Equipment$50,000

Cash$50,000

D)Cash$50,000

Equipment$50,000

Which of the following is the correct journal entry for a purchase of equipment for $50,000 cash?

A)

B)

C)

D)

Question 14 of 50

Generally accepted accounting principles (GAAP) are created by the:

American Institute of Certified Public Accountants (AICPA).

Financial Accounting Standards Board (FASB).

Institute of Management Accountants (IMA).

Securities and Exchange Commission (SEC).

Question 15 of 50

Which of the following is a liability account?

Equipment

Cash

Accounts Payable

All of the above

Question 16 of 50

Case 3.7

Patrick Industries purchases new computer equipment for $60,000 on July 1, 2008. Patrick uses straight line depreciation, and the machinery is estimated to have a 3 year useful life and a zero salvage value. Patrick prepares financial statements on 12-31-08.

Referring to Case 3.7, what is the book value of the computer equipment at 12-31-08?

$50,000

$55,000

$40,000

$60,000

Question 17 of 50

Case 3.7

Patrick Industries purchases new computer equipment for $60,000 on July 1, 2008. Patrick uses straight line depreciation, and the machinery is estimated to have a 3 year useful life and a zero salvage value. Patrick prepares financial statements on 12-31-08.

Referring to Case 3.7, how much depreciation expense should Patrick recognize at 12-31-08?

$10,000

$20,000

$60,000

$5,000

Question 18 of 50

What part of the accounting system would indicate the profit or loss of a business?

The ledger

The income statement

The journal

The trial balance

Question 19 of 50

Case 3.1

Matta Industries pays $40,000 for two years of rent in advance on July 1, 2008. Matta prepares yearly financial statements on December 31, 2008.

Referring to Case 3.1, what is the adjusting journal entry on 12-31-08?

A)Prepaid Rent$40,000

Cash$40,000

B)Rent Expense$10,000

Prepaid Rent$10,000

C)Rent Expense$40,000

Prepaid Rent$40,000

D)Cash$40,000

Prepaid Rent$40,000

A)

B)

C)

D)

Question 20 of 50

Which of the following accounts is NOT a current asset?

Equipment

Accounts receivable

Inventory

Prepaid Insurance

Question 21 of 50

AccountsDrCr

A)Cash$5,000

Supplies$5,000

B)Supplies$5,000

Cash$5,000

C)Supplies$5,000

Accounts Payable$5,000

D)Accounts Payable$5,000

Supplies$5,000

Which of the following is the correct journal entry for purchasing $5,000 worth of supplies on credit?

A)

B)

C)

D)

Question 22 of 50

Revenues would have which of the following effects on the accounting equation?

Increase owner's equity

Increase assets

Decrease owner's equity

Increase liabilities

Question 23 of 50

Which of the following financial statements show the accounting equation?

Cash flows statement

Income statement

Balance sheet

Statement of owner's equity

Question 24 of 50

Recording a sale when a product or service has been provided is an example of which principle?

Going Concern

Time Period

Revenue recognition

Matching

Question 25 of 50

Which type of account would be increased by a credit?

Owner's Equity

Revenues

Liabilities

All of the above

Question 26 of 50

A net loss for a period will have which of the following effects?

Will decrease assets

Will increase owner's equity

Will increase assets

Will decrease owner's equity

Question 27 of 50

The post-closing trial balance:

will list permanent accounts with balances of zero.

lists the accounts and their adjusted balances after closing.

lists the accounts and their balances before closing.

does not do any of the above.

Question 28 of 50

Which of the following accounts is a long-term liability?

Salaries payable

Accrued liabilities

10 year notes payable

Accounts payable

Question 29 of 50

Which of the following is a written promise to pay?

Salaries payable

Accounts receivable

Accounts payable

Notes payable

Question 30 of 50

According to the book. The second step in the closing process is which of the following?

Close revenues to income summary.

Close income summary to owner's capital.

Close expenses to income summary.

Close owner's withdrawals to owner's capital.

Question 31 of 50

Case 3.9

Borrow Company has a $10,000 weekly payroll for wages based on a five day work week. Wages are paid every Friday.

Referring to Case 3.9, how much should be recorded as wage expense if the end of the accounting period is on Wednesday?

$4,000

$6,000

$2,000

$8,000

Question 32 of 50

Case 1.1

Imus Company has the following balances at year end (12-31-08):

Cash$55,000

Accounts Receivable$70,000

Supplies$3,000

Accounts Payable$4,000

Owner's Capital, 1/1$114,000

Revenues$200,000

Expenses$190,000

Referring to Case 1.1, Imus has a net income of:

$20,000.

$10,000.

$128,000.

$50,000.

Question 33 of 50

Which type of account would be increased by a debit?

Revenues

Owner's Equity

Liabilities

Assets

Question 34 of 50

A journal is which of the following?

A detailed record of the changes in a particular asset, liability, or owner's equity account

A chronological record of transactions

A list of all the accounts with their balances

A record of all the accounts

Question 35 of 50

What part of the accounting system would indicate the balance of any account at a point in time?

The ledger

The journal

The income statement

The trial balance

Question 36 of 50

Which of the following is an example of unearned revenue?

Supplies paid for with cash

For the student, paying tuition in advance

For a publishing company, magazine subscriptions that are prepaid

None of the above

Question 37 of 50

Which of the following accounts is an asset?

Utility expense

Prepaid insurance

Accounts payable

Owner's withdrawa

l

Question 38 of 50

Case 4.6

JJ Industries had the following accounts at year end:

Sales revenue$1,300,000Land and buildings$300,000

Prepaid insurance26,000Accounts payable17,000

Accounts Receivable38,000Total expenses1,033,000

Interest expense5,000Accumulated depreciation50,000

Equipment250,000Accrued liabilities (such as Salary payable)

Mortgage Payable220,00044,000

Refer to Case 4.6. JJ has current liabilities of:

$61,000.

$17,000.

$44,000.

$76,000.

Question 39 of 50

__________ adjustments are made because the cash transaction occurs before an expense or revenue is recorded.

Closing

Cash

Accruals

Prepaid

Question 40 of 50

Which of the following is the accounting equation?

Assets – liabilities = owner's equity

Assets + liabilities = owner's equity

Assets + liabilities = net income

Assest=liabilities + owner's equity

Question 41 of 50

Case 1.2

Patrick Company has the following balances at year end (12-31-09):

Cash$15,000

Inventory$70,000

Supplies$13,000

Accounts Payable$14,000

Note Payable$50,000

Owner's Capital, 1/1$14,000

Revenues$200,000

Expenses$180,000

Referring to Case 1.2, Patrick's ending (12-31-09):owner's capital is:

$34,000.

$20,000.

$128,000.

$10,000.

Question 42 of 50

The book value of a long term asset is calculated as which of the following?

Cost – Accumulated depreciation

Market value – Deprecation expense

Market value – Accumulated depreciation

Cost – Depreciation expense

Question 43 of 50

Which account would be increased by a credit?

Insurance Expense

Accrued Liabilities

Accounts Receivable

Cash

Question 44 of 50

If the assets of a business are $210,000 and the liabilities are $60,000, how much is the owner's equity?

$150,000

$160,000

$180,000

$170,00

Question 45 of 50

Case 4.1

Tyco had the following at year end:

Cash$34,000

Accounts receivable$50,000

Inventory$75,000

Accounts Payable$20,000

Owners' Capital$140,000

Owner's Withdrawal$10,000

Sales Revenue$220,000

Expenses$180,000

Refer to Case 4.1. What is the journal entry to close Sales Revenue?

A)Sales Revenue$220,000

Income Summary$220,000

B)Income Summary$220,000

Sales Revenue$220,000

C)Sales Revenue$220,000

Unearned Revenue$220,000

D)Expenses$220,000

Income Summary$220,000

A)

B)

C)

D)

Question 46 of 50

The payment and recognition of salaries expense will have which of the following effects?

Increase cash

Decrease cash

Increase owner's equity

Increase liabilities

Question 47 of 50

Case 3.5

Brenning CPA firm purchased $12,000 of supplies on 10-1-08. Brenning prepares monthly financial statements. $5,000 of supplies is left on 10-31-08.

Referring to Case 3.5, what is the adjusting entry for supplies at 10-31-08?

AccountsDrCr

A)Supplies Expense$7,000

Cash$7,000

B)Supplies Expense$5,000

Supplies$5,000

C)Supplies$12,000

Cash$12,000

D)Supplies Expense$7,000

Supplies$7,000

A)

B)

C)

D)

Question 48 of 50

What is the adjusting journal entry to record accrued wages?

Wages Payable Wage Expense

Wages Expense Cash

Cash Wages Payable

Wage Expense Wages Payable

Question 49 of 50

Which of the following financial statements show cash receipts and cash payments?

Balance sheet

Income statement

Statement of owner's equity

Cash flows statement

Question 50 of 50

Case 1.1

Imus Company has the following balances at year end (12-31-08):

Cash$55,000

Accounts Receivable$70,000

Supplies$3,000

Accounts Payable$4,000

Owner's Capital, 1/1$114,000

Revenues$200,000

Expenses$190,000

Referring to Case 1.1, Imus has total assets of:

$10,000.

$50,000.

$20,000.

$128,000.

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