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sample_accounting_exam - ACCOUNTING ENTRANCE EXAMINATION...

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ACCOUNTING ENTRANCE EXAMINATION PRACTICE QUESTION SET J.M. TULL SCHOOL OF ACCOUNTING ENTRANCE EXAMINATION PRACTICE QUESTION SET Important: PRINT your response (A,B,C,D or E) that best completes the statement or answers the question next to the following Multiple Choice Questions. TOPIC: Introducing Accounting in Business 1. If the liabilities of a business increased $75,000 during a period of time and the equity in the business decreased $30,000 during the same period, the assets of the business must have: A) Decreased $105,000. B) Decreased $45,000. C) Increased $30,000. D) Increased $45,000. E) Increased $105,000. 2. A company paid off $30,000 of its accounts payable in cash. What would be the effects of this transaction on the accounting equation? 3. Determine the net income of a company for which the following information is available. Employee salaries expense... $180,000 Interest expense ................... 10,000 Rent expense ....................... 20,000 Consulting revenue .............. 400,000 4. According to generally accepted accounting principles, a company's balance sheet should show the company's assets at the cash equivalent value of what was given up. This is known as the: 5. A company collected $42,000 cash on its accounts receivable. The effects of this transaction as reflected in the accounting equation are: A) Total assets decrease and equity increases. B) Both total assets and total liabilities decrease. C) Total assets, total liabilities, and equity are unchanged. D) Both total assets and equity are unchanged and liabilities increase. E) Total assets increase and equity decreases.
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