Multiple Choice Choose the answer that best fits the question or statement Which of the following is not a monetary asset Inventory Accounts receivable ,b Notes receivable Investment in bonds The purchase of an asset for cash decreases assets and increases liabilities increases assets and shareholders' equity leaves total assets unchanged increases assets and liabilities ,d Which of the financial statements does not cover a period of time Statement of cash flows Balance sheet ,b Statement of retained earnings Income statement When a company has performed a service but has not yet received payment, it debits revenue from services and credits accounts payable makes no entry until the cash is received debits accounts receivable and credits revenue from services debits revenue from services and credits accounts receivable Which of the following is the proper order to list current assets on the balance sheet Cash, inventory, accounts receivable, temporary investments Cash, accounts receivable, inventory, prepaid expenses Cash, accounts receivable, temporary investments, inventory Cash, temporary investments, prepaid expenses, accounts receivable An accountant has debited an asset account for $1,000 and credited a liability account for $500 Which of the following would be an incorrect way to complete the recording of the transaction Credit a shareholders equity account for $500 Credit an asset account for $500 Credit another liability account for $500 Debit a shareholders equity account for $500 Which one of the following is not a part of an account Trial balance Title Credit side Debit side If total liabilities decreased by $5,000, then assets and shareholders' equity must have each increased by $3000 shareholders' equity must have increased by $5,000 assets must have decreased by $5,000 assets must have decreased by $5,000, or shareholders' equity have increased by $5,000 The usual ordering of accounts in the general ledger is liabilities, assets, shareholders' equity, revenues, and expenses shareholders' equity, assets, liabilities, expenses, and revenues assets, liabilities, shareholders' equity, revenues, and expenses assets, liabilities, shareholders' equity, expenses, and revenues The accounting equation can be stated as A L OE 0 A L OE 0 A L OE 0 A L OE 0 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 that all accounts reflect correct balances no errors have been made no errors can be discovered Shareholders' equity can be described as claims of debtors on total assets owners on total assets customers on total assets creditors on total assets Adjusting entries are needed because an entity uses the cash basis of accounting rather than the accrual basis has expenses has earned revenue during the period by selling products from its central operations uses the accrual basis of accounting 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 (dr debit and cr credit) cash (cr), $3,000 shareholders' equity (dr), $3,000 cash (dr), $3,000 share capital (cr), $3,000 cash (cr), $3,000 share capital (dr), $3,000 cash (dr), $3,000 revenue (cr), $3,000 Which is the correct order of the steps in the accounting cycle during the accounting period Transaction analysis, journal entries, trial balance Transaction analysis, journal entries, posting to the accounts Transaction analysis, posting to the accounts, journal entries Transaction analysis, posting to the accounts, adjusting the accounts 16 Which of the following assets does NOT decline in service potential over the course of its useful life a) equipment b) furnishings c) land d) fixtures 17 A company purchased land for $70,000 cash $7,000 was spent demolishing an old building on the land before construction of a new building could start The cost of land would be recorded at a) $77,000 b) $70,000 c) $63,000 d) $7,000 18 All of the following are examples of property, plant, and equipment EXCEPT a) equipment b) timber stand c) land d) building 19 Which one of the following items is NOT a consideration when recording periodic depreciation expense on long lived assets a) residual value b) estimated useful life c) cash needed to replace the long lived asset d) cost 20 A company purchased factory equipment on June 1, 2017 for $48,000 It is estimated that the equipment will have a $6,000 residual value at the end of its 10 year useful life Using the straight line method of depreciation, the amount to be recorded as depreciation expense at December 31, 2017 is a) $4,800 b) $4,200 c) $2,450 d) $6,000

The Answer is in the image, click to view ...

Answered step by step

Verified Expert Solution

Link Copied!

Question

1 Approved Answer

Posted on Jul 29, 2024

Multiple Choice. Choose the answer that best fits the question or statement Which of the following is not a monetary asset? Inventory Accounts receivable ,b

Multiple Choice. Choose the answer that best fits the question or statement

Which of the following is not a monetary asset?
1. Inventory
2. Accounts receivable ,b
3. Notes receivable
4. Investment in bonds

The purchase of an asset for cash
1. decreases assets and increases liabilities.
2. increases assets and shareholders' equity.
3. leaves total assets unchanged.
4. increases assets and liabilities. ,d

Which of the financial statements does not cover a period of time?
1. Statement of cash flows
2. Balance sheet ,b
3. Statement of retained earnings
4. Income statement

When a company has performed a service but has not yet received payment, it
1. debits revenue from services and credits accounts payable.
2. makes no entry until the cash is received.
3. debits accounts receivable and credits revenue from services.
4. debits revenue from services and credits accounts receivable.

Which of the following is the proper order to list current assets on the balance sheet?
1. Cash, inventory, accounts receivable, temporary investments
2. Cash, accounts receivable, inventory, prepaid expenses
3. Cash, accounts receivable, temporary investments, inventory
4. Cash, temporary investments, prepaid expenses, accounts receivable

An accountant has debited an asset account for $1,000 and credited a liability account for $500. Which of the following would be an incorrect way to complete the recording of the transaction?
1. Credit a shareholders equity account for $500.
2. Credit an asset account for $500.
3. Credit another liability account for $500.
4. Debit a shareholders equity account for $500.

Which one of the following is not a part of an account?
1. Trial balance
2. Title
3. Credit side
4. Debit side

If total liabilities decreased by $5,000, then
1. assets and shareholders' equity must have each increased by $3000.
2. shareholders' equity must have increased by $5,000.
3. assets must have decreased by $5,000.
4. assets must have decreased by $5,000, or shareholders' equity have increased by $5,000.

The usual ordering of accounts in the general ledger is
1. liabilities, assets, shareholders' equity, revenues, and expenses
2. shareholders' equity, assets, liabilities, expenses, and revenues.
3. assets, liabilities, shareholders' equity, revenues, and expenses.
4. assets, liabilities, shareholders' equity, expenses, and revenues.

The accounting equation can be stated as
1. -A + L - OE = 0.
2. A + L - OE =0.
3. A - L - OE = 0.
4. A - L + OE =0.

If the sum of the debit column equals the sum of the credit column in a trial balance, it indicates
1. the mathematical equality of the accounting equation.
2. that all accounts reflect correct balances.
3. no errors have been made.
4. no errors can be discovered.

Shareholders' equity can be described as claims of
1. debtors on total assets.
2. owners on total assets.
3. customers on total assets.
4. creditors on total assets.

Adjusting entries are needed because an entity
1. uses the cash basis of accounting rather than the accrual basis.
2. has expenses.
3. has earned revenue during the period by selling products from its central operations.
4. uses the accrual basis of accounting.

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 (dr = debit and cr = credit)
1. cash (cr), $3,000; shareholders' equity (dr), $3,000.
2. cash (dr), $3,000; share capital (cr), $3,000.
3. cash (cr), $3,000; share capital (dr), $3,000.
4. cash (dr), $3,000; revenue (cr), $3,000.

Which is the correct order of the steps in the accounting cycle during the accounting period?
1. Transaction analysis, journal entries, trial balance.
2. Transaction analysis, journal entries, posting to the accounts.
3. Transaction analysis, posting to the accounts, journal entries.
4. Transaction analysis, posting to the accounts, adjusting the accounts.

16. Which of the following assets does NOT decline in service potential over the course of its useful life?

a) equipment

b) furnishings

c) land

d) fixtures

17. A company purchased land for $70,000 cash. $7,000 was spent demolishing an old building on the land before construction of a new building could start. The cost of land would be recorded at

a) $77,000.

b) $70,000.

c) $63,000.

d) $7,000.

18. All of the following are examples of property, plant, and equipment EXCEPT

a) equipment.

b) timber stand.

c) land.

d) building.

19. Which one of the following items is NOT a consideration when recording periodic depreciation expense on long-lived assets?

a) residual value

b) estimated useful life

c) cash needed to replace the long-lived asset

d) cost

20. A company purchased factory equipment on June 1, 2017 for $48,000. It is estimated that the equipment will have a $6,000 residual value at the end of its 10-year useful life. Using the straight-line method of depreciation, the amount to be recorded as depreciation expense at December 31, 2017 is

a) $4,800.

b) $4,200.

c) $2,450.

d) $6,000.