Multiple choice question based on basic accounts.
1.A company started the year with $400 of supplies. During the year the company purchased additional supplies costing $1,600. There were $800 of supplies on hand at the end of the year. An adjusted trial balance prepared at the end of the accounting period will show the which of the following balance in Supplies:
a.$1,400.
b.$800.
c.$600.
d.$0.
2.The book value of an asset is computed as:
a.the cost of a plant asset less accumulated depreciation.
b.the cost of a plant asset plus accumulated depreciation.
c.depreciation expense plus accumulated depreciation.
d.the cost of a plant asset less depreciation expense.
3.When preparing a bank reconciliation, which of the following items should be added to the book balance?
a.EFT Receipts
b.Deposits in Transit
c.Collection Items
d.Both EFT Receipts and Collection Items
4.Under the allowance method, the entry to reinstate an account previously written off:
a.increases total assets.
b.increases net income and increases total assets.
c.decreases net income and increases total assets.
d.has no effect on net income or total assets.
5.The balance in Accounts Receivable was $650,000 at the beginning of the year and $350,000 at the end of the year. Sales for the year totaled $4,100,000. During the year, $400,000 in customer accounts were written off. How much cash was collected from customers during the period?
a.$3,750,000
b.$4,000,000
c.$4,400,000
d.$4,800,000
6.On the maturity date, the payee of a note will debit Cash and credit:
a.note receivable and interest revenue.
b.note payable and interest expense.
c.note receivable and interest expense.
d.note payable and interest revenue.
7.A perpetual inventory system offers which of the following advantages?
a.inventory balances have to be counted to be accurate.
b.this system is used for inexpensive goods.
c.this system is more expensive than a periodic system.
d.this system helps to determine if there is a sufficient supply of inventory on hand to fill customer orders, just byreviewing the inventory records.
8.Bonz, Inc. is using a perpetual inventory system with a December 31 year end date. The balance in this company's inventory account as of September 30 would be equal to:
a.beginning inventory as of January 01.
b.beginning inventory as of January 01 plus all purchases from the beginning of the year through S eptember 30 less all items sold from the beginning of the year through September 30.
c.beginning inventory as of January 01 plus all purchases from the beginning of the year through September 30.
d.all purchases from the beginning of the year through September 30.