ExamView Pro - 3A_S06_MT2_vb

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Name: ________________________ Class: ___________________ Date: __________ ID: A 1 econ3a_s06_mt2 Multiple Choice Use your scantron on #1-25 to indicate the letter of the choice that best completes the statement or answers the question. THERE ARE TWO TEST VERSIONS, PLEASE BE SURE TO WRITE YOUR VERSION COLOR OR LETTER ON YOUR SCANTRON. 1. Which one of the following statements is true ? a. External events (transactions) involve interactions between an entity and a party outside the entity. b. Every event or transaction which affects an entity is identified from a source document. c. All economic events can be reliably measured. d. The transfer of raw material into production is an external event. 2. Which of the following is an internal event (transaction)? a. Life guard salaries are paid by a swim club. b. Dividends are distributed to shareholders. c. Eggs used to make omelets in a restaurant are purchased. d. Potato chips are transferred from the production line to the packaging area. 3. The purchase of office equipment on credit has what effect on the accounting equation? a. Assets decrease and owners' equity decreases b. Liabilities increase and owners' equity decreases c. Assets increase and liabilities increase d. Assets decrease and liabilities decrease 4. Which of the following statements best describes the effects of recognizing revenue earned by a business entity? a. Assets increase only when cash sales are made. b. Owners' equity increases only when credit sales are made. c. Assets and owners' equity increase when either cash or credit sales are made. d. Assets increase, but owners' equity decreases, when either cash or credit sales are made. 5. Which of the following statements regarding the activities of St. Jean Corp. is true ? a. Revenues decrease St. Jean's owners' equity. b. Expenses increase St. Jean's owners' equity. c. Expenses decrease St. Jean's owners' equity. d. Dividends distributed by St. Jean increase its owners' equity. 6. The Kelly Company purchased a building for $75,000 in cash. What is the effect on current assets? a. Increase in current assets b. Decrease in current assets c. No effect on current assets d. Unable to determine 7. An abbreviated version of an account which is useful for analyzing the effects of business transactions is the a. T account. b. trial balance. c. chart of accounts. d. double-entry system.
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ID: A 2 8. Debit entries are used to a. increase asset accounts. b. decrease expense accounts. c. increase liability accounts. d. increase revenue accounts. 9. Which pair of accounts has the same set of rules for debit and credit entries? a. Common stock (capital stock) and accounts payable b. Salaries expense and retained earnings c. Cash and notes payable d. Sales revenues and accounts receivable 10. Which of the following will not cause a trial balance to be out of balance? a.
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ExamView Pro - 3A_S06_MT2_vb - Name: _ Class: _ Date: _ ID:...

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