1)

March	10	Accounts Payable		3,300
		Cash			3,300
		Paid creditors on account

What effect does this journal entry have on the accounts?

	a.	Decrease accounts payable, increase cash
	b.	Increase accounts payable, increase cash
	c.	Increase cash, decrease accounts payable
	d.	Decrease accounts payable, decrease cash

2)

The following adjusting journal entry was found on page 4 of the journal. Select the best explanation for the entry.

Wages Expense	2,150
Wages Payable		2,150
????????????????

a.

Record wages paid in advance

b.

Record the payment of wages

c.

Record wages expense incurred and to be paid next month

d) Record wages to be paid this month

3)

Use the following information for #20.

1.	$7,000 of merchandise inventory was ordered on September 2, 2009
2.	$3,000 of this merchandise was received on September 5, 2009
3.	On September 6, 2009, an invoice dated September 4, 2009, with terms of 3/10, net 30 for $3,250 which included a $250 prepaid freight cost, was received.
4.	On September 10, 2009, $800 of the merchandise was returned to the seller.

Based on the above information, what would be the cash payment if the company decides to pay the invoice on September 30, 2009?

	a.	$3,250
	b.	$3,000
	c.	$2,450
	d.	$2,384

4)

The inventory data for an item for September are:

Sep. 1	Inventory	20 units at $19
4	Sold	10 units
10	Purchased	30 units at $20
17	Sold	20 units
30	Purchased	10 units at $21

Using the perpetual system, costing by the last-in, first-out method, what is the cost of the merchandise sold for September?

	a.	$580
	b.	$590
	c.	$600
	d.	$610

5)

Use the following information to answer Questions 22. The Boxwood Company sells blankets for $60 each. The following was taken from the inventory records during May.

Date	Product Z	Units	Cost
May 3	Purchase	5	$30
May 10	Sale	3
May 17	Purchase	10	$34
May 20	Sale	6
May 23	Sale	3
May 30	Purchase	10	$40

Assuming that the company uses the perpetual inventory system, determine the ending inventory for the month of May using the average inventory cost method.

	a.	$450
	b.	$452
	c.	$500
	d.	$502

6)

Paper Company receives a $6,000, 3-month, 6% promissory note from Dame Company in settlement of an open accounts receivable. What entry will Paper Company make upon receiving the note?

a.

Notes Receivable 6,000 Interest Revenue 90 Accounts ReceivableDame Company 6,000 Interest Receivable 90

b.

Notes Receivable 6,000 Accounts ReceivableDame Company 6,000

c.

Notes Receivable 6,090 Accounts ReceivableDame Company 6,000 Interest Revenue 90

d.. Notes Receivable 6,090 Accounts ReceivableDame Company 6,090

7)

Grayson Bank agrees to lend the Trust Company $100,000 on January 1. Trust Company signs a $100,000, 8%, 9-month note. The entry made by Trust Company on January 1 to record the proceeds and issuance of the note is

	a.	Notes Payable 100,000 Interest Payable 6,000 Cash 100,000 Interest Expense 6,000
	b.	Cash 108,000 Interest Expense 8,000 Notes Payable 108,000
	c.	Interest Expense 8,000 Cash 92,000 Notes Payable 100,000
	d.	Cash 100,000 Notes Payable 100,000

8)

Alma Corp. issues 1,000 shares of $10 par value common stock at $16 per share. When the transaction is recorded, credits are made to:

	a.	Common Stock $10,000 and Paid-in Capital in Excess of Par Value $6,000.
	b.	Common Stock $10,000 and Retained Earnings $6,000.
	c.	Common Stock $10,000 and Paid-in Capital in Excess of Stated Value $6,000.
	d.	Common Stock $16,000.