GB518 Unit 2 Quiz

GB518 Unit 2 Quiz

1. Question : A companys Office Supplies account shows a beginning balance of $600 and an ending balance of $400. If office supplies expense for the year is $3,100, what amount of office supplies was purchased during the period?$2,700$2,900$3,300$3,500$3,700Question 2. Question : A 10-column spreadsheet used to draft a companys unadjusted trial balance, adjusting entries, adjusted trial balance and financial statements and which is an optional tool in the accounting process is a(n):Adjusted trial balanceWork sheetPost-closing trial balanceUnadjusted trial balanceGeneral ledgerQuestion 3. Question : Unearned revenue is reported on the financial statements as:A revenue on the balance sheetA liability on the balance sheetAn unearned revenue on the income statementAn asset on the balance sheetAn operating activity on the statement of cash flowsQuestion 4. Question : A company shows a $600 balance in Prepaid Insurance in the Unadjusted Trial Balance columns of the work sheet. The Adjustments columns show expired insurance of $200. This adjusting entry results in:$200 less in net income$200 more in net income$200 difference between the debit and credit columns of the Unadjusted Trial Balance$200 of prepaid insuranceAn error in the financial statementsQuestion 5. Question : A company had no office supplies available at the beginning of the year. During the year, the company purchased $250 worth of office supplies. On December 31, $75 worth of office supplies remained. How much should the company report as office supplies expense for the year?$75$125$175$250$325Question 6. Question : A company earned $2,000 in net income for October. Its net sales for October were $10,000. Its profit margin is:2%20%200%500%$8,000Question 7. Question : The Income Summary account is used:To adjust and update asset and liability accountsTo close the revenue and expense accountsTo determine the appropriate dividend amountIn some situations to replace the income statementTo replace the retained earnings account in some businessesQuestion 8. Question : A company purchased a new truck at a cost of $42,000 on July 1, 2011. The truck is estimated to have a useful life of 6 years and a salvage value of $3,000. How much depreciation expense will be recorded for the truck for the year ended December 31, 2011?$3,250$3,500$4,000$6,500$7,000Question 9. Question : Which of the following accounts would not be on the post closing trial balance?Accounts PayableAccounts ReceivableCommon StockDividendsRetained EarningsQuestion 10. Question : A trial balance prepared after the closing entries have been journalized and posted is the:Unadjusted trial balancePost-closing trial balanceGeneral ledgerAdjusted trial balanceWork sheetQuestion 11. Question : An account linked with another account that has an opposite normal balance and that is subtracted from the balance of the related account is a(n):Accrued expenseContra accountAccrued revenueIntangible assetAdjunct accountQuestion 12. Question : The approach to preparing financial statements based on recognizing revenues when they are earned and matching expenses to those revenues is:Cash basis accountingThe matching principleThe time period principleAccrual basis accountingRevenue basis accountingQuestion 13. Question : The Retained Earnings account has a credit balance of $17,000 before closing entries are made. If total revenues for the period are $55,200, total expenses are $39,800 and dividends are $9,000, what is the ending balance in the Retained Earnings account after all closing entries are made?$8,000$15,400$23,400$17,000$32,400Question 14. Question : A company pays each of its two office employees each Friday at the rate of $100 per day each for a five-day week that begins on Monday. If the monthly accounting period ends on Tuesday and the employees worked on both Monday and Tuesday, the month-end adjusting entry to record the salaries earned but unpaid is:Debit Unpaid Salaries $600 and credit Salaries Payable $600Debit Salaries Expense $400 and credit Salaries Payable $400Debit Salaries Expense $600 and credit Salaries Payable $600Debit Salaries Payable $400 and credit Salaries Expense $400Question 15. Question : The adjusted trial balance contains information pertaining to:Asset accounts onlyBalance sheet accounts onlyIncome statement accounts onlyAll general ledger accountsRevenue accounts onlyQuestion 16. Question : On January 1, Able Company purchased equipment costing $135,000 with an estimated salvage value of $10,500, and an estimated useful life of five years. What is the amount that should be recorded as depreciation on December 31?$27,000$24,900$29,100$135,000Question 17. Question : The special account used only in the closing process to temporarily hold the amounts of revenues and expenses before the net difference is added to (or subtracted from) the retained earnings account is the:Income Summary accountClosing accountBalance column accountContra accountQuestion 18. Question : Financial statements are typically prepared in the following order:Balance sheet, statement of retained earnings, income statementStatement of retained earnings, balance sheet, income statementIncome statement, balance sheet, statement of retained earningsIncome statement, statement of retained earnings, balance sheetQuestion 19. Question : A classified balance sheet:Measures a companys ability to pay its bills on timeOrganizes assets and liabilities into important subgroupsPresents revenues, expenses and net incomeReports operating, investing and financing activitiesReports the effect of profit and dividends on retained earningsQuestion 20. Question : Based on the following information, what would be the beginning balance in the Retained Earnings Account, assuming all accounts have a normal balance?Cash $ 6,754 Dividends $ 2,000Accounts receivable $ 13,733 Consulting fees earned $ 13,718Office supplies $ 2,625 Rent expense $ 3,673Land $ 37,153 Salaries expense $ 6,642Office equipment $ 14,535 Telephone expense $ 560Accounts payable $ 6,463 Miscellaneous expense $ 280Common stock $ 54,490 Retained Earnings ?$0$13,718$13,155$13,284Question 21. Question : If accrued salaries were recorded on December 31 with a credit to Salaries Payable, the entry to record payment of these wages on the following January 5 would include:A debit to Cash and a credit to Salaries PayableA debit to Cash and a credit to Prepaid SalariesA debit to Salaries Payable and a credit to CashA debit to Salaries Payable and a credit to Salaries ExpenseNo entry would be necessary on January 5Question 22. Question : On January 1 a company purchased a five-year insurance policy for $1,800 with coverage starting immediately. If the purchase was recorded in the Prepaid Insurance account and the company records adjustments only at year-end, the adjusting entry at the end of the first year is:Debit Prepaid Insurance, $1,800; credit Cash, $1,800Debit Prepaid Insurance, $1,440; credit Insurance Expense, $1,440Debit Prepaid Insurance, $360; credit Insurance Expense, $360Debit Insurance Expense, $360; credit Prepaid Insurance, $360Debit Insurance Expense, $360; credit Prepaid Insurance, $1,440Question 23. Question : The accrual basis of accounting:Is generally accepted for external reporting since it is more useful for most business decisionsIs flawed because it gives complete information about cash flowsRecognizes revenues when received in cashRecognizes expenses when paid in cashEliminates the need for adjusting entries at the end of each periodQuestion 24. Question : The difference between the cost of an asset and the accumulated depreciation for that asset is calledDepreciation ExpenseUnearned DepreciationPrepaid DepreciationDepreciation ValueBook ValueQuestion 25. Question : A trial balance prepared after adjustments have been recorded is called a(n):Balance sheetAdjusted trial balanceUnadjusted trial balanceClassified balance sheetUnclassified balance sheet


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