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Accounting Test Ch 1-5

Accounting Test Ch 1-5 - -33 BAF3M-Test Chapter 1-5 ~/55...

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' ./ ,.- 33+ BAF3M-Test Chapter 1-5 /55 PART A-Multiple Choice (use the scantron card provided to answer the following questions) ~ (Marks = 21) 1. The GAAP that states that revenue must be recorded in the accounts at the time the transaction is completed is: a) Time Period Concept b) Matching Principle c) Cost Principle .{!) Revenue Recognition e) Business Entity Concept 2. The GAAP that states that each expense item related to revenue earned must be recorded in the same period as the revenue it helped to earn is: a) Time Period Concept e) Matching Principle c) Cost Principle d) Revenue Recognition e) Business Entity Concept * 3. Calculate the Net Income/Net Loss from the information given on the Bolton Company which is an Air Service. Charter Flights Revenue $174,327, Insurance Expense $1746, Telephone Expense $1,416, Flying Lessons $78,604, Rent Expense $12,000, M. Belton, G ~ ~ 1- ,..87& , M ;-ee~t~ s $3 ,Q5Q: a) $159,165 R e.'ltv-- ve..- b) $215,891 £x\, € '(\$ e ", 15 1b'2. c) $211,941 d) $233,819 ~ $237,769 4. If the Bolton Company had a beginning Capital figure of $21 ,878, Drawings of $3,950, Net Income of $8,209, and-total Assets of $32.91 -7- , -the ending Capital figure would be: @) $26,137 b) $4,259 c) $30,087 d) $17,928 e) $58,814 5. Before a business is closed down, the equation for it is: Assets ($125,000) = Liabilities ($37,000) + Capital ($88,000). If assets of $70,000 are sold for $20,000, assets of $50,000 are sold for $90,000, and the remaining assets stay the same the equation will become: \ , , . . - ~ CtP f J.P j a) $55 000 = $37 000 + $18 000 /t oo-<"' ..-';- <'" \ L., ~ b I i ;.f- ·p.::. - , " ..7-> '- ' J , ':l> 7 0 0 D :S ~ 0 ~ 0 b) $75,000 = $37,000 + $38,000 \ '25 0 t) 0 '\ _ 51J ~ 19 V c) $135,000 = $47,000 + $88,000 ;~ ~ ~g g t y. o 0 d) $115,000 = $27,000 + $88,000 \ @ $115,000 = $37,000 + $78,000 \, 1
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--------------- BAF3M -Test Chapter 1-5 /55 NAME . ~ 6. As asset that will be converted into cash or used up within one year is: diP current liability current asset 7. The time period over which earnings are measured is: @) fiscal period 8. A debit entry: @ increases the balance of an equity account decreases a liability account 9. A debtor is: ~ . a) the left side of an account b) the right side of an account ® customers who owe money to the business d) a business or individual who we owe money to e) an amount of money borrowed from a bank
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