15

1. June 8, 2009 NoDirt entered into a one year contract to provide cleaning services to a customer. NoDirt will start providing the services onJuly 1, 2009. The customer paid NoDirt $4,500 cash when the contract was signed on June 8, 2009. The $4,500 is payment for the first three months of cleaning service.

   Account Name

   Debit

   Credit

   A.	Cash	4,500
   	Service Revenue		1,500
   	Prepaid Cleaning Service Receivable		3,000

   B.	Service Revenue	4,500
   	Cash		4,500

   C.	Unearned Service Revenue	4,500
   	Cash		4,500

   D.	Retained Earnings	4,500
   	Services Payable		4,500

   E. None of the above

   A

   B

   C

   D

   E

2 points

QUESTION 16

1. June 15, 2009 NoDirt performed $3,000 of cleaning services for a customer. The customer paid $500 cash on June 15 and will pay the remaining amount in the future.

   Account Name

   Debit

   Credit

   A.	Cash	500
   	Service Revenue		500

   B.	Cash	500
   	Accounts Receivable	2,500
   	Service Revenue		3,000

   C.	Service Revenue	500
   	Cash		500

   D.	Service Revenue	3,000
   	Cash		500
   	Accounts Receivable		2,500

   E. None of the above

   A

   B

   C

   D

   E

2 points

QUESTION 17

1. June 17, 2009 NoDirt paid for the supplies purchased on June 2, 2009.

   Account Name

   Debit

   Credit

   A.	Supplies Expense	5,000
   	Cash		5,000

   B.	Cash	5,000
   	Accounts Payable		5,000

   C.	Accounts Payable	5,000
   	Cash		5,000

   D.	Cash	5,000
   	Supplies Expense		5,000

   E.None of the above

   A

   B

   C

   D

   E

2 points

QUESTION 18

1. June 25, 2009 NoDirt received $2,000 from the customer billed on June 15, 2009.

   Account Name

   Debit

   Credit

   A.	Cash	2,000
   	Accounts Receivable		2,000

   B.	Service Revenue	2,000
   	Cash		2,000

   C.	Accounts Receivable	2,000
   	Cash		2,000

   D.	Cash	2,000
   	Service Revenue		2,000

   E. None of the above

   A

   B

   C

   D

   E

2 points

QUESTION 19

1. June 30, 2009 NoDirt paid $2,400 cash for a one-year maintenance coverage on their computer system. The maintenance coverage will start on July 1, 2009.

   Account Name

   Debit

   Credit

   A.	Cash	2,400
   	Prepaid Maintenance		2,400

   B.	Prepaid Maintenance	2,400
   	Cash		2,400

   C.	Accounts Receivable	2,400
   	Cash		2,400

   D. No entry is required E. None of the above

   A

   B

   C

   D

   E

2 points

QUESTION 20

1. June 30, 2009 NoDirt paid $1,500 in cash to the employees for work performed during the month of June.

   Account Name

   Debit

   Credit

   A.	Wages Expense	1,500
   	Wages Payable		1,500

   B.	Worker Wages Receivable	1,500
   	Wages Payable		1,500

   C.	Wages Expense	1,500
   	Cash		1,500

   D.	Cash	1,500
   	Wages Expense		1,500

   E. None of the above

   A

   B

   C

   D

   E

2 points

QUESTION 21

1. On April 1, 2009 Green Company received an advance payment of $60,000 from a customer. The payment was for five months of services Green would perform for the customer at the rate of $12,000 per month. Green started providing the service on April 1, 2009. On April 1, 2009 Green made an entry in its accounting systemdebiting Cash for $60,000andcrediting Unearned Service Revenue for $60,000. This is the only entry that has been made related to this transaction. Select the adjusting entry Green should make prior to preparing financial statements onApril 30, 2009.

   Account Name

   Debit

   Credit

   A.	Unearned Service Revenue	48,000
   	Service Revenue		48,000

   B.	Service Revenue	48,000
   	Unearned Service Revenue		48,000

   C.	Service Revenue	12,000
   	Unearned Service Revenue		12,000

   D.	Unearned Service Revenue	12,000
   	Service Revenue		12,000

   E. None of the above

   A

   B

   C

   D

   E

2 points

QUESTION 22

1. Using the information given in21.above select the adjusting entry Green should make prior to preparing financial statements onMay 31, 2009. Prior to this May 31, 2009 adjusting entry, Green has made only two entries in their accounting system related to this advance payment the April 1, 2009 entry to record the receipt of the $60,000 cash and the April 30, 2009 adjusting entry.

   Account Name

   Debit

   Credit

   A.	Unearned Service Revenue	36,000
   	Service Revenue		36,000

   B.	Service Revenue	36,000
   	Unearned Service Revenue		36,000

   C.	Service Revenue	12,000
   Unearned Service Revenue		12,000

   D.	Unearned Service Revenue	12,000
   	Service Revenue		12,000

   E. None of the above

   A

   B

   C

   D

   E

2 points

QUESTION 23

1. Using the information given in 21 above, and assuming that all the required adjusting entries have been correctly made - what should be the amount shown on Green'sJune 30, 2009Balance Sheet for Unearned Service Revenue?

   $60,000

   $48,000

   $36,000

   $0

   None of the above

2 points

QUESTION 24

1. Which of the following would not be shown on the Balance Sheet?

   Buildings

   Depreciation Expense

   Land

   Office Equipment

   All would be shown on the Balance Sheet

2 points

QUESTION 25

1. A transaction entered in the general journal must consist of

   only a single debit amount and a single credit amount.

   only two debits or two credits of equal dollar amount.

   only debit entries if liabilities and owners' equity are not affected.

   only credit entries if assets and expenses are not affected.

   none of the above

2 points

QUESTION 26

1. Which of the following statement(s) is/are true?

   Cost of Goods Sold is an Asset.

   Cost of Goods Sold is an Expense.

   Cost of Goods Sold starts each accounting period with a zero balance.

   Cost of Goods Sold increases Owners' Equity.

   Two of the above are true.

2 points

QUESTION 27

1. A Trial Balance:

   Shows all of the account balances from the General Journal.

   Shows only the account balances which will appear on the Balance Sheet.

   Shows that all the account balances in a company's accounting system are correct.

   Shows if the total dollar amount of the Debits equals the total dollar amount of the Credits for all of the account balances in the General Ledger.

   None of the above

2 points

QUESTION 28

1. Before closing the revenue and expense accounts for the month of June ABC Company's Retained Earnings Account had a $50,000 credit balance. ABC's Net Income for June was $20,000. ABC declared and paid a $5,000 dividend in June. The June beginning balance in ABC's Cash Account was $35,000 and the June ending balance in the Cash Account was $25,000. The Retained Earnings amount shown on ABC's June 30th Balance Sheet should be:

   $70,000

   $75,000

   $65,000

   $55,000

   None of the above

2 points

QUESTION 29

1. Which of the following statements about adjusting entries is true?

   Adjusting entries are only made to Income Statement accounts.

   An adjusting entry will always change the balance in the Cash account.

   An adjusting entry always changes the balance in an expense account.

   If an adjusting entry changes the balance in an asset account it will always change the balance in a revenue account.

   None of the above

2 points

QUESTION 30

1. The best place to look in a company's accounting system, if you wanted to see all of the accounts affected by a transaction, would be?

   The General Journal

   The General Ledger

   A Trial Balance

   The Chart of Accounts

   None of the above

2 points

QUESTION 31

1. If a journal entry that affects only two accounts increases an asset as one part of the entry, what might the other part of the entry do?

   Increase another asset account

   Increase an expense account

   Increase a liability account

   Decrease a revenue account

   None of the above

2 points

QUESTION 32

1. Which of the following is True?

   The Balance Sheet covers a period of time - the Income Statement reports on a point in time

   The Income Statement covers a period of time - the Balance Sheet reports on a point in time

   The Income Statement and the Balance Sheet cover a period of time

   The Income Statement and the Balance Sheet report on a point in time

   None of the above

2 points

QUESTION 33

1. Which of the following statements is True?

   The normal balance for the Cost of Goods Sold account is a Credit.

   The Retained Earnings account will always start the accounting period with a zero balance.

   When you Debit an expense account you can say that you increased the expense account and decreased owners' equity.

   The normal balance for the Retained Earnings account is a Debit.

   Retained Earnings is the amount of Cash available to pay a dividend.

2 points

QUESTION 34

1. If an adjusting entry to record interest, which is owed to a bank on a Note Payable, is not recorded at month-end, which of the following effects on the financial statements for the month will NOT occur?

   Total expenses will be understated on the income statement.

   Net income will be overstated.

   Liabilities on the balance sheet will be understated.

   Cash will be overstated.

   Retained Earnings will be overstated.

2 points

QUESTION 35

1. The Retained Earnings account of a company had a Credit balance before closing the Revenue and Expense accounts. After closing the Revenue and Expense accounts the Retained Earnings account had a Debit balance. The company did not declare or pay any dividends during this accounting period. Based on this information it can be determined that the company incurred a loss for the period.

   True

   False

   Not adequate facts to determine True or False