Review Test Submission (ALL).docx

Review Test Submission (ALL).docx - Course 201620-Prin of...

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Course 201620-Prin of Financial Accounting-22811 Review Test Submission: Test One Question 1 Patents, copyrights, and trademarks are examples of ________. Answer: intangible assets Question 2 A business makes a payment in cash for advertising expense. Which of the following accounts will be debited? Answer: Advertising Expense Question 3 Which of the following factors is assessed using the debt ratio? Answer: risk Question 4 Which of the following is the correct accounting equation? Answer: Assets = Liabilities + Equity Question 5 Which of the following accounts would be used under the accrual method of accounting, but not under cash basis accounting? Answer: Unearned Revenue Question 6 Posting a transaction means ________. Answer: transferring data from the journal to the ledger Question 7 The Accounts Receivable account is a(n) ________ account and carries a ________ normal balance. Answer: asset; debit Question 8 When is a trial balance usually prepared? Answer: before the financial statements are prepared Question 9 A company has $130,000 in current assets; $500,000 in total assets; $90,000 in current liabilities, and $110,000 in total liabilities. Calculate the current ratio of the company. Answer: 1.44 Response Feedback: Current ratio = Total current assets ÷ Total current liabilities Current ratio = $130,000 ÷ $90,000 = 1.44 Question 10 Which of the following statements is true of a trial balance? Answer: A trial balance is a list of all accounts with their balances. Question 11 An account that is not closed at the end of the period is called a(n) ________. Answer: permanent account Question 12 Which of the following groups of accounts normally have a debit balance?
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Answer: assets and expenses Question 13 Which of the following is considered a fiscal year? Answer: twelve months Question 14 Paramount Event Planning Services collects fees from its customers in advance. On January 1, 2015, the balance of its Unearned Revenue account had a balance of $6,000 (Cr.). During January and February, the company collected $3,000 and $1,000 as advance fees. During the two-month period, it rendered services of $6,500 related to the prepaid revenue. What is the balance in Unearned Revenue at the end of February? Answer: credit balance of $3,500 Response Feedback: Beginning balance in Unearned Revenue $ 6,000 Credit Unearned Revenue in January 3,000 Credit Unearned Revenue in February 1,000 Credit 10,000 Credit Less service rendered in January and February -6,500 Debit Ending balance in Unearned Revenue $3,500 Credit Question 15 Ace Inc. had the following transactions in June: Sold goods for $4,000 on account; received cash on account, $5,000; paid $800 for repair expense; paid $2,000 to a supplier that it owed from the previous month. What is the combined effect on Cash of the June transactions? Answer: a $2,200 increase Response Feedback: Cash = $5,000 - $800 - $2,000 = $2,200 increase Question 16 The account title used for recording the payment of rent in advance for an office building is ________.
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