1.At the beginning of 2010, the Stevens Co. had a balance of $100,000 in Retained Earnings.During 2010 the company paid a dividend of $1,000 and had net income of $12,000.What should be the balance in Retained Earnings on 12/31/10?

A. $100,000.B. $99,000C. $111,000D. $113,000

2. Under which of the following revenue recognition models records would your record revenue after cash has been collected?

A. Completion of Production

B. Percentage of completion

C. Installment method

D. Traditional (most common) Revenue Recognition principle

3.Which of the following expenses are usually reported using the "rational and systematic allocation" approach?

A. Cost of Goods SoldB.Interest ExpenseC.Warranty Expense

4. Which of the following is the correct journal entry for billing a customer on account for services provided of $1,000?

A.Debit Cash and credit Service Revenue 1,000

B.Debit Accounts Receivable and credit Cash 1,000

C.Debit Accounts Receivable and credit Service Revenue 1,000

D.Debit Accounts Receivable and credit Unearned Service Revenue 1,000

5.Which of the following is the correct journal entry for receiving cash payments from the customer previously billed in question 4?

A.Debit Accounts Payable and credit Cash

B.Debit Cash and credit Accounts Receivable

C.Debit Cash and credit Service Revenue

D.Debit Accounts Receivable and credit Cash

6.Johnson's Restaurant Co. currently records full cost of the office supplies as an expense at time of purchase rather than recording the amount of supplies used as an expense at year end.Which of the following terms justifies that policy?

A. ImmaterialityB.Measurement/Historical costC. Periodicity

7.If the going concern assumption were violated (company expected to fail), at what amount should the company report its equipment?

A.Original costB. Net realizable valueC. Book value

8.On January 10, the ABC Co. received a $6,000 deposit from a customer for work to be done in February.On the January 31^stfinancial statements, how should the company report this matter?

A. $6,000 revenueB. $6,000 liabilityC. $6,000 prepaid expense

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For each of the following four transactions, enter

A.it increases total assets and stockholders' equity

B.it increases total assets but not stockholders' equity

C.it decreases total assets and stockholders' equity

D.it decreases total assets but not stockholders' equity

E.none of these descriptions apply.

Note this is not amatchingquestion.You can select the same letter more than once.It may help you to prepare journal entry for each transaction.

9.The company provided services and billed a customer

10.The company paid wages of $2,000.

11.The company collected $500 on account from a customer

12.The company purchased equipment on credit.

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13.A company paid for 12 months of internet services for $800 on October 1.They recorded the transaction by debiting Prepaid Internet Service and crediting cash.Which of the following adjusting journal entries, recorded onDecember 31, is correct?

A.Debit internet expense $200 and credit prepaid internet service $200.

B.Debit prepaid internet service $200 and credit internet expense $200.

C.Debit prepaid internet service $600 and credit internet expense $600

D.Debit internet expense $200 and credit cash $200.

E.None of the above.

14.Note that this problem is similar to the question above, butisnot the same.A company paid for 12 months of internet services for $800 on October 1.They recorded the transaction by debitingInternet Expense800 and crediting Cash 800.Which of the following adjusting journal entries, recorded onDecember 31, is correct?

A.Debit internet expense $200 and credit prepaid internet service 200.

B.Debit prepaid internet service $200 and credit internet expense 200.

C.Debit prepaid internet service $600 and credit internet expense 600

D.Debit internet expense $200 and credit cash 200.

E.None of the above.

15.On November 14, 2010, the Johnson Co. received $1200 in advance from a customer, for a contract that requires Johnson Co. to provide services later.At that time, the company debited Cash 1200 and credited Unearned Service Revenue 1200.By December 31, 2010, one fourth of the service under contract had been provided.Which of the following adjusting journal entries is required?

A.Debit Unearned Service Revenue 300 and credit Services Revenue 300.

B.Debit Services Revenue 300 and credit Unearned Services Revenue 300.

C.Debit Unearned Services Revenue 300 and credit Cash 300.

D.Debit Unearned Services Revenue 900 and credit Services Revenue 900.

16.Which of the following describes the typical result of closing journal entries?

A.Cost-of-goods sold will have a zero balance.

B.Wages Payable will have a zero balance.

C.Accounts receivable will have a zero balance.

D.All of the above

17. Which of the following is the correct sequence for the process of creating a Statement of Financial Accounting Standard?

A.Hearing, Preliminary View, Exposure Draft

B.Preliminary View, hearing, Exposure Draft

C.Hearing, Exposure Draft, Preliminary View

D.Exposure Draft, hearing, Preliminary View

18.Which of the following is required as a result of the Sarbanes-Oxley Act?

A.Audit firms are required to rotate every five years.

B.The FASB is responsible for creating auditing standards.

C.CEOs and CFOs should personally certify that financial statements are accurate and complete.

19. GAAP SOURCE: Which of the following has become the official source for all financial accounting standards?

A.FASB Statements on Financial Accounting Standards

B.FASB Accounting Standards Codification

C.SEC Accounting Bulletins

D.AICPA Audit and Accounting Guides

20. What are the two fundamental qualities for accounting information to be decision useful?

A.Relevance and faithful representation

B.Comparability and verifiability

C.Timeliness and understandability