Download MID-TERM #1

Practice for Final Exam: SUA Questions
Part I: 2 pts.each
_______ 1. If one part of a journal entry initially recognizes revenue, the other part of the entry might
a.
b.
c.
d.
e.
Increase an asset account.
Increase a liability account.
Decrease an asset account.
Decrease a liability account.
Increase an owner’s equity account.
_______ 2. The valuation of assets in the balance sheet is based on
a.
b.
c.
d.
What it would cost to replace the assets.
Cost, because cost usually is factual and capable of being verified.
Current fair market value as established by independent appraisers.
Cost, because in the event of liquidation, the assets would be sold at an amount equal to their original cost.
_______ 3. In a ledger, debit entries cause
a.
b.
c.
d.
Increases in owner’s equity, decreases in liabilities, and increases in assets.
Decreases in liabilities, increases in assets, and decreases in owner’s equity.
Increases in assets, decreases in liabilities, and increases in owner’s equity.
Decreases in assets, increases in liabilities, and increases in owner’s equity.
_______ 4. The four basic steps in the accounting process are listed below in random order. In what sequence do these steps
normally occur.
1.
2.
3.
4.
calculate the account balance
a transaction occurs
report the account information
record the transaction
a.
b.
c.
d.
1, 2, 3, 4
2, 4, 1, 3
3, 2, 4, 1
4, 1, 3, 2
_______ 5. If a transaction during the year caused one asset to increase by $40,000, and another asset to decrease by
$30,000, which of the following events may have caused these effects?
a.
b.
c.
d.
e.
Merchandise inventory was purchased and paid for entirely with cash.
Cash was received in exchange for Land that was sold at a loss.
Equipment was purchased and paid for partly with Cash and with an Account Payable for the difference.
Accounts Receivable were collected in Cash.
Merchandise inventory was sold on account.
_______ 6. Which of the following is not true of journals?
a.
b.
c.
d.
They are sometimes referred to as “books of original entry.”
They are in chronological order.
They show the detail of transactions.
They are more likely than ledgers to be eliminated in a computerized system.
_______ 7. First Company reported the following data:
Salaries payable, 1/1/x2
Salaries paid during 19x2
Salaries expense for 19x2
$ 5,000
40,000
42,000
The balance in the company’s salaries payable account on December 31, 19x2,must have been:
a.
b.
c.
d.
$2,000
$3,000
$7,000
Not enough information to judge
_______ 8. On February 1, 19x2, Katz Co. purchased $700 of supplies. The Supplies Expense Account was debited on
that date. At the end of February, Katz desired to prepare financial statements and discovered that only $300
of the supplies was still on hand. What adjusted entry should Katz record at the end of February?
a.
b.
c.
d.
Supplies
400
Supplies expense
400
Supplies
300
Supplies expense
300
Supplies expense 400
Supplies
400
Supplies expense 300
Supplies
300
_______ 9. In early May 19x4, Needlepoint Magazine sold a total of $600 of advertising to Best Threads for ads to be run
in the June, July and August monthly issues. Needlepoint credited Revenue for the amount received. What
adjusting entry should Needlepoint record on June 30, 19x4?
a.
b.
c.
d.
Accounts receivable
Unearned revenue
Unearned revenue
Revenue
Revenue
Accounts receivable
Revenue
Unearned revenue
400
400
200
200
200
200
400
400
_______ 10. Which of the following matches relating to financial statements is inaccurate?
a.
b.
c.
d.
e.
Balance Sheet: States the organization’s financial position for a period of time.
Income Statement: States the organization’s earnings for a period of time.
Statement of Cash Flows: State the organization’s cash receipts and cash disbursements for a period of time.
Statement of Owner’s Equity: State the investments by and distributions to the owner for a period of time.
All of the above matches are accurate.
_______ 11. All transactions are first recorded in
a.
b.
c.
d.
The trial balance
The general journal
A T-account
The general ledger
_______ 12. The term post means to
a.
b.
c.
d.
Record a transaction in the general journal.
Prepare a trial balance.
Record the effect of transactions on the general ledger.
Cross-reference entries in the general ledger.
_______ 13. The Income Summary account
a.
b.
c.
d.
e.
Appears on the balance sheet.
Appears on the income statement.
Appears on the statement of retained earnings.
Appears on the statement of cash flows.
Does not appear on any of the statements.
_______ 14. Southern Enterprises recently reported a gross profit of $50,000. Beginning and ending inventories during
the period amounted to $32,000 and $41,000, respectively. If cost of goods sold was 80% of net sales, the
company’s net purchases must have been:
a.
b.
c.
d.
$41,000
$59,000
$191,000
$209,000
_______ 15. The balance of a control account
a.
b.
c.
d.
Should equal the sum of the individual account balances contained in the subsidiary ledger.
Is generally found in a single account housed in the subsidiary ledger.
Should not be disclosed in the financial statements.
Is not useful for determining the accuracy of accounting transactions.