1. What would be the appropriate entry for the subsequent transaction?
Bill Co. performed $5,200 in consulting services on account
Credit to Cash, Debit to Accounts Receivable
Debit to Revenue, Debit to Cash
Debit to Accounts Receivable, Credit to Cash
Debit to Revenue, Credit to Cash
Debit to Accounts Receivable, Credit to Revenue
2. The principle that needs revenue to be recognized at the time it is earned, (2) allows the inflow of assets associated with revenue to be in a form other than cash and (3) measures amount of revenue as the cash plus cash equivalent value of any non-cash assets received from customers in exchange for goods or services is called the:
Going-concern principle
Cost principle
Revenue recognition principle
Objectivity principle
Business entity principle
3. Generally Accepted Accounting Principles:
Focus on the review of a situation
Does not need financial statements
Never change
Intend to make information on the financial statements relevant, reliable and comparable
Oversees Security and Exchange Commission
4. If equity is $300,000 and liabilities are $192,000, then assets equal:
$108,000
$192,000
$300,000
$492,000
$792,000
5. Source documents add all of the subsequent except:
Sales tickets
Ledgers
Checks
Purchase orders
Bank statements
6. A credit is used to record:
An increase in an expense account
An increase in an unearned revenue account
An increase in an asset account
A decrease in a revenue account
A decrease to retained earnings
7. Which of the subsequent elements are found on the income statement?
Cash
Common Stock
Accounts Receivable
Retained Earnings
Salaries Expense
8. Technological advancement
Has replaced accounting
Has freed accounting professionals to concentrate more on the analysis and Has not changed the work that accountants do
In accounting has replaced the need for decision makers
interpretation of information
In accounting is only available to large corporations
9. If the liabilities of a business increased $75,000 through a period of time and the equity in the business decreased $30,000 through the same period, the assets of the business must have: (Points : 2)
Decreased $105,000
Decreased $45,000
Increased $30,000
Increased $45,000
10. Apatha Company has assets of $600,000, liabilities of $250,000 and equity of $350,000. It buys office equipment on credit for $75,000. The effects of transaction include:
Assets increase by $75,000 and expenses increase by $75,000
Assets increase by $75,000 and expenses decrease by $75,000
Liabilities increase by $75,000 and expenses decrease by $75,000
Assets decrease by $75,000 and expenses decrease by $75,000
Assets increase by $75,000 and liabilities increase by $75,000