Accounting -The balance sheet shows The results of business operations

| January 31, 2017

Question
1) The balance sheet shows:

A. The results of business operations

B. All revenues and expenses

C. The Amount of net income or loss

D. The financial position of a business at a given time

2) Amounts that a business must pay in the future are known:

A. Accounts Receivable

B. Accounts Payable

C Stock

D. Expenses

3) Examples of Assets are:

A. Cash and Accounts receivables

B. Cash and Revenue

C. Cash and Rent expense

D. Investments by the owner and revenue

4. The income statement shows:

A. The financial position of a business on a specific date

B. Revenue and stockholders equity

C. The results of operations for a period of time

D. The total Value of the business

5. If liabilities are $4,000 and stockholder’s equity is $15,000, assets are..

A. $9,000

B. $15,000

C.$19,000

D. $4,000

6. Credits are used to record:

A. Decreases in Assets and stockholder’s equity and increases in liabilities

B. Decreases in assets, liabilities and stockholders equity

C. Decreases in liabilities and increases in assets and stockholders equity

D. Increases in liabilities and stockholders equity

7. Debits are used to record increases in:

A. Assets and Revenue

B. Revenue and stockholders equity

C. Assets and expenses

D. Assets and liabilities

8. The journal entry to record the sale of services on credit should include:

A. debit to accounts receivable and credit to stock

B. a debit to cash and a credit to accounts receivable

C. A debit to fees income and a credit to accounts receivables

D. a debit to accounts receivable and credit to fees income

9. The journal entry to record the payment of dividends for the month is:

A. A debit to common stock and credit to cash

B. A debit to Cash and a credit to dividends

C. A debit to Dividends and a credit to cash

D. A debit to dividends and a credit to common stock

10. If the prepaid expenses are not adjusted, assets on the balance sheet

A. will be overstated

B. will be understated

C. Will not be affected

D. May be either overstated or understated

11. On May 1, 20XX, a firm purchased a 1-year insurance policy for $1800 and paid the full premium in advance. The insurance expense associated with this policy for 20XX is

A. $600

B. $1200

C. $1800

D. $1050

12. The entry to record a purchase of merchandise on credit using a perpetual inventory system includes

A. a debit to merchandise inventory and a credit to accounts payable

B. a credit to merchandise inventory and a debit to accounts payable

C. a debit to accounts payable and credit to purchases

D. a debit to purchases (COGS) and a credit to accounts payable

13. Which of the following is allowed under generally accepted accounting principles?

A. A company was offered $60,000 for land that it had purchased for $15,000. The company did not sell the land but increased the land account to $60,000

B. An owner lists the full cost of his or her personal automobile, which is occasionally used for business purposes, on the companys balance sheet

C. A large company recorded the $20 cost of a tool as an expense, although the item is expected to be used for 3 years.

D. The equipment ledger account shows a balance of $55,000. This amount represents the original cost of $75,000 less the accumulated depreciation of $20,000.

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