Practice Exam 2
(Chapters 2, 8, 17, 25 Section 2)
These practice questions do not cover every topic that may appear on the actual exam, but they
should be a part of your exam preparation.
You should also study your class notes, homework,
practice problems as well as the assigned reading from the textbook.
The purpose of the ledger is to
A. record chronologically the day’s transactions.
B. keep a record of documentation to support each transaction.
C. keep in one place all information about changes in specific account balances.
D. make sure that all assets, liabilities, etc., have normal balances at all times.
The Village Laundry Company purchased $6,500 worth of laundry supplies on June 2 and
recorded the purchase as an asset. On June 30, an inventory of the laundry supplies
indicated only $4,500 on hand.
The related journal entry that should be made by the
company on June 30 is
A. Debit Laundry Supplies Expense, $2,000; Credit Laundry Supplies, $2,000.
B. Debit Laundry Supplies Expense, $4,500; Credit Laundry Supplies, $2,000.
C. Debit Laundry Supplies Expense, $4,500; Credit Laundry Supplies, $4,500.
D. Debit Laundry Supplies, $4,500; Credit Laundry Supplies Expense, $4,500.
The ability to meet short-term obligations and to efficiently generate revenues is called:
Liquidity and efficiency.
04. Sales receipts are an example of which internal control principle?
Maintain adequate records.
Perform regular and independent reviews.
Divide responsibility for related transactions.
05. Leonard Matson completed these transactions during December of the current year:
Began company by investing $20,000
Purchased $5,000 of office equipment
Purchased $300 of supplies on account
Completed work for a client; received $900
Completed work for a Acme Company; sent a bill for $1,700
Paid for supplies purchased earlier
Received payment in full from Acme Company.
Based on the transactions above, what are the company’s total assets?
-- Page 1 of 6 --