初會期中考題解

初會期中考題解

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MULTIPLE CHOICE QUESTIONS 1. A basic assumption of accounting that requires activities of an entity be kept separate from the activities of its owner is referred to as the a.stand alone concept. b.monetary unit assumption. c. corporate form of ownership. d.economic entity assumption. 2. Equity is best depicted by the following: a.Assets = Liabilities. b.Liabilities + Assets. c. Residual equity + Assets. d.Assets – Liabilities. 3. Benito Company began the year with equity of $350,000. During the year, the company recorded revenues of $500,000, expenses of $380,000, and paid dividends of $40,000. What was Benito’s equity at the end of the year? a.$510,000. b.$430,000. c. $810,000. d.$470,000. 4. External users of accounting information include all of following except a.the shareholders of Air Italy. b.the management of Pirelli. c. a potential customers of Olivetti. d.All of the above are external users of accounting information. 5. John and Sam met at law school and decide to start a small law practice after graduation. They agree to split revenues and expenses evenly. The most common form of business organization for a business such as this would be a a.joint venture. b.partnership. c. corporation. d.proprietorship. 6. In recording an accounting transaction in a double-entry system a.the number of debit accounts must equal the number of credit accounts. b.there must always be entries made on both sides of the accounting equation. c.the amount of the debits must equal the amount of the credits. d.there must only be two accounts affected by any transaction. 7. Omega Company pays its employees twice a month, on the 7 th
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and the 21 st . On June 21, Omega Company paid employee salaries of $4,000. This transaction would a.increase equity by $4,000. b.decrease the balance in Salaries Expense by $4,000. c.decrease net income for the month by $4,000. d.be recorded by a $4,000 debit to Salaries Payable and a $4,000 credit to Salaries Expense. 8. Rusthe Company showed the following balances at the end of its first year: Cash $ 14,000 Prepaid insurance 1,400 Accounts receivable 7,000 Accounts payable 5,600 Notes payable 8,400 Share capital-ordinary 2,800 Dividends 1,400 Revenues 42,000 Expenses 35,000 What did Rusthe Company show as total credits on its trial balance? a. $60,200 b. $58,800 c. $57,400 d. $61,600 9. Which of the following accounts is reported in the equity section of the statement of financial position? a.Dividends. b.Share capital-ordinary. c. Revenues d.All of the choices are reported in the equity section of the statement of financial position. 10. A complete journal entry does not show a.the date of the transaction. b.the new balance in the accounts affected by the transaction. c. a brief explanation of the transaction.
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This note was uploaded on 04/01/2011 for the course ACCT COST ACCT taught by Professor Wang during the Spring '11 term at National Taiwan University.

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初會期中考題解

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