Multiple Choice Accounting

| December 12, 2017

1) The balance sheet shows:A. The results of business operationsB. All revenues and expensesC. The Amount of net income or lossD. The financial position of a business at a given time2) Amounts that a business must pay in the future are known:A. Accounts ReceivableB. Accounts PayableC StockD. Expenses3) Examples of Assets are:A. Cash and Accounts receivablesB. Cash and RevenueC. Cash and Rent expenseD. Investments by the owner and revenue4. The income statement shows:A. The financial position of a business on a specific dateB. Revenue and stockholders equityC. The results of operations for a period of timeD. The total Value of the business5. If liabilities are $4,000 and stockholder’s equity is $15,000, assets are..A. $9,000B. $15,000C.$19,000D. $4,0006. Credits are used to record:A. Decreases in Assets and stockholder’s equity and increases in liabilitiesB. Decreases in assets, liabilities and stockholders equityC. Decreases in liabilities and increases in assets and stockholders equityD. Increases in liabilities and stockholders equity7. Debits are used to record increases in:A. Assets and RevenueB. Revenue and stockholders equityC. Assets and expensesD. Assets and liabilities8. The journal entry to record the sale of services on credit should include:A. debit to accounts receivable and credit to stockB. a debit to cash and a credit to accounts receivableC. A debit to fees income and a credit to accounts receivablesD. a debit to accounts receivable and credit to fees income9. The journal entry to record the payment of dividends for the month is:A. A debit to common stock and credit to cashB. A debit to Cash and a credit to dividendsC. A debit to Dividends and a credit to cashD. A debit to dividends and a credit to common stock10. If the prepaid expenses are not adjusted, assets on the balance sheetA. will be overstatedB. will be understatedC. Will not be affectedD. May be either overstated or understated11. 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 isA. $600B. $1200C. $1800D. $105012. The entry to record a purchase of merchandise on credit using a perpetual inventory system includesA. a debit to merchandise inventory and a credit to accounts payableB. a credit to merchandise inventory and a debit to accounts payableC. a debit to accounts payable and credit to purchasesD. a debit to purchases (COGS) and a credit to accounts payable13. 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 $60,000B. An owner lists the full cost of his or her personal automobile, which is occasionally used for business purposes, on the companys balance sheetC. 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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