ACC 311 Exam1 MC Questions

ACC 311 Exam1 MC Questions - EXAM I SECTION I MULTIPLE...

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EXAM I. SECTION I - MULTIPLE CHOICE (50 points - 2 points each) - Please choose the BEST answer for each question and record your answer on the Scantron answer sheet. 1. Assume a company’s January 1, 2007, financial position was: Assets, $75,000 and Liabilities, $30,000. During January 2007, the company completed the following transactions: (a) paid on a note payable $5,000 (no interest was paid); (b) collected an accounts receivable, $4,000; (c) paid an accounts payable, $3,000; and (d) purchased a truck, $2,000 cash, and a $13,000 note payable. The company’s January 31, 2007 financial position is Assets Liabilities Stockholders’ Equity A) $83,000 $38,000 $45,000 B) $80,000 $35,000 $45,000 C) $65,000 $35,000 $30,000 D) $78,000 $37,000 $41,000 E) None of the above is correct. 2. A company purchases $5,000 of office supplies in September 2007 and will pay for them in October 2007, which of the following statements is FALSE? A) The company will report an accounts payable of $5,000 in September 2007. B) The statement of cash flows will report an operating cash outflow of $5,000 in October 2007. C) The income statement will report the $5,000 as supplies expense in September 2007 when they are purchased. D) None of the above is false. E) All of the above are false. 3. Which of the following errors would most likely lead to an understatement of income in the current year? A) Recording revenue next period when the cash is collected although it is earned in the current year B) Paying for an expense this year when the expense will be incurred and recorded next year C) Failure to adjust the deferred rent revenue account for the portion of rent earned this year D) All of the above lead to understated income this period E) Only a. and c. above lead to understated income this period
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4. On July 1, 2006, Gerdin Company borrowed $100,000. The company signed a note payable with interest at 6 percent per year. The note and interest are due on December 31, 2006. On December 31, 2006, Goode paid $103,000 to settle the debt in full. Gerdin has not prepared any financial statements since borrowing the money. Transaction analysis of the $103,000 cash payment on December 31, 2006, should reflect the following: A) decrease assets, $103,000; decrease liabilities, $103,000 B) decrease assets, $100,000; decrease stockholders' equity, $3,000; and decrease liabilities, $103,000 C) decrease stockholders' equity, $100,000; decrease liabilities, $3,000; and decrease assets, $103,000 D) decrease liabilities, $100,000; decrease stockholders' equity, $3,000; and decrease assets, $103,000 E) None of the above is correct 5. On January 1, 2007, the ledger of Global Corporation correctly showed supplies inventory of $1,000. During 2007, supplies used amounted to $4,800. A count of the supplies on hand at December 31, 2007, showed $1,200 remaining. Consequently,
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This note was uploaded on 07/17/2008 for the course ACC 311 taught by Professor Charrier during the Spring '08 term at University of Texas.

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ACC 311 Exam1 MC Questions - EXAM I SECTION I MULTIPLE...

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