Problem 1. Using the information below taken from the accounting books of Madison, for the year end Dec 31, 20x6 -Calculate on Dec 31, 20x6
01/ 01/x6 12/ 31/x6
Assets $ 3750 Assets??
Liabilities $2860.00 Liabilities $3455.00
Owner's Equity$? Owner's Equity$ 2565.00
Dividends paid $1230.00
A. $6020 b. $4790.00 c. $890 d. $295
Problem 2. The inventory account is increased by
a. Credits
B.debits
C. either a or b
D.neither a or b
Problem 3. At the beginning of the fiscal year the balance sheet showed assets of $682 and owner's equity of $418. During the year, the assets increased $37 and liabilities decreased $19 Owner's equity at the end of the year would total:
A. $418
b.436
C. $474
D. $719
Problem 4. EXPENSE AND REVENUE ACCOUNTS APPEAR on the:
a. Balance sheet
B.income statement
C.statement of owner's equity
D.cash flow statement
Problem 5. Which of the the following is NOT normally considered to be an asset?
A. cash
B. accounts receivable
c.land
D. accounts payable
Problem 6. The ethical concept of integrity means that an individual must:
a. Sign a pledge to abide by all laws and regulations
B.Report to a supervisor, any violation of the code of conduct of her company that is observed.
c.Read, understand and agree to follow all provisions of her employer's code of conduct
d. Attempt to be honest and forthright in dealings and communication with others
Problem 7. If the auditor is unable to achieve reasonable assurance because the company has not provided enough evidence the auditor will issue a (n):
a. Unqualified
b.Disclaimer
c. Adverse opinion
D.Qualified opinion
Problem 8. In completing an audit of a company's financial statements, auditors:
a. Provide some assurance that the financial statements are not misleading
b. Guarantee that there are no errors or fraud
c. Examine every transaction that relates to the financial statements
d. Prepare the financial statements
Problem 9. The sale of merchandise on account would, in the seller's records:
a. Increase assets and increase expenses
b. Increase assets and decrease expenses
C.Increase assets and increase revenues
D.Increase assets and decrease revenues
Problem 10. At the beginning of the fiscal year, the balance sheet showed assets $682 and owner's equity of $418. During the year, assets increased $37 and liabilities $19. Liabilities at the end of the totaled:
A. $245
B. $264
c.418
D. $455
Problem 11. Owner's equity refers to which to the following?
a. A listing of the organization's assets and liabilities
b. Is the ownership right of the owner(s) of the entity
c. Probable future sacrifices of economics
d. All of the above