Question 1
The following transactions occurred during July:
o Received $900 cash for services provided to a customer during July.
o Received $2,200 cash investment from Barbara Hanson, the owner of the business.
o Received $750 from a customer in partial payment of his account receivable which arose from sales in June.
o Provided services to a customer on credit, $375.
o Borrowed $6,000 from the bank by signing a promissory note.
o Received $1,250 cash from a customer for services to be rendered next year.
What was the amount of revenue for July?
$ 900.
$ 1,275.
$ 2,525.
$ 3,275.
$11,100.
Question 2
The primary objective of financial accounting is:
To serve the decision-making needs of internal users.
To provide financial statements to help external users analyze an organization's activities.
To monitor and control company activities.
To provide information on both the costs and benefits of looking after products and services.
To know what, when, and how much to produce.
Question 3
The rule that requires financial statements to reflect the assumption that the business will continue operating instead of being closed or sold, unless evidence shows that it will not continue, is the:
Going-concern principle.
Business entity principle.
Objectivity principle.
Cost Principle.
Monetary unit principle.
Question 4
The total amount of depreciation recorded against an asset or group of assets during the entire time the asset or assets have been owned:
Is referred to as depreciation expense.
Is referred to as accumulated depreciation.
Is shown on the income statement of the final period.
Is only recorded when the asset is disposed of.
Is referred to as an accrued asset.
Question 5
PPW Co. leased a portion of its store to another company for eight months beginning on October 1, 2009, at a monthly rate of $800. This other company paid the entire $6,400 cash on October 1, which PPW Co. recorded as unearned revenue. The journal entry made by PPW Co. at year- end on December 31, 2009 would include:
A debit to Rent Earned for $2,400.
A credit to Unearned Rent for $2,400.
A debit to Cash for $6,400.
A credit to Rent Earned for $2,400.
A debit to Unearned Rent for $4,000
Question 6
Martha Company has an established petty cash fund in the amount of $500. The fund was last reimbursed on November 30. At the end of December, the fund contained the following petty cash receipts:
o December 4 Freight charge for merchandise purchased $42
o December 7 Freight charge for delivery to customer $66
o December 12 Purchase of office supplies $31
o December 18 Donation to charitable organization $50
If, in addition to these receipts, the petty cash fund contains $301 of cash, the journal entry to reimburse the fund on December 31 will include:
A debit to Transportation-In of $73.
A debit to Transportation-Out of $73.
A credit to Office Supplies of $66.
A credit to Cash Over and Short of $10.
A debit to Cash Over and Short of $10.
Question 7
The accounting guideline that requires financial statement information to be supported by independent, unbiased evidence other than someone's belief or opinion is the:
Business entity principle.
Monetary unit principle.
Going-concern principle.
Cost principle.
Objectivity principle.
Question 8
Multiple-step income statements:
Are required by the FASB.
Contain more detail than a simple listing of revenues and expenses.
Are required for the perpetual inventory system.
List cost of goods sold as an operating expense.
Can only be used in perpetual inventory systems.
Question 9
A company made a bank deposit on September 30 that did not appear on the bank statement dated as of September 30. In preparing the September 30 bank reconciliation, the company should:
Deduct the deposit from the bank statement balance.
Send the bank a debit memorandum.
Deduct the deposit from the September 30 book balance and add it to the October 1 book balance.
Add the deposit to the book balance of cash.
Add the deposit to the bank statement balance.
Question 10
Two common subgroups for liabilities on a classified balance sheet are:
current liabilities and intangible liabilities.
present liabilities and operating liabilities.
general liabilities and specific liabilities.
intangible liabilities and long-term liabilities.
current liabilities and long-term liabilities.