Question One

1)Combining the economic record keeping of two separate businesses would violate the

A)cost principle

B)ethics principle.

C)economic entity concept.

D)monetary unit assumption

2)Jeanie Company purchases $600 of equipment from Mundelein Company for cash. The effect on the components of the accounting equation of Jeanie Company is

A)a decrease in assets and liabilities.

B)no change in total assets.

C)an increase in assets and liabilities.

D)an increase in assets and a decrease in liabilities

3)If adjustments are made on a monthly basis, the entry for a three-month note payable of $5,000 with an interest rate of 6% will include the following:

A)no entry is required.

B)a credit to Cash of $300.

C)a credit to Interest Payable of $25.

D)a debit to Interest Expense of $75.

4)Sam gets paid $2,500 every two weeks. Sam will not be paid until the end of the first week in April. The adjusting entry recorded by Sams employer on March 31 includes

A)a credit to cash of $1,250.

B)a debit to salaries expense of $1,250.

C)a debit to salaries expense of $2,500.

D)no entry is required.

5)Keswick Industries has the following current assets and current liabilities on the companys balance sheet: Cash $17,000; Accounts Receivable $8,200; Inventory $54,000; Prepaid Rent $3,000; Accounts Payable $23,000; Notes Payable due within one year $20,000; and Unearned Revenue $5,500. The companys current ratio would be

A)0.34:1

B)1.69:1

C)0.59:1

D)1.07:1

6)In order to close the Owner's Drawings account, the

A)Income Summary account should be credited.

B)Owner's Capital account should be debited.

C)Owner's Capital account should be credited.

D)Income Summary account should be debited

7)Bonita Company recently made a $10000 purchase from a major supplier. Shipping costs were $250, terms FOB shipping point. To record this purchase, Bonita Company will need to debit the

A)Cost of Goods Sold account for $250.

B)Merchandise Inventory account for $10250.

C)Cost of Goods Sold account for $10250.

D)Merchandise Inventory account for $10000.

8)The control activity related to not having the same person authorize and pay for goods is known as

A)segregation of duties.

B)establishment of responsibility.

C)independent check of performance.

D)rotation of duties.

9)On a bank reconciliation, outstanding cheques are:

A)added to the book balance.

B)added to the bank balance.

C)deducted from the bank balance.

D)deducted from the book balance.

10)Cullumbers Forest Products showed the following account balances at the end of 2021:

Cash		$ 103150
Accounts Receivable		19700
Accounts Payable		14000
Unearned Revenue		920
Sales		151700
Cullumber, Capital		71100
Cullumber, Withdrawals		59200
Office Supplies		2520
Wages Expense		44500
Utilities Expense		8650

Assuming all accounts have normal balances, what are the totals for the debit and credit columns in the trial balance?

A)$237720

B)$236800

C)$134570

D)$166620