157) For a journal entry with only two lines, the following entry is valid Increase in Owners' Equity, Decrease in Expense. A) False B) True 158) The Statement of Cash Flows is a: A) Snapshot B) Video 159) The following table contains financial information for ABC before closing entries: Cash Common Stock Supplies Advertising Expense Accounts Payable Service Revenuc Salaries Expense Prepaid Rent Dividends Equipment S23,000 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? D) Six A) Three. B) Five. 160) For a journal entry with only two lines, the following entry is valid Increase in one revenue, Decrease in another revenue. B) True A) False 161) Separation of duties occurs when two or more people act in coordination to circumvent inter controls. B) Truc A) False 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 163) The ending Retained Eamin gs balance of ABC decreased by $1.0 million from the beginning of the year. The company declared a dividend of S5.4 million during the year What was the net income for the year? A) S6.4 million. B) 54.4 million C) S7.5 million. D) S1.0 million. 164) The Income Statement is a: A) Video B) Snapshot 165) For a journal entry with only two lines, the following entry is valid: Decrease in Revenue, Decrease in Dividends. A) True B) False l66) For a journal entry with only two lines, the following entry is valid: Decrease in Owners' Equity, Increase in Expensc. A) False B) True 167) When a company makes an end-of-period adjusting entry, which includes a debit to Supplies Expense, the usual credit entry is made to: A) Supplies. C) Cash. B) Retained Earnings. D) Accounts Payable. 168) ABC sold S500 in widgets to a customer on account on January 1. On January 11 ABC collected the cash from that customer. What is the impact on ABC's accounting equation from the collection of cash? A) Decrease assets and increase liabilities. C) No net effect to the accounting equation. B) Decrease assets and decrease liabilities D) Increase assets and increase liabilities. 169) After the 1st step in the Operating Cycle, the firm has? C) Cash B) Receivable A) Inventory 170) For a journal entry with only two lines, the following entry is valid: Increase in one Owners' Equity, Increase in a second Owners' Equity B) Faise A) True 171) The second step in the Operating Cycle is called? D) Sale C) Manufacture B) Collection A) Purchase 172) In the lecture, when there is a Purchase or Manufacture in the operating cycle, what happens to cash? D) Stays the Same C) Decreases B) Increases A) It depends 23 173) 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 174) If a company has stockholders' equity of s60,000 at the end of the year, which ofthe following statements must be true? A) The company has issued S60.000 of common stock B) Total revenues during the year equal S60,000 C) The company's assets exceed liabilities by S60.000. D) Net income for the year equals S60,000. 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 $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. How many of these transactions decreased ABC's total assets? A) Four B) One. D) Three. 176) The usual balance in a Contra-Liability account is a: B) DR 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 B) The amount of credit sales in the current year was greater than the amount of credit sales C) The amount of actual uncollectible accounts in the current year was greater than the estimate D) The amount of actual uncollectible accounts in the current year was less than the estimate of cash collections from customers in the prior year. made in the prior year. of uncollectible accounts made at the end of the prior year uncollectible accounts made at the end of the prior year A) 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. 178) Which statement below best describes the accounting equation? 24 179) The owner of an office build ing should report rent collected in advance as a debit to Cash and a credit to: A) Revenue C) An asset other than Cash B) A liability D) Stockholders' equity 1S0) For a jounal entry with only two lines, the following entry is valid Increase in Revenue, Increase in Dividends A) False B) True 181) For a journal entry with only two lines, the following entry is valid: Increase in Owners' Equity, Decrease in Dividend A) True B) False 182) The following table contains financial information for ABC before closing entries: Cash Supplies Prepaid Rent Salaries Expense Equipment Service Revenue Miscellaneous Expenses Dividends Accounts Payable Common Stock Retained Earnings $12,000 4.500 2,000 65,000 30,000 20,000 3,000 5,000 8,000 What is the amount of ABC's total assets? A) S83,500 B) $82,500. C) $68,500 D) $81.500. 183) For a journal entry with only two lines, the following entry is valid Decrease in Revenue, Increase in Expense. A) True 184) For a journal entry with only two lines, the following entry is valid: Increase in one Expense, Decrease in another Expense. B) False A) True 25 185) Which of the following is not a balance sheet item" 3) Assct D) Common stock C) Retained carnings 186) For a journal entry with only two lines, the following entry is valid Decrease in Expense, Decrease in Dividends A) True B) False 1S7) In the Allowance Method when we do the year end adjusting entry for Bad Debts A) Assets increase, Net Income increases. 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 1S8) 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 Revenue. B) True A) False 192) The following amounts are reported in the ledger of ABC: Assets Liabilities Retained Earnings 36,000 12,000 What is the balance in the Common Stock account? D) $42,000. C) S32,000 B) $48,000 A) $44,000 193) The adjusting entry required when amounts previously recorded as deferred revenues are carned B) A credit to an asset. D) A debit to an asset. by providing goods or services to customers includes A) A credit to a liabilty C) A debit to a liability 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 B) Tie A) False 195) Which statement is true? A) Some Income Statement accounts are Temporary and some B) All Income Statement accounts are Temporary C) All Income Statement accounts are Permanent are Permanent 196) Following are transactions of ABC, a new company, during the month of January: I. 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? ) $12,300. B) S15,500. C) S27,300 D) $22,60 197) 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? L. Total debits should equal total credits. 11. It is possible to have multiple debits or credits in one journal entry Ill. Assets are always listed first in journal entries IV. Some journal entries will have debits only. ebts o A) I, II, and IV B) II, IlI, and IV C) I only Dy I and Il. 199) Allocation is primarily as issue itn A) Both Measuring Assets and Income C) Measuring Assets B) Measuring Income D) None of the other three 27 or the past five years, ABC reported the following annual nect income and dividend amounts Year Net Income $22.000 17,000 9,000 14,000 25,000 Dividends $2.000 2000 1,000 3,000 4,000 If ABC had Retained Earnings of $88,000 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) S1,000. 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. B) False A) True 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 C) S4.5 million. D) $1.3 million A) S1.9 million. B) S3.2 million. 204) In Cash Flow reporting inventory is measured at A) It depends on the measuring system co so 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 n example of separation of duties would be not allowing an employee who receives cash to also responsible for depositing that cash in the bank account. A) True B) False