26 The assets and liabilities of the company are $128,000 and $84,000, respectively. Owner's equity should 27 3. equal 28 29 A. 44,000 30 B. 84,000 31 C. 128,000 32 D 212,000 33 39 A business paid $7,000 to a creditor in payment of an amount owed. The effect of the transaction on the 40 4. accounting equation was to 41 42 A. decrease an asset, decrease a liability 43 B. increase an asset, increase owner's equity 44 C. increase an asset, increase a liability 45 D. increase an asset, decrease another asset 46 52 If total liabilities decreased by $46,000 during a period of time and owner's equity increased by $60,000 during the same period, the amount and direction (increase or decrease) of the period's change in total 53 5. assets is 54 55 A. 14,000 increase 56 B. 106,000 decrease 57 C. 14,000 decrease 58 D. 106,000 increase 59 64 65 Questions 6 - 10 relate to CSO 1.2, 1.3, 1.4 66 Objective 1.2: Prepare two-column journal entries 67 Objective 1.3: Prepare and utilize t-accounts for journal entries and decision making 68 Objective 1.4: Prepare a trial balance in good form 69 70 6. Which of the following is true about T accounts? 71 72 A. The left side of a T account is called the credit side. 73 B. Transactions are first recorded in Taccounts and then posted to the journal. 74 C. The right side of a T account is called the debit side. 75 D. The left side of a T account is called the debit side. 76 77 78 7. The balance of an account is determined by 79 80 A. always subtracting the debits from the credits B. 81 adding all of the debits, adding all of the credits, and then subtracting the smaller sum from the larger sum 82 C. always subtracting the credits from the debits 83 D. adding all of the debits to all of the credits 84 588 86 8. The accounts in the ledger of Monroe Entertainment Co. are listed below. All accounts have normal balances. 87 88 89 90 91 Accounts payable Accounts receivable Prepaid insurance Cash Drawing 1,500 Fees earned 1,800 Insurance expense 2,000 Land 3,200 Wages expense 1,200 Capital 3,600 1,300 3,000 1,400 8,800 Total assets are A. B. C. D. 8,000 9,800 9,700 10,000 92 93 94 95 96 97 98 99 100 108 109 110 111 112 113 114 115 116 9. . Which of the following entries records the payment of an account payable? A. debit Accounts Receivable; credit Cash B. debit Accounts Payable; credit Cash C. debit Cash; credit Supplies Expense D debit Cash; credit Accounts Payable 117 10. The accounts in the ledger of Monroe Entertainment Co. are listed below. All accounts have normal balances. 118 119 Accounts Payable 1,500 Fees Earned 3,600 120 Accounts Receivable 1,800 Insurance Expense 1,300 121 Prepaid Insurance 2,000 Land 3,000 122 Cash 3,200 Wages Expense 1,400 123 Drawing 1,200 Capital 8,800 124 Find & Select 125 Prepare a trial balance. The total of the debits is 126 127 A. 11,200 128 B. 9,700 129 C. 12,700 D. 13,900 131 149 150 Questions 11 - 15 relate to CSO 1.5, 1.6 Objective 1.5: Identify the elements of the income statement, statement of owners' equity (retained earnings), and balance 151 sheet Objective 1.6: Prepare an income statement, statement of owner's equity (retained earnings), and balance sheet in good 152 form 153 130 When preparing the statement of owner's equity, the beginning capital balance can always be found 154 11. 155 156 157 158 159 A. in the statement of cash flows B. in the Balance Sheet columns of the work sheet C. in the general ledger D. in the Income Statement columns of the work sheet 12. Accumulated Depreciation appears on the A. balance sheet in the property, plant, and equipment section B. income statement as an operating expense C. balance sheet in the long-term liabilities section D. balance sheet in the current assets section 13. The first item appearing on the statement of retained earnings is A. the ending balance of retained earnings B. the beginning balance of retained earnings C. owner withdrawals D. net income For problems 14. and 15., refer to the following information related to Stockton Company. Stockton Company Adjusted Trial Balance December 31, 20X2 6,530 2,100 700 13,700 161 162 163 164 165 166 167 168 169 170 171 172 173 174 175 176 177 178 179 180 181 182 183 184 185 186 187 188 189 190 191 192 193 194 195 196 197 198 199 200 201 202 203 204 205 206 207 218 219 220 221 222 223 224 1,100 1,900 4,300 12,940 Cash Accounts Receivable Prepaid Expenses Equipment Accumulated Depreciation Accounts Payable Notes Payable Bob Steely, Capital Bob Steely, Withdrawals Fees Earned Wages Expense Rent Expense Utilities Expense Depreciation Expense Miscellaneous Expense Totals 790 9,250 2,500 1,960 775 250 185 29,490 29,490 14. Determine the net income (loss) for the period. A. net loss $790 B. net income $3,580 c. net loss $5,670 D. net income $9,250 15. Determine the owner's equity ending balance. A. B. C. D. 15,730 21,400 6,480 12,150 233 Questions 16 - 20 relate to CSO 2.1 234 Objective 2.1: Calculate and prepare journal entries for inventory purchases and sales for merchandising 235 236 16. Gross profit is equal to 237 238 A. sales plus selling expenses 239 B. sales less cost of merchandise sold 240 c. sales less selling expenses 241 D. sales plus cost of merchandise sold 242 243 244 17. Calculate the gross profit for Jefferson Company based on the following: 245 246 Sales 764,000 247 Selling Expenses 42,500 248 Cost of Merchandise Sold 538,000 249 250 A. 183,500 251 B. 226,000 252 c. 721,500 253 D. 495,500 254 255 Merchandise with a sales price of $5,000 is sold on account with terms 2/10, n/30. Using the net method, 256 18. the journal entry to record the sale would include a 257 258 A. debit to Sales Discounts for $100 259 B. debit to Accounts Receivable for $4,880 260 c. credit to Sales for $4,900 261 D. debit to Cash for $5,000 262 266 267 19. When a buyer returns merchandise purchased for cash, the buyer will record the transaction as a 268 269 A. Dr. Cash 270 Cr. Merchandise Inventory 271 B. Dr. Sales 272 Cr. Accounts Payable 273 C. Dr. Cash 274 Cr. Sales 275 D. Dr. Merchandise Inventory 276 Cr. Cash 277 278 A sales invoice included the following information: merchandise price, $12,000; terms 1/10, n/30, FOB shipping point with prepaid freight of $900 added to the invoice. Assuming that a credit for merchandise returned of $500 is granted prior to payment and that the invoice is paid within the discount period, what is 279 20. the amount of cash that should be received by the seller? 280 281 A. 11,500 282 B. 11,385 283 C. 10,480 284 D. 12,285 285 uo