1) Chelsea started his business by investing $30,000. This would? a) increase assets and increase owners equity b) increase assets and increase liabilities c) increase one asset and decrease another asset d) decrease assets and decrease liabilities 2) During the month of February, Ashley Services had cash receipts of $7,500 and cash disbursements of $8,600. The February 28 cash balance was $1,800. What was the February 1 beginning cash balance? A) $700 C) $2,900 E) $4,300 B) $1,100 D) $0 I 3) Riley purchased office equipment on account. This transaction would? a) increase assets and increase owners equity b) increase assets and increase liabilities c) increase one asset and decrease another d) decrease assets and liabilities 4) The standard T account includes all of the following EXCEPT? a) a credit side c) a title b) a debit side d) the current date Focus 5) An example of an expense is? a) prepaid insurance b) advertising c) accounts payable d) withdrawals by the owner 6) Mufrat paid $1,200 for rent. This transaction would? a) increase assets & decrease owner's equity b) increase assets & increase liabilities c) decrease assets & decrease liabilities d) decrease assets & decrease owner's equity 7) A chart of accounts does NOT include a) assets c) owners equity b) liabilities d) names of customers 8) The accounts in the chart of accounts are arranged in? a) alphabetical order c) date order b) numerical order d) any order 9) The posting reference column of the journal provides a cross reference between? a) ledger and accounts c) ledger and financial statement b) journal and ledger d) there is no cross reference 10) The item column in the general ledger is used for? a) account titles c) a description of the entry b) the balance of the account d) footings 11) If the credit balance of the Allowance for Doubtful Accounts account exceeds the amount of a bad debt being written off, the entry to record the write-off against the allowance account results in: A) An increase in the expenses of the current period. B) An increase in current assets. C) A reduction in equity. D) No effect on the expenses of the current period. E) A reduction in current liabilities. 12) A method of estimating bad debts expense that involves a detailed examination of outstanding accounts and the length of time past due is the: A) Direct write-off method. B) Aging of accounts receivable method. C) Percentage of sales method. D) Aging of investments method. E) Percent of accounts receivable method. 13) Goodlad Company makes a $60,000, 60-day, 12% cash loan to Ryan Co. The note and interest to be collected at maturity is: (Use 360 days a year.) A) $60,000. B) $1.200 E) $67,200 C) $61,200 D) $58.800 14) Cost of goods sold: A) Is another term for merchandise sales. B) Is the term used for the expense of buying and preparing merchandise for sale. C) Is another term for revenue. D) Is also called gross margin. E) Is a term only used by service firms. 15) Perdomo Company is a wholesaler that buys merchandise in large quantities. Its supplier's catalog indicates a list price of $500 per unit on merchandise Perdomo intends to purchase, and offers a 30% trade discount for large quantity purchases. The Eost of shipping for the merchandise is $7 per unit. Perdomo's total purchase price per unit will be: A) $507. B) $350. C) $357 D) $343. E) $493
