1. Chapter 1Introduction to Accounting and Business Question MC #4 (Points: 3) An entity that is organized according to state or federal statutes and in which ownership is divided into shares of stock is a 1. partnership 2. proprietorship 3. corporation 4. governmental unit Save Answer 2. Chapter 1Introduction to Accounting and Business Question MC #61 (Points: 3) How does paying a liability in cash affect the accounting equation? 1. assets increase; liabilities decrease 2. assets increase; liabilities increase 3. assets decrease; liabilities decrease 4. liabilities decrease; owner's equity increases Save Answer 3. Chapter 1Introduction to Accounting and Business Question MC #97 (Points: 3) The unit of measure concept: 1. requires that economic data be reported in yen in Japan or dollars in the U.S. 2. is only used in the financial statements of manufacturing companies. 3. is not important when applying the cost concept. 4. requires that different units be used for assets and liabilities. Save Answer 4. Chapter 1Introduction to Accounting and Business Question MC #25 (Points: 3) Which of the following are guidelines for behaving ethically? I. Identify the consequences of a decision and its effect on others. II. Consider your obligations and responsibilities to those affected by the decision. III. Identify your decision based on personal standards of honesty and fairness. 1. I and III. 2. II and III. 3. I, II, and III. 4. I and II. Save Answer 5. Chapter 1Introduction to Accounting and Business Question MC #50 (Points: 3) The monetary value charged to customers for the performance of services sold is called a(n) 1. net income 2. capital 3. revenue 4. asset Save Answer 6. Chapter 1Introduction to Accounting and Business Question MC #2 (Points: 3) Most businesses in the United States are 1. corporations 2. sole proprietorships 3. separate entities 4. partnerships Save Answer 7. Chapter 1Introduction to Accounting and Business Question TF #43 (Points: 3) Receiving payments on an account receivable increases both equity and assets. 1. False 2. True Save Answer 8. Chapter 2Analyzing Transactions Question TF #16 (Points: 3) The process of recording a transaction in the journal is called journalizing. 1. True 2. False Save Answer 9. Chapter 2Analyzing Transactions Question MC #89 (Points: 3) March 6 Cash 375 Unearned Fees 375 ???????????? 1. Received cash for services to be performed in the future. 2. Received cash for services performed 3. Paid cash in advance for services to be done. 4. Paid cash for services to be performed. Save Answer 10. Chapter 2Analyzing Transactions Question TF #47 (Points: 3) Owners capital will be reduced by the amount in the drawing account. 1. False 2. True Save Answer 11. Chapter 2Analyzing Transactions Question MC #31 (Points: 3) Which of the following entries records the investment of cash by Ron York, owner of a proprietorship? 1. debit Cash; credit Ron York, Drawing 2. debit Cash; credit Ron York, Capital 3. debit Ron York, Drawing; credit Cash 4. debit Ron York, Capital; credit Accounts Receivable Save Answer 12. Chapter 2Analyzing Transactions Question TF #54 (Points: 3) Journal entries can have more than two accounts as long as the debits equal the credits. 1. False 2. True Save Answer 13. Chapter 2Analyzing Transactions Question MC #97 (Points: 3) The chart of account for the Corning Company includes some of the following accounts: Account Name Account Number Cash 11 Accounts Receivable 13 Prepaid Insurance 15 Accounts Payable 21 Unearned Revenue 24 Corning, Capital 31 Corning, Drawing 32 Fees Earned 41 Salaries Expense 54 Rent Expense 56 On the journal page 3, the following transaction was found: Prepaid Insurance 1,530 Cash 1,530 What is the post reference that will be found on the Prepaid Insurance account? 1. 15 2. None 3. 11 4. 3 Save Answer 14. Chapter 2Analyzing Transactions Question MA #1-8 (Points: 3) Several types of errors can be made during the journalizing and posting process. Match the following with their best description. Column preview Balance incorrectly computed. Posting errors Debit or credit posting omitted. Account balance errors Wrong amount posted to an account. Trial balance preparation errors Column incorrectly added. Balance entered in wrong column of account. Amount incorrectly entered on trial balance. Balance entered in wrong column or omitted. Debit posted as credit, or vice versa. Matching pairs Balance incorrectly computed. Debit or credit posting omitted. Wrong amount posted to an account. Column incorrectly added. Balance entered in wrong column of account. Amount incorrectly entered on trial balance. Balance entered in wrong column or omitted. Debit posted as credit, or vice versa. Save Answer 15. Chapter 3The Adjusting Process Question TF #33 (Points: 3) Depreciation Expense is reported on the balance sheet as an addition to the related asset. 1. False 2. True Save Answer 16. Chapter 3The Adjusting Process Question MC #47 (Points: 3) If there is a balance in the prepaid rent account after adjusting entries are made, it represents a(n) 1. liability 2. accrual 3. revenue 4. deferral Save Answer 17. Chapter 3The Adjusting Process Question TF #24 (Points: 3) Adjustments for accruals are needed to record a revenue that has been earned or an expense that has been incurred but not recorded. 1. True 2. False Save Answer 18. Chapter 3The Adjusting Process Question MC #36 (Points: 3) The adjusting entry to record the depreciation of equipment for the fiscal period is 1. debit Accumulated Depreciation; credit Depreciation Expense 2. debit Equipment; credit Depreciation Expense 3. debit Depreciation Expense; credit Equipment 4. debit Depreciation Expense; credit Accumulated Depreciation Save Answer 19. Chapter 3The Adjusting Process Question MC #18 (Points: 3) Which of the following supports the accrual basis of accounting? 1. matching concept 2. cash concept 3. revenue recognition and matching concepts 4. revenue recognition concept Save Answer 20. Chapter 3The Adjusting Process Question MC #83 (Points: 3) All of the following statements regarding vertical analysis are true except: 1. In a vertical analysis of a balance sheet, each asset item is stated as a percent of total assets. 2. Vertical analysis may be prepared for several periods to analyze changes in relationships over time. 3. Major differences between a companys vertical analysis and industry averages should be investigated. 4. In a vertical analysis of an income statement, each item is stated as a percent of total expenses. Save Answer 21. Chapter 3The Adjusting Process Question TF #5 (Points: 3) The matching concept requires expenses be recorded in the same period that the related revenue is recorded. 1. True 2. False Save Answer 22. Chapter 4Completing the Accounting Cycle Question TF #73 (Points: 3) Accounts reported on the balance sheet that are carried forward from year to year are known as permanent accounts. 1. False 2. True Save Answer 23. Chapter 4Completing the Accounting Cycle Question TF #74 (Points: 3) Real accounts are not permanent accounts. 1. True 2. False Save Answer 24. Chapter 4Completing the Accounting Cycle Question MC #21 (Points: 3) The Balance Sheet should be prepared 1. after the income statement and the statement of owners equity 2. before the income statement and after the statement of owners equity 3. after the income statement and before the statement of owners equity 4. before the income statement and the statement of owners equity Save Answer 25. Chapter 4Completing the Accounting Cycle Question TF #33 (Points: 3) The drawing account is closed to the income summary account. 1. False 2. True Save Answer 26. Chapter 4Completing the Accounting Cycle Question TF #12 (Points: 3) Cash and other assets that may reasonably be expected to be realized in cash, sold, or consumed through the normal operations of a business, usually longer than one year, are called current assets. 1. False 2. True Save Answer 27. Chapter 4Completing the Accounting Cycle Question MC #19 (Points: 3) Use the following information in the adjusted trial balance for Stockton Company to answer the following questions. Stockton Company Adjusted Trial Balance For the Year ended December 31, 2010 Cash $ 6,030 Accounts Receivable 2,100 Prepaid Expenses 700 Equipment 13,700 Accumulated Depreciation $ 1,100 Accounts Payable 1,900 Notes Payable 4,200 Bob Steely, Capital 12,940 Bob Steely, Withdrawals 790 Fees Earned 8,750 Wages Expense 2,500 Rent Expense 1,960 Utilities Expense 775 Depreciation Expense 250 Miscellaneous Expense 85 Totals $28,890 $28,890 Determine the current assets. 1. $8,830 2. $22,530 3. $21,430 4. $8,130 Save Answer 28. Chapter 4Completing the Accounting Cycle Question MC #5 (Points: 3) When preparing the statement of owner's equity, the beginning capital balance can always be found 1. in the Income Statement columns of the work sheet 2. in the Balance Sheet columns of the work sheet 3. in the general ledger 4. in the statement of cash flows Save Answer 29. Chapter 4Completing the Accounting Cycle Question MC #53 (Points: 3) Use the following worksheet to answer the following questions. Finley Company Worksheet For the Year Ended December 31, 2010 Adjusted Trial Balance Income Statement Balance Sheet Account Title Debit Credit Debit Credit Debit Credit Cash 48,000 48,000 Accounts Receivable 18,000 18,000 Supplies 6,000 6,000 Equipment 57,000 57,000 Accumulated Depr-Equip 18,000 18,000 Accounts Payable 30,000 30,000 Wages Payable 6,000 6,000 C. Finley, Capital 33,000 33,000 C. Finley, Drawing 3,000 3,000 Fees Earned 141,000 141,000 Wages Expense 63,000 63,000 Rent Expense 18,000 18,000 Depreciation Expense 15,000 15,000 Totals 228,000 228,000 96,000 141,000 132,000 87,000 Net Income (Loss) 45,000 45,000 141,000 141,000 132,000 132,000 Based on the preceding trial balance, the entry to close C. Finley, Drawing would be: 1. debit C. Finley, Capital $3,000, credit C. Finley, Drawing $3,000 2. debit C. Finley, Drawing $3,000; credit C. Finley, Capital $3,000 3. debit C. Finley, Drawing $12,000; credit C. Finley, Capital $12,000 4. debit C. Finley, Capital $12,000, credit C. Finley, Drawing $12,000 Save Answer 30. Chapter 4Completing the Accounting Cycle Question TF #41 (Points: 3) A post-closing trial balance should be prepared before the financial statements are prepared. 1. False 2. True Save Answer 31. Chapter 5Accounting Systems Question MC #22 (Points: 3) Each individual entry in the Revenue Journal is posted to 1. the Accounts Receivable controlling account 2. the Revenue controlling account 3. the accounts receivable subsidiary ledger 4. the accounts receivable subsidiary ledger and the controlling account Save Answer 32. Chapter 5Accounting Systems Question MC #67 (Points: 3) The flow of data in a computerized accounting information system is 1. authorization, database, transaction, reports 2. transaction, database, authorization, reports 3. reports, transaction, authorization, database 4. authorization, transaction, database, reports Save Answer 33. Chapter 5Accounting Systems Question MC #16 (Points: 3) A purchase of supplies for cash is recorded in the 1. Cash Payments journal 2. Cash Receipts journal 3. Revenue journal 4. Purchases journal Save Answer 34. Chapter 5Accounting Systems Question MC #73 (Points: 3) Companies requesting quotes from vendors for the purchase of supplies is known as 1. reverse auction. 2. C2V. 3. shopping. 4. supply chain management. Save Answer 35. Chapter 5Accounting Systems Question TF #7 (Points: 3) Most accounting systems evolve as the business grows and requires changes in their methods for collecting, accumulating, and reporting information. 1. True 2. False Save