Practice Test 1

Practice Test 1 - Jordan Kanter ACC 201 PracTest 1 Chapters...

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Jordan Kanter ACC 201 PracTest 1 Chapters 1 - 4 Name _________________________ 1. The right to receive money in the future is called a(n) a. account payable. b. account receivable. c. liability. d. revenue. 2. Net income results when a. Assets > Liabilities. b. Revenues = Expenses. c. Revenues > Expenses. d. Revenues < Expenses. 3. Reporting a net income of $95,000 will a. increase retained earnings. b. decrease retained earnings. c. increase common stock. d. decrease common stock. 4. If expenses are paid in cash, then a. assets will increase. b. liabilities will decrease. c. stockholders' equity will increase. d. assets will decrease. 5. An investment by the stockholders in a business increases a. assets and stockholders' equity. b. assets and liabilities. c. liabilities and stockholders' equity. d. assets only. 6. A debit to an asset account indicates a(n) a. error. b. credit was made to a liability account. c. decrease in the asset. d. increase in the asset. 7. A company spends $20 million dollars for an office building. Over what period should the cost be written off? a. When the $20 million is expended in cash b. All in the first year c. Over the useful life of the building d. After $20 million in revenue is earned
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PracTest 1 Chapters 1 - 4--Page 2 8. Which of the following accounts would not likely need to be adjusted at year end? a. Office Supplies b. Unearned Revenue c. Prepaid Advertising d. Land 9. Depreciation is the process of a. valuing an asset at its fair market value. b. increasing the value of an asset over its useful life in a rational and systematic manner. c. allocating the cost of an asset to expense over its useful life in a rational and systematic manner. d. writing down an asset to its real value each accounting period. 10. Draxon Company borrowed $10,000 from the bank signing a 6%, 3-month note on September 1. Principal and interest are payable to the bank on December 1. If the company prepares monthly financial statements, the adjusting entry that the company should make for interest on September 30, would be a. Debit Interest Expense, $600; Credit Interest Payable, $600. b. Debit Interest Expense, $50; Credit Interest Payable, $50.
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Practice Test 1 - Jordan Kanter ACC 201 PracTest 1 Chapters...

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