6. Which of the following is the proper order to list current assets on the balance sheet? a. Cash, inventory, accounts receivable, temporary investments b. Cash, accounts receivable, inventory, prepaid expenses Cash, accounts receivable, temporary investments, inventory d. Cash, temporary investments, prepaid expenses, accounts receivable 7. An accountant has debited an asset account for $1.000 and credited liability account for $500. Which of the following would be an incorrect way to complete the recording of the transaction? a. Credit a shareholders' equity account for $500 b. Credit an asset account for $500 Credit another liability account for 5500 d Debit a shareholders' equity account for $500 8. Which one of the following is not a part of an account? a. Trial balance b. Tide Credit side d. Debit side 9. If total liabilities decreased by $5.000, then a assets and shareholders equity must have each increased by 53000 D. Shareholders' equity must have increased by 55,000 cassets must have decreased by 55,000 d. assets must have decreased by 55,000, or shareholders' equity have increased by $5,000 10. All of the following are investing activities except: a. Purchasing other companies shares b. Selling property, plant, and equipment Purchasing property, plant, and equipment d. Paying dividends 11. The usual ordering of accounts in the general ledger is liabilities, assets, shareholders' equity, revenues, and expenses b. shareholders' equity, assets, liabilities, expenses, and revenues. Cassets, liabilities, shareholders' equity, revenues, and expenses. d. assets, labilities, shareholders' equity, expenses, and revenues. 12. Financial reporting objectives do not include providing information a. to determine market values, assess profit potential, and evaluate management b. to make rational investment, credit, and similar decisions 13. The accounting equation can be stated as AL-CE=0 b.A.L.DE CAL-OF- d. A.L.O. 14. If the sum of the debit column equals the sum of the credit column in a trial balance, it indicates the mathematical equality of the accounting equation b. that all accounts reflect correct balances no errors have been made d. no errors can be discovered 15. Shareholders' equity can be described as claims of a debtors on total assets. b. owners on total assets. customers on total assets. d. creditors on total assets. 16. Adjusting entries are needed because an entity uses the cash basis of accounting rather than the accrual basis. b. has expenses chas earned revenue during the period by selling products from its central operations d. uses the accrual basis of accounting Credit 17. Dunbar Corporation was incorporated on July 1. 2018. Dunbar Corporation issued shares to each of the six owners who paid a total of $3.000 cash. On the basis of transaction analysis, the following entry should be recorded in the accounts (de-debit and a cashid)53,000 Shareholders equity id. 53,000 b. cash (dd. 53,000;share capital d. 53,000 cash), 53,000; share capital d. 53,000 d. cash (de). 53,000; revenue (0) 53,000 18. Bond corporation had a current ratio of 1.2 and the current assets and current liabilities were $150.000 and $125.000, respectively. This working capital position means that a current assets at book value are 12 times current liabilities at book value b. the company has a negative working capital the market value of the current assets exceeds the market value of the current liabilities by a factor of 12 d. none of the above 19. Which is the correct order of the steps in the accounting cycle during the accounting period? Transaction analysis, journal entries, trial balance b. Transaction analysis, journal entries, posting to the accounts Transaction analysis, posting to the accounts, journal entries. d. Transaction analysis, posting to the accounts, adjusting the accounts 20. On March 1, 2009, the premium on a two-year insurance policy on equipment was paid amounting to $1,800. How would the financial position as of December 31, 2009 (the end of the accounting period) be affected if the accountant did not record the adjusting entry? a Assets overstated by 5750; Liabilities unaffected Owners' equity overstated by 5750 b. Assets understated by $1,500; Liabilities unaffected Owners' equity understated by $750. Assets understated by 5750, Liabilities unaffected Owners' equity understated by 5750 d. No accounts will be affected. 21. In general, revenue recognition occurs a. when expenses are incurred b. in the period that income taxes are paid when cash is received d. when it is earned 22. A corporation has which of the following set of characteristics? a harder to raise funds and gives shareholders control b. easier to transfer ownership and raise funds, limited liability simple to set up and maintains control with founder d. shareholder control, income tax disadvantages, increased skills and resources 23. A current asset is a. an asset which is not currently being used to produce a product or service b. the last asset purchased by a business usually found as a separate classification in the income statement d. expected to be converted to cash or used in the business within a relatively short period of time 24. Collection of an $800 accounts receivable a. increases an asset 5800; decreases a liability 5800 b. decreases an asset 5800; decreases a liability 5800 5 decreases a liability 5800; increases shareholders' equity $800. d. has no effect on total assets 25. Recording Revenue a. increases assets and liabilities b. increases assets and shareholder's equity increases assets and decreases shareholder's equity d. has no effect on total assets 26. The right side of an account is a. always used to record increases b. always used to record decreases the credit side d. the debit side 27. When a service has been performed, but no cash has been received, which of the following statements is true? a. The entry includes a credit to Unearned Revenue b. No journal entry is made The entry includes a debit to Accounts Receivable d. The entry includes a debit to Accounts Payable 28. At year end, the adjusting entry for accrued salaries owed was omitted. Which of the next statements is true? 2. Shareholder's equity at the end of the year is understated b. Assets at the end of the year are understated Liabilities at the end of the year are understated d. Salary expense for the year is overstated 29. Which of the following direct effects on the accounting equation isn't possible as a result of a single business transaction which impacts only two accounts? 2. An increase in an asset and a decrease in an asset b. A decrease in stockholder's equity and a decrease in an asset An increase in stockholder's equity and an increase in an asset d. An increase in a liability and a decrease in an asset 30. Which of the following would not be considered a current asset? a. Accounts Receivable b. Truck held for sale c Building used in daily operations d. Prepaid expenses