131) For a jourmal entry with only two lines, the following entry is valid Increase in Owners' Equity, Increase in Dividends. A) False B) True 132) For a jourmal entry with only two lines, the following entry is valid: Increase in an asset, Decrease in a Owners' Equity A) False B) True ch of the following are made BEFORE a Trial Balance is prepared? A) Closing Entries B) Adjusting Entrics Transaction Entries 134) Which of the following is a balance sheet item? A) Net Income. C) Utilities Expense. B) Cash. D) Dividends. 135) For a journal entry with only two lines, the following entry is valid: Increase in a liability, Decrease in Dividends. A) True B) False 136) For a journal entry with only two lines, the following entry is valid: Decrease in an asset, Increase in an Expense. A) True B) False 137) On September 30. ABC Co. paid employee salaries of $7.000, including S1,000 it owed to its employees last month. What are the effects of this transaction on the accounting equation? Expenses increased, liabilities increased, and assets increased. ssets decreased, liabilities decreased, and expenses increased Expenses decreased, liabilities decreased, and assets decreased. D) Assets decreased, expenses decreased, and liabilities increased E) Assets increased, expenses increased, and liabilitics decreased. 138) For a journal entry with only two lines, the following entry is valid Increase in Revenue, Decrease in Dividends. A) True B) False 139) A company provides services on account. Indicate how this transaction would affect (1) ass stockholders' cquity, and (3) revenues. A) (I) No effect, (2) No effect (3) No effect C) (1) No effect, (2) Increase (3) Increase B (1) Increase, (2) Increase (3) Incre D) (1) Increase, (2) No effect (3) Incr 19 149) Assume that cash is paid for rent to cover the next year. The appropriate debit and credit are: A) Debit Rent Expense, credit Cash C) Debit Cash, credit Prepaid Rent B) Debit Prepaid Rent, credit Rent Expense D) Debit Prepaid Rent, credit Cash. 150) On January 1, ABC started the year with a $492,000 balance in Retained Earnings and a $605.000 in Common Stock. During the year, the company reported net income of $92.000. paid a dividend of S1S,200, and issued more common stock for $27,500. What is total stockholders equity at the end of the year? A) S1,201.300. B) S1,588,300 C) S1,097,000. D) $1,231,700 151) For a jourmal entry with only two lines, the following entry is valid: Increase in an asset, Decrease in a liability A) True B) False 152) Which of the following has the single grea A) Total dividends. B) Net income. test impact on stock prices? C) Total revenues. D) Total assets. 153) At the beginning of December, ABC had $2,000 in supplies on hand. During the month, supplies purchased amounted to $3,000, but by the end of the month the supplies balance was only $800. What is the appropriate month-end adjusting entry plies S4,200, credit Supplies Expense $4,200 A) Debit Sup B) Debit Cash $800, credit Supplies $800. C) Debit Supplies Expense $4,200, credit Supplies $4.200. D) Debit Cash $4,200, credit Supplies $4,200 54) Receiving a utility bill for costs in the current period but delaying payment until the following period is an example of a(n) A) Deferred revenue. C) Accrued revenue. B) Prepaid expense. D) Accrued expense. 155) The usual balance in a Contra-Expense account is a: A) It depends B) DR ) CR 156) Consider the following transactions: Issued common stock for cash. Purchased equipment by signing a note payable Provided services to customers on account. Collected cash from customers on account. How many of these four transactions increased the giveyr company's total liabilities? A) Four B) Three. D) Two. 21 157) For aiournal entry with only two lines, the following entry is valid Increase yn Owners' Equity, Decrease in Expense. A)F B) True ss) Th Statement of Cash Flows is a: A) Snapshot B) Video 150) The following table contains financial information for ABC before closing entries: Cash Common Stock Supplies Advertising Expense Accounts Payable Service Revenue Salaries Expense Prepaid Rent Dividends Equipment $23,000 34.000 4,000 2,000 20,000 30,000 3,000 4,000 3,000 45,000 How many of the above accounts are permanent? A) Three. B) Five. C) Four D) Six 160) For a journal entry with only two lines, the following entry is valid: Increase in one revenue, Decrease in another revenuc. A) False B) True 161) Separation of duties occurs when two or more people act in coordination to circumvent internal controls. A) False B) True 162) The Trueblood Criterion is used by A) Managers when reporting to the public B) Internal Management reports (Managerial Accounting) C) Accountants D) Managers when reporting to the IRS 173) If a company records cash received for services to be provided in the future with a debit to Cash and a credit to Service Revenue, how will this error affect total assets for the current period A) Not possible to determine. C) Total assets will be too low. B) Total assets will be correct. D) Total assets will be too high 74) If a company has stockholders' equity of $60,000 at the end of the year, which of the following statements must be true? A) The company has issued S60,000 of common stock. B) Total revenues during the year equal $60,000. C) The company's assets exceed liabilities by $60,000. D) Net income for the year equals $60,000. 175) Following are transactions of ABC, a new company, during the month of January: 1. Issued 10,000 shares of common stock for $15,000 cash. 2. Purchased land for S12.000, signing a note payable for the full amount. 3. Purchased office equipment for S1.200 cash 4. Received cash of $14,000 for services provided to customers during the month. 5. Purchased S300 of office supplies on account 6. Paid employees $10,000 for their first month's salaries. How many of these transactions decreased ABC's total assets? B) One. C) Two. D) Three. A) Four t is a: 176) The usual balance in a Contra-Liabilit C) It depends A) CR 177) Prior to year-end adjusting entries, what would explain the Allowance for Uncollectible Accounts having a debit balance? A) The amount of cash collections from customers in the current year was less the amount of cash collections from customers in the prior year B) The amount of credit sales in the current year was greater than the amount of credit sales made in the prior year C) The amount of actual uncollectible accounts in the current year was greater than the estimat of uncollectible accounts made at the end of the prior y D) The amount of actual uncollectible accounts in the current year was less than the estimate o ear uncollectible accounts made at the end of the prior year 178) Which statement below best describes the accounting equation? Resources of the company equal creditors' and owners' claims to those resources B)The change in retained carnings equals net income less dividends. C) Equality of revenue and expense transactions over time. D) Financing activities equal investing and operating activities. 24 185) Which of the following is not a balance sheet item? A) Revenues. C) Retained carnings. B) Assets. D) Common stock. 186) For a journal entry with only two lines, the following entry is valid Decrease in Expense, Decrease in Dividends. A) Truc B) False 187) In the Allowance Method when we do the year end adjusting entry for Bad Debts A) Assets increase, Net Income incrcases. B) Assets stay the same, Net Income stays the same. C) Assets decrease, Net Income decreases D) It depends on the balance in the Allowance account before we make the entry 188) The third step in the Operating Cycle is called? A) Manufacture B) Sale C) Collection D) Purchase 189) For a journal entry with only two lines, the following entry is valid: Increase in an asset, Decrease in Revenue. A) False B) True 190) Prepaid Rent is what kind of account? A) Revenue B) Asset C) Expense D) Liability 191) For a journal entry with only two lines, the following entry is valid: Increase in Owners' Equity, Decrease in Revenuc. A) False B) True 192) The following amounts are reported in the ledger of ABC Assets Liabilities Retained Earnings $80,000 36,000 12,000 What is the balance in the Common Stock account? A) $44,000. B) $48,000 C) $32,000 D) $42,000 193) The adjusting entry required when amounts previously recorded as deferred revenues are e by providing goods or services to customers includes: A) A credit to a liability C) A debit to a liability B) A credit to an asset. D) A debit to an asset. 26 194) For a journal entry with only two lines, the following entry is valid Decrease in one Liability, Decrease in a second second liability A) False B) True 195) Which statement is true? A) Some Income Statement accounts are Temporary and some are Permanent JA' Income Statement accounts are Temporary C) All Income Statement accounts are Permanent 196) Following are transactions of ABC, a new company, during the month of January: 1. Issued 10,000 shares of common stock for $15.000 cash. 2. Purchased land for $12,000, signing a note payable for the full amount. 3. Purchased office equipment for $1,200 cash 4. Received cash of $14,000 for services provided to customers during the month 5. Purchased $300 of office supplies on account. 6. Paid employees $10,000 for their first month's salaries. What was the total amount of ABC's liabilities following these six transactions? A) S12,300. B) S15,500. C) $27,300 D) $22,600 197) Choose one A) Articulation has to do only with numbers on one statment in multiple years B) Articulation has to do only with numbers on one statment in one year C) Articulation has to do only with multiple statemtns in one year D) Articulation has to do with numbers on multiple statements in multiple years 198) The following statements pertain to recording transactions. Which of them are true? I. Total debits should cqual total credits I1. It is possible to have multiple debits or credits in one journal entry III Assets are always listed first in journal entriesebts IV. Some journal entries will have debits only. A) I, II, and IV B) II, III, and IV C)I only D) I and II 199) Allocation is primarily as issue in A) Both Measuring Assets and Income C) Measuring Assets 3) Measuring Income 200) For the past five years, ABC reported the following annual net incom e and e and dividend amounts: Year Net Income 17.000 9,000 14.000 25,000 Dividends $2,000 2,000 1,000 3,000 4.000 ABC had Retained Earnings of S88,000 at the end of year 5, what was the company's Retained Earnings at the beginning of Year 1? A) S13.000. B) S7,000. C) $1,000 D) $25,000 201) The primary focus for financial accounting information is to provide information useful for: A) Investment decisions and credit decisions. B) Credit decisions but not investment decisions C) Investment decisions but not credit decisions. D) Neither investment decisions nor credit decisions 202) For a journal entry with only two lines, the following entry is valid: Decrease in Owners' Equity, Decrease in Dividends A) True B) Falsc 203) The ending Retained Earnings balance of ABC increased by $3.2 million from the beginning of the year. The company declared a dividend of $1.3 million during the year. What was the net income carned during the year? A) S1.9 million. B) S3.2 million C) S4.5 million. D) S1.3 million. 204) In Cash Flow reporting inventory is measured at A) It depends on the measuring system B) Sacrifice Value D) Benefit Value 205) Usually we pick up Income at: A) Collection of a Receivable B) Acquisition of Inventory C) Point of Sale 206) An example of separation of duties would be not allowing an employee who receives cash to also be responsible for depositing that cash in the bank account. A) True B) False 28 207) Consider the following account balances of ABC at the end of the year: Accounts Payable Salaries Expense Cash Common Stock Service Revenue Supplies Retained Earnings Utilities Expense $4.400 12,800 1,700 2,400 8,300 4,300 1.100 How many of these accounts would appear in ABC's year-end Income Statement? A) Four B) Two. C) Five. D) Three. 208) Consider the following list of accounts: Accounts Payable Cash Prepaid Rent Common Stock Salaries Payable Equipment Supplies Rent Expense How many of these accounts have a normal credit balance? A) Three. B) Four C) Five. D) Two. 209) The Income Statement is a: B) Vidco 210) For a journal entry with only two lines, the following entry is valid Decrease in an asset, Increase in Dividends. A) False B) True 211) After the 3rd step in the Operating Cyele, the firm has? A) Inventory B) Cash C) Receivable 212) For a journal entry with only two lines, the following entry is valid: Increase in Owners' Equity, Increase in Expense. A) False B) True 29 246) Which of the following are made AFTER the financial statements are prepared? A) Transaction Entries B) glosing Entries C) Adjusting Entries 247) Which of the following is NOT possible for a business transaction? A) Decrease assets and increase expense C) Decrease liabilities and increase revenue. B) Increase liabilities and increase expen D) Increase assets and decrease revenue. 248) ABC had a net income of $8,000. S5,000, S12,000, and $10,000 over the first four years of the the average annual amount of dividends paid over the last four years i company's existence. If S3.000, what is the ending retained earnings balance? A) $35,000 B) S23,000. C) S7,000 D) S47,000 249) Consider the following transactions: Issued common stock for cash. Purchased equipment by signing a note payable. Provided services to customers on account. Collected cash from customers on account. How man of these four transactions incrcased the given company's total liabilities? A Two C) Four D) Three. B) One. 250) Choose one: A) The Statement of Cash Flows always balances B) The Statement of Cash Flows never balances C) It is possible for Balance in Cash on the Statement of Cash Flows to be zero 34