Practice_midterm1_1

Practice_midterm1_1 - Practice Midterm 1 BUSACC 0030 Part I...

Info iconThis preview shows pages 1–3. Sign up to view the full content.

View Full Document Right Arrow Icon
Practice Midterm 1 BUSACC 0030 Part I Multiple Choice Questions (30 points) 1. Which of the following is a true statement concerning the matching principle? a. A company must pay for goods received in the same accounting period in which it receives the goods. b. Expenses must be assigned to the accounting period in which are incurred to produce revenue. c. The matching concept is especially important to the cash basis of accounting. d. Revenue must be matched to the accounting period in which goods are produced for sale. 2. Boone’s Cleaning Service performed cleaning services during December, 2006, but had not collected any cash from its customers by the end of 2006. What affect did performing these services have on the accounting equation? a. Increased assets and increased liabilities. b. Increased assets and increased stockholders’ equity. c. Increased assets and decreased stockholders’ equity. d. Decreased liabilities and increased stockholders’ equity 3. On May 1 st 2002, Company C paid $4,800 for an insurance premium on a two-year insurance policy. How much will the insurance expense be in years 2002 and 2003? a. $2,400 for each year. b. $1,600 for 2002 and 2,400 for 2003. c. $1,800 for 2002 and 2,400 for 2003. d. $1,600 for each year. 4. On Nov. 1 st , Company D received $5,000 from its customer for next 5 month magazine subscription. What effect does this transaction have on the accounts under the accrual basis of accounting? a. Increase assets and equity by $5,000 on Nov. 1 st . b. Increase assets and liabilities by $1,000 on Nov. 1 st . c. Increase equity and liabilities by $1,000 on Nov. 1 st . d. Increase equity and decrease liabilities by $1,000 on Nov. 30. 5. At the end of 2002, Tule Company had retained earnings of $40,900. It had sales of $52,400, expenses of $30,000, and dividend of $6,000 in 2003. What is the retained earnings at the end of year 2003? a. $40,900 b. $50,900 c. $57,300 d. $69,300 1
Background image of page 1

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
6. A company purchased land for $50,000 with $10,000 paid in cash and $40,000 in account payable due in three years from now. What effect does this transaction have on the accounts under the accrual basis of accounting? a. Net increase in assets of $40,000 and a net increase in liabilities of $40,000. b. Net increase in assets and liabilities of $50,000 c. Net increase in assets of 50,000 and a net decrease in liabilities of $40,000. d. Net increase in assets of 60,000 and a net decrease in liabilities of $40,000. 7. Which of the following is a correct statement about the unadjusted trial balance? a. It provides a listing of the balance sheet accounts only. b. There must not be any errors if the unadjusted trial balance is balanced.
Background image of page 2
Image of page 3
This is the end of the preview. Sign up to access the rest of the document.

This note was uploaded on 12/03/2011 for the course BUSACC 0030 taught by Professor Stevenonaitis during the Fall '08 term at Pittsburgh.

Page1 / 12

Practice_midterm1_1 - Practice Midterm 1 BUSACC 0030 Part I...

This preview shows document pages 1 - 3. Sign up to view the full document.

View Full Document Right Arrow Icon
Ask a homework question - tutors are online