1) The following information is needed to reconcile the cash balance for Discount Dry Cleaning Company 1) * * - A deposit of $5600 is in transit. Outstanding checks total $1400. The book balance is $6000 at February 28, 2019. The bookkeeper recorded a $1600 check as $17.400 in payment of the current month's rent. The bank balance at February 28, 2019 was $17,130. A deposit of $300 was credited by the bank for $3000. A customer's check for $3100 was returned for nonsufficient funds. The bank service charge is $70. * What was the adjusted book balance? A) $17,200 B) $18,630 C) $18,770 D) $18,700 2) The data of Graham Brothers Company for two years are given below. Cash and cash equivalents Total current liabilities 2018 $5300 24,000 2019 $12,000 31,000 Based on the above information, which of the following statements is TRUE? A) Cash ratio has increased from 0.387 in 2018 to 0.221 in 2019. B) Cash ratio has increased from 0.02 in 2018 to 0.03 in 2019. C) Cash ratio has increased from 0.05 in 2018 to 0.08 in 2019. D) Cash ratio has increased from 0.221 in 2018 to 0.387 in 2019. 3) 3) A company received a bank statement showing a balance of $76,000. Reconciling items included outstanding checks of $2000 and a deposit in transit of $9100. What is the company's adjusted bank balance? A) $68,900 B) $64,900 C) $66,900 D) $83,100 100 und the check hook balance is $2,001. 4) The sole proprietor is personally liable for the liabilities of the business b) A sole proprietorship does not terminate at the choice or death of the owner. 5) 30 years ago, Star Grocer Corporation had purchased a building for its grocery store by paying $30,000. Based on inflation estimates, the amount of the building has been adjusted in the accounting records. The building is now reported at $75,000 in the financial statements of Star Grocer. Which of the following concepts or principles of accounting is being violated A) going concern assumption B) economic entity assumption C) monetary unit assumption D) cost principle ) - 6) Martin Supply Service paid $350 cash to a materials supplier that it owed from the previous month. Which of the following accounts decreases? A) Owner's Capital B) Accounts Receivable C) Office Supplies D) Accounts Payable 7) 7) David has decided to open an auto-detailing business He will pick up an automobile from the client, take it to his parents' garage, detail it and return it to the client. If he does all of the work himself and takes no legal steps to form a special organization, which type of business organization, in effect, has he chosen? A) Sole proprietorship B) Corporation C) Limited liability company D) Partnership
