Acc 201 Sample Test 1form 2 page 2

Acc 201 Sample Test 1form 2 page 2 - originally cost Tracey...

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On December 31, 2007 Larry's Golf Shop Inc. purchased a one-year fire insurance policy for the year 2008, paying $5000 cash. What is the net effect of this transaction on Total Assets, Total Liabilities and Total Stockholders’ Equity as of December 31,2007? A. Total Assets decrease, Total Liabilities decrease, and Total Stockholders’ Equity decrease B. Total Assets increase, Total Liabilities unaffected, and Total Stockholders’ Equity increase C. Total Assets unaffected, Total Liabilities increase, and Total Stockholders’ Equity unaffected D. Total Assets decrease, Total Liabilities increase, and Total Stockholders’ Equity decrease E. Total Assets unaffected, Total Liabilities unaffected, and Total Stockholders’ Equity unaffected 6. On December 31, 2007, Tracey’s Ice Cream Shop sold a piece of land for $10,000 cash that
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Unformatted text preview: originally cost Tracey $15,000. What is the correct entry to record this transaction? A. Cash $10,000 Gain on Sale of Land $ 5,000 Land $15,000 B. Cash $15,000 Revenue $15,000 C. Cash $10,000 Revenue $10,000 D. Cash $10,000 Land $10,000 E. Cash $10,000 Loss on the Sale of Land $ 5,000 Land $15,000 7. Which of the following statements are true? A. Closing entries bring all revenue accounts to zero balance. B. Closing entries bring all expense account to zero balance. C. Revenue and expense accounts are also called nominal accounts. D. The closing process is consistent with the periodic measurement of income. E. All of the above statements are true. 1...
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This note was uploaded on 03/19/2008 for the course ACCT 201 taught by Professor Anothony during the Fall '07 term at Michigan State University.

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