1. If an accountant forgot to record the earned portion of unearned revenue at the end of an accounting period which of the following would be true regarding the statements prepared at that time?
   1. The liabilities and owners equity are both overstated.
   2. The liabilities and owners equity are both understated.
   3. The liabilities are overstated, net income is understated, and owners equity is understated.
   4. The liabilities are understated, net income is understated, and owners equity is overstated.

2. The Formula Company purchased a new truck at a cost of $56,000 on October 1, 2016. The truck is estimated to have a useful life of five years and a salvage value of $10,000. How much Depreciation expense will be recorded for the truck during the year ended December 31, 2016 assuming the straight-line method?

1) $2,300

2) $2,800

3) $9,200

4) $11,200

3. The Office Supplies account shows a beginning balance of $800 and an ending balance of $600. If office supplies purchased during the year totaled $2,600, what amount should be recorded for office supplies expense for the year?

1) $1,200

2) $1,800

3) $2,400

4) $2,800

4. If accrued salaries were not recorded on December 31, how would the account balances be affected?
   1. Assets are understated, equities are overstated.
   2. Assets are overstated, equities are understated.
   3. Liabilities are understated, equities are overstated.
   4. Liabilities are overstated, equities are understated.

5. Finance Corporation, a finance company, lends Basic Business $1,800 at 6% for four months on December 1, 2016. What should Finance Corporations adjusting entry on December 31, 2016 include?
   1. A credit to Interest Earned for $9

2. A debit to interest expense for $9
3. A credit to Interest Earned for $36
4. A debit to Interest expense for $36

6. Sams Computer Business owns computer equipment that cost $8,000 when it was purchased three years ago. Its current book value is $3,200. What is the Depreciation expense per year using straight-line Depreciation?

1) $1,000

2) $1,200

3) $1,400

4) $1,600

7. The statement of financial position for Chriss Soccer Emporium shows $320,000 in total assets and $190,000 in total liabilities. $210,000 of the total assets are non-current and 40% of the total liabilities are long-term liabilities. What is the current ratio?

1) 0.96

2) 1.45

3) 1.84

4) 2.76

8. On the worksheet, the debit column of the statement of comprehensive income shows a total of

$76,300. The credit column total is $82,400. What is the net income or loss?

1. The net income of this business is $7,100
2. The net income of this business is $6,100
3. The loss of this business is $7,100
4. The loss of this business is $6,100

1. The bookkeeper of Stevens BBQ Shack prepared closing entries for a $900 loss and withdrawals by Steven of $600.The ending balance in the Capital account is a credit balance of

$700. What was the beginning credit balance in the account for the year?

1) $400

2) $1,000

3) $2,200

4) $2,800

10. Which accounts will appear on the post-closing trial balance?
    1. Unearned revenue, prepaid insurance expense, cash
    2. Consulting revenue, prepaid rent expense, cash
    3. Unearned revenue, insurance expense, cash
    4. Consulting revenue, insurance expense, cash