Final Examination-Full - Final Examination AC201 Summer...

Final Examination-Full
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Final Examination AC201 Summer 2012
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1. A record of the increases and decreases in a specific asset, liability, equity, revenue, or expense is a(n): A. Journal. B. Posting. C. Trial balance. D. Account . E. Chart of accounts. 2. Which of the following statements is correct? A. When a future expense is paid in advance, the payment is normally recorded in a liability account called Prepaid Expense. B. Promises of future payment are called accounts receivable. C. Increases and decreases in cash are always recorded in the owner's capital account. D. An account called Land is commonly used to record increases and decreases in both the land and buildings owned by a business. E. Accrued liabilities include accounts receivable. 3. A collection of all accounts and their balances used by a business is called a: A. Journal. B. Book of original entry. C. General Journal. D. Balance column journal. E. Ledger . 4. Hal Smith opened Smith's Repairs on March 1 of the current year. During March, the following transactions occurred and were recorded in the company's books: Smith invested $25,000 cash in the business. 2. Smith contributed $100,000 of equipment to the business. 3. The company paid $2,000 cash to rent office space for the month. 4. The company received $16,000 cash for repair services provided during March. 5. The company paid $6,200 for salaries for the month. 6. The company provided $3,000 of services to customers on account. 7. The company paid cash of $500 for monthly utilities. 8. The company received $3,100 cash in advance of providing repair services to a customer. 9. Smith withdrew $5,000 for his personal use from the company. Based on this information, net income for March would be: A. $10,300 . B. $13,400. C. $5,300. D. $8,400. E. $13,500.
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5. If a company mistakenly forgot to record depreciation on office equipment at the end of an accounting period, the financial statements prepared at that time would show: A. Assets overstated and equity understated. B. Assets and equity both understated. C. Assets overstated, net income understated, and equity overstated. D. Assets, net income, and equity understated. E. Assets, net income, and equity overstated . 6. On April 30, a three-year insurance policy was purchased for $18,000 with coverage to begin immediately. What is the amount of insurance expense that would appear on the company's income statement for the year ended December 31? A. $500. B. $4,000 . C. $6,000. D. $14,000. E. $18,000. 7. A company pays each of its two office employees each Friday at the rate of $100 per day for a
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