Finance Quiz

1.

On January 31, an entity’s balance sheet showed total assets of $750 and liabilities of $250. Owners’ equity at January 31 was:

A)

$ 500

B)

$1,000

C)

$ 750

D)

$ 250

2.

The balance sheet shows amounts for:

revenues, expenses, losses, and liabilities.

revenues, expenses, assets, and liabilities.

assets, liabilities, income and owner’s equity.

assets, liabilities, paid in capital, and retained earnings.

3.

At the end of the year, retained earnings totaled $1,700. During the year, net income was $250, and dividends of $120 were declared and paid. Retained earnings at the beginning of the year totaled:

$2,070

$1,330

$1,230

$1,570

4.

A credit entry to an account will:

Always decrease the account balance.

Always increase the account balance.

Increase the balance of a revenue account.

Increase the balance of an expense account.

5.

For a hospital, performing surgeries and billing for the surgeries would:

Increase assets and increase revenues.

Increase assets and decrease liabilities.

Increase assets and increase paid-in capital.

Increase assets and decrease revenues.

6.

Given the following financial statement items, net income equals:

Accounts Receivable = 30000 Medical Supply Expense = 2000

Depreciation Expense = 1000 Supplies = 6000

Net Patient Revenue = 10000 Employee Expense = 4000

Equipment = 5000 Other revenue = 1000

Net Income equals:

$4000

$5000

$34000

$45000

7.

Given the following transaction, what T-Accounts would be effected? The hospital bought $100 of office supplies on credit.

Accounts Payable and Accounts Receivable

Accounts Payable and Office Supply Inventory

Cash and Short term debt

D)

Supply Expense and Accounts Receivable

A A = L + OE or 750 = 250 + ?

D Revenue, expenses, income, losses and gains are on the Income Statement

D REend = RE beg + NI – Div or 1700 = REbeg + 250 – 120

C Credits increases liabilities, OE and Revenue

A Performing Surgeries generated revenue and billing increases accounts receivable which is an asset.

A NI = All rev – all exp; so rev = 10000 + 1000 = 11000 and exp = 1000 + 2000 + 4000 = 7000; REV – EXP therefore is 11000 – 7000 = 4000

B With the transaction, we are in possession of the office supplies which means we now own them and therefore an asset had to increase. The asset is Office Supply Inventory. Since we paid for them on credit, this means we owe the vendor money, it is recorded in Accounts Payable.