USA: +1(669)289-8683 
Sign in
Question 1 of 50
Case 3.1
0
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?
Assets
Liabilities
Owner’s Equity
A)IncreaseNo effectIncrease
B)No effectIncreaseDecrease
C)IncreaseIncreaseIncrease
D)IncreaseDecreaseNo effect
ABCD
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 3.7Patrick 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?
RevenuesOwner’s EquityLiabilitiesAssets
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 1.1Imus Company has the following balances at year end (12-31-08):Cash$55,000Accounts Receivable$70,000Supplies$3,000Accounts Payable$4,000Owner’s Capital, 1/1$114,000Revenues$200,000Expenses$190,000
Referring to Case 1.1, Imus has total assets of:
$10,000.
$50,000.
$20,000. $128,000.
