1.

Which statement is incorrect?

a. Stockholders Equity is an account that is included in the chart of
accounts.
2. A chart of accounts for a business firm
a. Lists the accounts in the ledger
3. One of the best ways to learn journal entry recording is repetitive practice
a. True
4. Which of the following accounts probably would be listed before the others
in a chart of accounts?
a. Accumulated Depreciation-Buildings
5. In recording accounting transactions, evidence that a transaction has taken
place is obtained from
a. Source documents
6. Which of the following accounts has a normal credit balance?
a. Rent Revenue
7. A T-Account is
a. Used for accounts that have both a debit and a credit balance.
8. The usual sequence of steps in the transaction recording process is
a. Analyze, journalize, post to the ledger
9. At October 1, 2014, Metz Industries had an Accounts Payable balance of
$70,000. During the month, the company made purchases on account of
$50,000 and made payments on account of $80,000. At October 31, 2014, the
Accounts Payable balance is
a. 40,000 credit
10. Which of the following accounts has a normal debit balance?
a. Prepaid Rent
11. A journal is not useful for
a. Preparing financial statements
12. All of the following are significant contributions that the journal makes to the
recording process except the journal
a. Keeps complete information about changers in a specific account
balance in one place.
13. Transactions in a journal are initially recorded in
a. Chronological order
14. When a company has performed a service but has not yet received payment,
it
a. Debits accounts receivable and credits service revenue
15. A complete journal entry does not show
a. The new balance in the accounts affected by the transaction.
16. A trial balance proves
a. The mathematical equality of debits and credits after the posting
process.
17. A trial balance is a listing of
a. General ledger accounts and balances
18. The primary purpose of the trial balance is to
a. Prove the equality of the debit and credit amounts after posting
19. A trial balance will not balance if
a. A $50 cash dividend is debited to dividends for $500 and credit to
cash for $50.
20. A list of accounts and their balances at a given time is called an
a. Trial balance
21. K2 Corporation has assets of $2,400,000, common stock of $624,000, and
retained earnings of #380,000. What are the creditors claims on their
assets?
a. 1,396,000
22. Intangible assets are
a. Listed after property, plant, and equipment.
23. Use the following data to determine the total dollar amount of assets to be
classified as property, plant, and equipment (Eddy Auto Supply Dec 2014)
a. 376,000
24. Which of the following is not a current liability?
a. Bonds Payable
25. Long-term investments appear in the property, plant, and equipment section
of the balance sheet.
a. False
26. Some of the primary errors that can occur due to using lower level
accounting software include all of the following except
a. Excess distributions to owners for personal expenses
27. Accounting software today has been written so that pretty much one size fits
all
a. False
28. Due to the sophistication of accounting software today knowledge of
accounting basics is not longer a requirement to complete the accounting
function.
a. False
29. Primary role of the accountant in using accounting software includes
a. Applying Cash
30. Some common roles of an accounting clerk include
a. Maintaining the chart of accounts
31. The left side of an account is the
a. The debit side
32. An expense
a. Decreases stockholders equity
33. Which of the following statements is true?
a. Credits decrease assets and increase liabilites
34. An account will have a credit balance if the
a. Credits exceed the debits
35. Which accounts normally have debit balances?
a. Assets, expenses, and dividends
36. Unearned service revenue is classified as a liability on the balance sheet.
a. True
37. Powers Corporation received a cash advance of $500 from a customer. As a
result of this event
a. Assets increased by $500
38. The purchase of an asset on credit
a. Increases assets and liabilities
39. At September 1, 2014, Kern Enterprises reported a cash balance of $70,000.
During the month, Kern collected cash of $30,000 and made disbursements
of $50,000. At September 30, 2014, the cash balance is
a. $50,000 debit
40. Are advanced receipts from customers treated as revenue at the time of
receipt? Why or why not?
a. No, revenue cannot be recognized until the work is performed.
41. A credit is not the normal balance for which of the account listed below?
a. Dividends account
42. Using accrual accounting, expenses are recorded and reported only:
a. When they are incurred, whether or not cash is paid.
2. One of the accounting concepts which adjustments for prepayments and
accruals are based is
a. Expense Recognition
3. Under the accrual basis of accounting:
a. Events that change a companys financial statements are recognized in
the period they occur rather than in the period in which cash is paid
or received.
4. The following information from L Corporation for the fiscal year ending
October 31, 2014.
a. $174,000
5. The expense recognition principle is frequently referred to as the matching
principle.
a. True
6. A new accountant working for Metcalf Company records $800 Depreciation
Expense on store equipment as follows: The effect of this entry is to
a. Overstate the book value of the depreciable assets at December 31
7. The Trial Balance for Greenway Corporation appears as follows: if one
December 31, 2014, the insurance still unexpired amounted to $10, the
adjusting entry would contain a
a. Debit to insurance expense for $50
8. Give the data below for a firm in its first year of operation, determine net
income under the accrual basis of accounting:
a. $31,000
9. Under the cash basis of accounting, an amount received from a customer in
advance of providing the services would be reported as an
a. Revenue
10. Depreciation is the process of
a. Allocating the cost of an asset to expense over its useful life in a
rational and systematic manner.
11. Which of the following would not result in unearned revenue?
 a. Services performed on account.
12. If a business pays rent in advance and debits a prepaid rent account, the
company receiving the rent payment will credit
a. unearned rent revenue
13. Which account will have a zero balance after closing entries have been
journalized and posted?
a. Service Revenue
14. The information needed to determine whether a company is using
accounting methods similar to those of its competitors would be found in the
a. Notes to the financial statements
15. From an accounting standpoint, thee acquisition of long lived assets is
essentially a
a. Prepaid expense
16. The final step in the accounting cycle is to prepare
a. A post-closing trial balance
17. The trial balance for Greenway Corporation appears as follows: If service for
$125 had been performed but not billed, the adjusting entry to record this
would include
a. Credit to service revenue
18. The trial balance for greenway corporation appears as follows: If as of
December 31, 2014 rent of $120 for December had not been recorded or
paid, the adjusting entry would include:
a. A debit to rent expense
19. Which of the following steps in the accounting cycle usually occurs only at
the end of a companys annual accounting period?
a. Step 9: Prepare a post-closing trial balance
20. A trial balance for greenway corporation appears as follows: If the estimated
depreciation for equipment were $800, the adjusting entry would contain a
a. Credit accumulated depreciation, equipment for $800.
21. At March1, I. Repo Inc reported a balance in Supplies of $200. During March,
the company purchased supplies for $950 and consumed supplies of $700. If
no adjusting entry is made for supplies:
a. Stockholders equity will be overstated by $700.
22. Oakville inc, purchased a 12 month insurance policy on march 1, 2014 for
1800. At march 31, 2014 the adjusting journal entry to record expiration of
this asset will include:
a. A debit to insurance expense, and a credit to prepaid insurance for
$150
23. An adjusting entry can include a
a. A debit to an asset and a credit to a revenue
24. Green Realty Company received a check for $30,000 on July 1 which
represents a 6 month advance payment of rent on a building it rents to a
client. Unearned Rent Revenue was credited for the full $30,000. Financial
statements will be prepared on July 31. Green Realty should make the
following adjusting entry on July 31.
a. Debit unearned rent revenue, $5000, credit rent revenue $5000.
25. Regions Inc. pays its rent of $48,000 annually on January 1 and makes
monthly adjusting entries. If the February 28 monthly adjusting entry for
prepaid rent is omitted, which of the following are true?
a. Assets will be overstated by $4000 and net income and stockholders
equity will be overstated by $4000.
26. The closing entry process consists of closing
a. All temporary accounts
27. Given the following adjusted trial balance: After closing entries have been
posted, the balance in retained earnings will be
a. 6708
28. Given the following adjusted trial balance: After closing entries have been
posted, the balance in retained earnings will be:
a. 3354
29. Which trial balance will consist of the greatest number of accounts?
a. Adjusted trial balance
30. The primary source used in the preparation of the financial statements is the
a. Adjusted trial balance
31. Given the following adjusted trial balance, what will be the totals for the
debit and credit columns of the post closing trial balance?
a. 7170
32. Snelling Tables paid employee wages on a through Friday January 26, and the
next pay roll will be Friday in February. There are three more working days
in January (29-31). Employees work 5 days a week and the company pays
$900 a day in wages. What will be the adjusting entry to accrue wages
expense at the end of January?
a. Salaries and Wages expense 2700, salaries and wages payable 2700.
33. Which of the following statements below is not true?
a. An adjusted trial balance is prepared before all transactions have been
journalized
34. The following accounts show balances on the adjusted trial balance, which of
these account balances will not appear the same on the balance sheet?
a. Retained Earnings
35. Given the following adjusted trial balance: Net income for the year is
a. 98
36. Which of the following accounts balance will change between the adjusted
trial balance and the post-closing trial balance?
a. Retained earnings
37. Adjustments for accrued revenues:
a. Increase assets and increase revenues
38. Hoosher Enterprises purchased an 18 Month policy on May 31, 2014. The
December 31, 2014 balance sheet would report prepaid insurance of
a. 4400
39. An adjusted trial balance
a. Proves the equality of the total debit balances and total credit
balances of ledger accounts after all adjustments have been made
40. A company shows a balance in Salaries and Wages payable of $40,000 at the
end of the month. The next payroll amounting to 60,000 is to be paid in the
following month. What will be the journal entry to record the payment of
salaries?
a. Salareis and wages payable 40k, salaries and wages expense 20k, cash
60k.
41. Which of the following accounts will reflect the accounts beginning balance
on the adjusted trial balance?
a. Retained Earnings
42. Can financial statements be prepared directly from the adjusted trial
balance?
a. Yes, adjusting entries have been recorded in the general journal and
posted to the ledger accounts.
43. Employees at Biqueel Corporation are paid $9000 cash every Friday for
working Monday Through Friday. The calendar year accounting period ends
on Wednesday December 31, How much salaries and wages expense should
be recorded two days later on January 2?
a. 3600
44. Based on the account balances below, what is the total of the debit and credit
columns of the adjusted trial balance?
a. 11840
45. The difference between the cost of a depreciable asset and its related
accumulated depreciation is referred to as the
a. Book value of the asset
43.