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1) Which of the following has no effect on Owner's Equity? a) Owner's withdrawal b) Collection of past due Accounts Receivable c) Performance of a service d) Owner's investments in assets of the business other than cash 2) When we receive cash in advance of painting a house, we a) Debit Cash and credit Painting Revenue b) Debit Unearned Painting Revenue and credit Cash c) Debit Cash and credit Unearned Painting Revenue 3) ABC Company has a weekly payroll of $65,000 for a five-day work week ending Friday. The company's fiscal year ends on Tuesday December 31, 20xx. The entry to record the Transaction of Friday January 3, 20x1 would be: a) Debit Salaries Expense $26,000, credit Salaries Payable $26,000 b) Debit Salaries Payable $26,000, credit Salaries Expense $26,000 c) Debit Salaries Expense $65,000, credit Salaries Payable $65,000 d) Debit Salaries Expense $39,000, debit Salaries Payable $26,000, credit Cash $65,000 4) Comparison of the Balance Sheet of Company A at the end of year 2 with its Balance Sheet At the end of year 1 shows that Assets had decreased by $12,300 and that the Liabilities had increased by $7000. The change in Owner's Equity during the past year is: a) An increase of $19,300 b) A decrease of $19,300 c) An increase of $6,300 d) A decrease of $6,300 5) Which of the following accounts would be closed at the end of the fiscal year? a) Accumulated Depreciation b) Unearned Service Fees c) Salaries Payable d) Salaries Expense 6) Which of the following statements is false? a) To increase Accounts Receivable, we credit Accounts Receivable b) Income Summary is always closed by debiting its balance and by crediting Capital c) Collection of a past due Accounts Receivable results in an increase to Revenue d) Each of the above statements is false Page 2: 7) Which of the following is not true about accounting journals? a) They are records of original entry b) They reflect the entire effect of a transaction in one place c) Amounts are posted from the ledger to the journal d) Transactions are recorded in chronological order 8) The Post Closing Trial Balance would not include which of the following accounts? a) Unearned Legal Fees b) Withdrawals c) Capital d) Accumulated Depreciation 9) On January 1, 20x1, Smith Company pays $6,000 in advance for rent for the next five Months. Assume Smith's fiscal year ends on March 31, 20x1. The balance in the Prepaid Rent account as of March 31, 20x1 would be: a) $2,400 credit b) $2,400 debit c) $3,600 credit d) $3,600 debit 10) The purchase of land for cash a) Increases both Assets and Owner's Equity b) Decreases both Assets and Owner's Equity c) Leaves total Assets unchanged d) Increases Assets and decreases Liability PART II: True or False (2 points each - 10 points total - all answers on the Answer Sheet ONLY):): 11) Adjusting entries are not necessary if the Trial Balance Debit and Credit columns are in balance. 12) Accumulated Depreciation is a contra assets account that appears on the Balance Sheet. 13) A Notes Payable represents an oral promise to pay a fixed amount of money at a specific future date with or without a provision for interest. 14) Every adjusting entry affects an Income Statement account and a Balance Sheet account. 15) The purchase of store equipment on account reduces the Owner's Equity by an equal amount