Exam 1B - Spring 2011 - r ACCT 2103 Spring 2011 Exam l-B...

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Unformatted text preview: r; ACCT 2103 Spring 2011 Exam l-B NW“.— You must turn in both your exam pages and your green scantron. Do r_19_t complete your green scantron until completely finished with the exam. Record your name, class time (4:00pm), and test version number on the scantron. The test version number is provided on the last page of the exam. Do n_ot open or turn over your exam until your instructor tells you to begin. It is a violation of the ethical code of conduct to (1) provide any information regarding this exam to a student in a later exam section or receive information from a student in an earlier exam section and (2) use a programmable calculator with memory. A violation of this code of conduct may result in an F! for the course; Scafim Right 310w .mg a- Multiple Choice Questions ' ' Identifiz the letter of the choice that best completes the statement or answers the question. 1. Consider the following transactions: Issued common stock for cash. uricha‘hedflufiimfi by signing a note payable.“ )QPaid rent for the current month. fl Collected cash from customers on account. How ma of these four transactions increased the given company's total assets? Two. B. One. C. Four. D. Three. 2. Consider the following events for Sophia Incorporated: April 5 Sophia purchases voileyballs for $200 on account. ‘8; y‘lm Wk April 6 Sophia advertises a sand volleyball camp for $20 a person. April 3.2 Thirty people Sign up for the camp paying a total of $500. April 21 Sophia hosts the sand volleyball camp. 2: “all?” April 23 Sophia pays for the voileybails purchased on April 5. hr if? C C cV\ Under acc al—basis accounting, what is the appropriate day to record the revenuels ffom the sand volleyball camp? April 21. £er 5. 5/; he comm; am on «page. Ser the amp C. April 12. D. April 6. 3. DW has an ending Retained Earnings balance of $51,100. If during the year DW paid dividends of $4,300 and had net income of $22,500, then what was the beginning Retained Earnings balance? Wtfi. 9333;323:3333 4&9694- W ’ ' Eva 2/5 .. Na harm-«WV C. $69,300. A $100 D. $300. - 2% V ' ‘ ' ,chg it, 500 4. Styleson Inc. performed cleaning services for its cistllahiers‘for cash. These transactions would be recorded as: A. Debit Cash, credit Accounts Receivable. 7E Debit Accounts Receivable, credit Service Revenue. W @Dehit Cash, credit Service Revenue. bu Coal/l ,‘BCDebit Service Revenue, credit Cash. Gr W RM” 5. Which of the following would increase assets and increase liabilities? )4. Received a utility bill but do not pay for it. N 5E ‘5. Pay dividends to stockholders. CV 039‘“ b" “MW I“ , . , ‘Provide services to customers on account. “V A,“ . "X mh‘l . Cc Santa. KN Purchase office supphes on account. NW6“? A 6. The adjusting entry required when amogiits fpgreviously recorded as unearned revenues are earned includes: XA debit to an asset. b“ 0“ Kw . A credit to a liability. :5 Q 1 hr we A debit to a liability. Cr Sew Roi D. A credit to an asset. h: 0%? rod wwhég 7. Consider the llowing cash flow items: I Pay amount owed to bank for previous borrowing. Pay utility costs. Purchase equipment to be used in operations. I Purchase office supplies. I Pay one year of rent in advance. I Pay workers' salaries. I Pay for research and development costs. I Pay taxes to the IRS. I Sell common stock to investors. How many of these cash flow items involve investing activities? £26m. Three. , . Two. @One. 8. Which of the following items would not appear in an income statement? A. Salaries expense. @Cash. imam. swam/vi VANS aver/teesmcm We» Menu C. Advertising expense. g Service revenue. 9. Expenses normally carry a balance and are shown in the Debit; Statement of stockholders' equity gDebit; Balance Sheet Debit; Income statement >3. Credit; Balance sheet 10. On May 31, Money Corporation's Cash account showed a balance of $10,000 before the bank reconciliation was prepared. After examining the May bank statement and items included with it, the company's accountant found the following items: Clieekmtmrdifig $2.250 Damihg/ 1,900 NSF Check 100 Service fees 40 Error: Money Corp. wrote a check for $30 but recorded it incorrectly for $300. What is the amount of cash that should be reported in the company's balance sheet as of May 31? iiSfiiS: mm £330 >€:$9,650. — Mac.-- D. $9,860. . 11. The matching principle is the principle that states: A. The business is separate from its owners. All transactions are recorded at the exchange price. @All costs that are used to generate revenue are recorded in the period the revenue is recognized. . The business will continue to operate indefinitely unless there is evidence to the contrary. 12. On July 5, Harris Company purchased supplies from the hardware store for $600 on account. On July 10, Harris receives a bill from the hardware store as a reminder about the account balance. On July 17, Harris pays the account in full. How does Harris record the transaction on July 17? a. Supplies 600 1 Accounts Payable 600 b. Accounts Payable 600 Sgifih Supplies 600 0. Cash 600 Accounts Payable 600 Accounts Payable 600 Cash 600 13. Consider the following account balances of the Shattuck Law Firm as of December 31, 2012: How many of these accounts would appear in Shattuck's 2012 balance sheet? . Two. @Four. . Three. D. Five. 14. The financial statement(s) that record activity over an interval of time is (are) the: A. Balance sheet. alance sheet and income statement. Income statement and statement of cash flows. D. Income statement. 15. The following financial information is from Bronco Company. All debt is due within one year unless stated otherwise. Uneal ned Rex enue AccountsP 3y able What is the amount of current liabilities? . $45,600. 2, “$22,000. U/KA A/H‘V? 28,000. D. $63,000. 16. S er Leasing received $12,000 for 24 months rent in advance. How should Summer record this transaction? ebit Cash; credit Unearned Revenue. Debit Cash; credit Service Revenue CDebit Prepaid Rent; credit Rent Expense. Q (:06qu CT ‘Mb Webit Rent Expense; credit Cash. 17. Consider the following list of accounts. I Accounts Payable fl» I Cash fit I Prepaid Rent VJ ,, I Common Stock/ I Salaries Payable / L I Equipment W I Supplies 9‘ . I Rent Expense»< How many of these accounts have a normal credit balance? A. Four. Three. C. Five. D. Two. 18. Whic of the following is a possible adjusting journal entry? Debit Salaries Expense, credit Salaries Payable. B. Debit Utilities Expense, credit Retained Earnings. C. Debit Service Revenue, credit Cash. D. Debit Cash, credit Accounts Payable. 19. The components of internal control do not directly include: A. Monitoring. B. Control activities. C. Risk assessment. @Inflation adjustment. 20. How many of the following transactions are operating activities? I Borrowed $50, 000 from the bank \W /I Purchased $12,000 in supplies 0? «- Provide services to customers for $27 ,0000? 7- Paid the utility 13111 of $750 0% I Purchased a delivery truck for $12, 000 ““55? I Received $25, 000 from issuing common stock CINWWVA cw [Gr-‘4: @: 21. Use the following appropriate amounts to calculate net income: Revenues, $12,000; Liabilities, $5,000; Expenses, $4,000; Assets, $19, 000; Dividends, $4, 000. 0611 Q E A. $4,000. B. $14,000. Rev-'Bcgr/Nezt \W $8,000. . $6,000. 22. Assume that $18,000 cash is paid for insurance to cover the next year. The appropriate debit and credit are: A. Debit Insurance Expense $18,000, credit Prepaid Insurance $18,000. B. Debit Cash $18,000, credit Prepaid Insurance $18,000. ebit Prepaid Insurance $18,000, credit Insurance Expense $18,000. Debit Prepaid Insurance $18,000, credit Cash $18,000. 23. On January 1, Brad Inc. sold $30,000 in products to a customer on account. Then, on January 10, Brad collected the cash on that account. What is the impact on Brad's accounting equation from the collection of cash on January 10? @ssets decrease and liabilities decrease. CV . Assets increase and liabilities decrease. Dr Arm” 8“ . Assets increase and stockholders’ equity increases. No net effect to the accounting equation. 24. Posting is the process of: A. Obtaining information about external transactions from source documents. B. Listing all accounts and their balances at a particular date. C. Analyzing the impact of the transaction on the accounting equation. @Transferring the debit and credit information from the journal to individual accounts in the general ledger. 25. The purpose of closing entries is to transfer: A. Inventory to Cost of Goods Sold when merchandise is sold. Balances in temporary accounts to a permanent account. C. Accounts Receivable to Retained Earnings when an account is fully paid. D. Assets and liabilities when operations are discontinued. 26. When the company pays stockholders a dividend, what is the effect on the accounting equation for that company? KDecrease assets and decrease liabilities. @Decrease assets and decrease stockholders' equity. Increase liabilities and increase assets. ecrease stockholders' equity and increase assets. 27. Which of the following is a permanent account? etained Earnings B. Advertising Expense C. Service Revenue D. Dividends 28. Providing services on account would be recorded with a: Debit to Accounts Receivable. B. Credit to Accounts Payable. C. Debit to Service Revenue. D. Credit to Accounts Receivable. 29. On April 1, a $4,800 premium on a one-year insurance policy on equipment was paid and charged to Prepaid Insuran At the end of the year, the financial statements would report: J 0“ . @Insurance Expense, $3,600; Prepaid Insurance $1,200. “$133 7’ I" I“ 1 Insurance Expense, $4,800; Prepaid Insurance $0. WI) C. Insurance Expense, $1,200; Prepaid Insurance $3,600. 75» Insurance Expense, $3,650; Prepaid Insurance $4,800. 30. Which of the following is a possible closing entry? 7%. Debit Cash, credit Service Revenue. K Debit Cash, credit Retained Earnings. C. Debit Dividends, credit Retained Earnings. @Debit Service Revenue, credit Retained Earnings. 31. After preparing a bank reconciliation, the service fee charged by the bank would be recorded with: . A credit to Service Fees Revenue. A debit to Cash. debit to Service Fees Expense. . A credit to Service Fees Expense. DC amt”? 32. On July 1, 2012, Charlie Co. paid $18,000 to Rent-An-Office for rent covering 18 months from July 2012 through December 2013. What adjusting entry should Charlie Co. record on December 31, 2012? X Rent Expense 18,000 Cash 18,000 @6130 : WW Rent Expense 18,000 ( -.r W Prepaid Rent 18,000 0. Prepaid Rent 6,000 f‘ Rent Expense 6,000 (9/) Rent Expense 6,000 3 Prepaid Rent 6,000 33. Consider the following items: Land I Accounts Receivable @Notes Payable (due in three years) I Accounts Payable I Retained Earnings I Prepaid Rent I Unearned Revenue uildings I Notes Payable (due in six months) (I Equipment 93-h How man§ of the items listed above are generally long—term assets? UIN C D. Version #1 ...
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