185) Which of the following is not a balance sheet item? A) Revenues C) Retained canings B) Assets. D) Common stock 1S6) For a journal entry with only two lines, the following entry is valid Decrease in Expense, Decrease in Dividends A) True B) False 187) 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 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 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) S42,000. 193) The adjusting entry required when amounts previously recorded as deferred revenues are earned 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) Te 195) Which statement is true? A) Some Incom B)All Income Statement accounts are Temporary C) All Income Statement accounts are Permanent e Statement accounts are Temporary and some are Permanent 196) Following are transactions of ABC, a new company, during the month of January l. Issued 10,000 shares of common stock for S15.000 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 5. Purchased S300 of office supplies on account. 6. Paid employees $10.000 for their first month's salaries. provided to customers during the month What was the total amount of ABC's liabilities following these six transactions? A) S12,300. B) S15,500. C) S27.300. D) S22.600 197) 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 equal total credits. I1. It is possible to have multiple debits or credits in one journal entry III. Assets are always listed first in journal entriesn, ebt IV. Some journal entries will have debits only. eve A) 1, 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 D) None of the other three 27 200) For the past five years, ABC reported the following annual net income and divid Net Income $22,000 17.000 9,000 14,000 25,000 Dividends $2.000 2,000 1,000 Year 4,000 If ABC had Retained Earnings of $88,000 at the end of year 5, what was the company's Retained Eamings at the beginning of Year 1? A) $13,000. B) $7,000 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 S1.3 million during the year. What was the net income carned during the ycar? B) S3.2 million. C) S4.5 million D) S1.3 million A) S1.9 million. 204) In Cash Flow reporting inventory is measured at B) Sacrifice Value D) Benefit Value depends on the measuring system 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. B) False A) True 28 one 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 Eamings Utilities Expense $4.400 12.800 1,700 2.400 8,300 4,300 1,100 5,000 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? B) Four. C) Five. D) Two. A) Three. 209) The Income Statement is a B) Video A) Snapshot 210) For a journal entry with only two lines, the following entry is valid: Decrease in an asset, Increase in Dividends A) False 211) After the 3rd step in the Operating Cycle, the firm has? B) Cash C) Receivable A) Inventory 212) For a journal entry with only two lines, the following entry is valid: Increase in Owners' Equity, Increase in Expense. B) True A) False 29