Principle of accounting , Multiple only

Question 2: Multiple Choice Questions(40) 1. Zion Company has assets of $600,000, liabilities of $250,000, and equity of $350,000. It buys office equipment on credit for $75,000. What would be the effects of this transaction on the accounting equation? A. Assets increase by $75,000 and expenses increase by $75,000. B. Assets increase by $75,000 and expenses decrease by $75,000. C. Liabilities increase by $75,000 and expenses decrease by $75,000. D. Assets decrease by $75,000 and expenses decrease by $75,000. E.Assets increase by $75,000 and liabilities increase by $75,000. On September 30, the Cash account of Value Company had a normal balance of $5,000. During September, 2. the account was debited for a total of $12,200 and credited for a total of $11,500. What was the balance in the Cash account at the beginning of September? A. A S0 balance. D. A $5,700 debit balance, C. A $4,300 credit balance. B. A $4,300 debit balance. E. A $5,700 credit balance. 3. On April 30, a three-year insurance policy was purchased for $18,000 with coverage to begin immediately. What is the amount of insurance expense that would appear on the company's income statement for the year ended December 31? A. $500, C. $6,000. B. $4,000. D. $14,000. E. $18,000. A company had revenues of $75,000 and expenses of $62,000 for the accounting period. The owner 4 withdrew $8,000 in cash during the same period. Which of the following entries could not be a closing entry? A. Debit Income Summary $13,000; credit Owner's, Capital $13,000 B. Debit Income Summary $75,000; credit Revenues $75,000. C. Debit Revenues $75,000; credit Income Summary $75,000. D. Debit Income Summary $62,000, credit Expenses $62,000. E. Debit Owner's, Capital $8,000, credit Owner's, Withdrawals $8,000. S. A debit memorandum is: A. Required whenever a journal entry is recorded. B. The source document for the purchase of merchandise inventory. C. Required when a purchase discount is granted. D. The document a buyer issues to inform the seller of a debit made to the seller's account in the buyer's merchandise. On December 8, it paid the balance in full, taking a 2% discount. The amount of the cash paid on December 8 equals: A. $200 records E. Not necessary in a perpetual inventory system. 7. Griggs Company holds $50,000 of 8% bonds as a held-to-maturity security. Which of the following is the conrect jounal entry to record the receipt of the semiannual interest payment? A. debit Cash, $4,000; credit Long-Temm Investments-HTM $4,000 B. debe Cash, $2,000; credit Long-Term lnvestments-HTM, $2000 C. debit Cash, $2.000; credit Interest Revenue, $2,000 D. debit Unrealizod Gain-Equity, $2.000; credit Cash, $2,000 E. debit Cash, $4,000; credit Unrealized Gain-Equity, $4,000 6. A company purchased $1,800 of merchandise on December 5. On December 7, it returned $200 worth of D. $1,600 E.$1,800 C.$1,568 B. S1,564 A company had inventory on November 1 of 5 units at a cost of $20 each. On November 2, they purchased 10 units at $22 each. On November 6 they purchased 6 units at $25 each. On November 8, 8 units were sold for $55 each. Using the LIFO perpetual inventory method, what was the value of the inventory on November 8. 8 after the sale? A. $304 E.$276 D. $280 C. $288 B. $296 The nule that requires financial statements to reflect the assumption that the business will continue operating instead of being closed or sold, unless evidence shows that it will not continue, is the: A. Going-concern assumption. C. Objectivity principle 9. B. Business entity assumption D. Cost Principle. E Monetary unit assumption. 10. If a parcel of land that was originally acquired for $85,000 is offered for sale at $150,000, is assessed for tax purposes at $95,000, is recognized by its purchasers as easily being worth $140,000, and is sold for $137,000, the land should be recorded in the purchaser's books at A. $95,000. B. $137,000. C.$138,500. D.$140,000. E. $150,000. 11. A company purchased $4,000 worth of merchandise. Transportation costs were an additional $350. The company later returmed $275 worth of merchandise and paid the invoice within the 2% cash discount period. The total amount paid for this merchandise is: A. 53,725.00. C. $3,995.00. B. 53,925.00. D. S4,000.50. E. S4,075.00. 12. A company borrowed $50,000 from a bank by signing a long-term note payable. Identify the journal the transaction would be recorded in. A. Cash disbursements journal. D. Purchases journal. B. Sales jounal. c. Cash receipts journal. E. General journal. 13. For which item does a bank NOT issue a debit memorandum? A. To notify a depositor of all withdrawals through an ATM B. To notify a depositor of a fee assessed to the depositor's account. C. To notify a depositor of a uncollectible check D. To notify a depositor of periodic payments arranged in advance, by a depositor. E. To notify a depositor of a deposit to their account. 14. A company made no adjusting entry for accrued and unpaid employee wages of $28,000 on December 31. This oversight would: A. Understate net income by $28,000. C. Have no effect on net income E. Understate assets by $28,000. B.Overstate net income by $28,000. p.Overstale assets by $28,000. 15. When originally purchased, a vehicle had an estimated useful life of 8 years. The vehicle cost $23,000 and its estimated salvage value is $1,500. After 4 years of straight-line depreciation, the asset's total estimated useful life was revised from 8 years to 6 years and there was no change in the estimated salvage value. The depreciation expense in year 5: equals A.$5,375.00. B.S268750 C.S5543.75 D.S10,750.00. E.S285625