Results of operations

Question-1

The balance sheet presents a company’s:

• Results of operations for a period of time
• Results of operations at a moment of time
• Financial position for a period of time
• Financial position at a moment in time
• None of the above

Question-2

The income statement represents a company’s:

• Results of operations for a period of time
• Results of operations at a moment of time
• Financial position for a period of time
• Financial position at a moment in time
• None of the above

Question-3

The accrual method of accounting:

• States that revenue should be recognized in the period when cash is received
• Requires that revenue be recognized in the accounting period when it is earned
• Requires that events which make a difference to financial statement users be disclosed
• States that revenue should be recorded using a permanent account
• None of the above

Question-4

The normal balance of any account is the:

• Left side
• right side
• Side which increases that account
• side which decreases that account

Question-5

Which of the following correctly identifies normal balances of accounts?

Assets Debit

• Liabilities                                               Credit
• Stockholders’ Equity           Credit
• Revenues                                              Debit
•  Expenses                                                Credit

Assets Debit

• Liabilities                                               Credit
• Stockholders’ Equity           Credit
• Revenues                                              Credit
• Expenses                                               Credit

Assets Credit

• Liabilities                                               Debit
• Stockholders’ Equity           Debit
• Revenues                                              Credit
• Expenses                                               Debit

Assets Debit

• Liabilities                                               Credit
• Stockholders’ Equity           Credit
• Revenues                                              Credit
• Expenses                                               Debit

Question-6

If expenses are paid in cash, then:

• Assets will increase
• Liabilities will decrease
• Stockholders’ equity will increase
• Assets will decrease

Question-7

Collection of a $1,000 accounts receivable:

• Increases an asset $1,000; decreases an asset $1,000
• Increases an asset $1,000; decreases a liability $1,000
• Decreases a liability $1,000; increases stockholders’ equity $1,000
• Decreases an asset $1,000; decreases a liability $1,000

Question-8

At January 1, 2008, Kobe Enterprises reported accounts receivable totaling $3,500. During the month, the company had credit sales of $5,000 and collected cash on accounts of $6,000.  At the end of January, the balance in accounts receivable is:

• $1,500
• $2,500
• $14,500
• Cannot determine based on the information provided

Question-9

Retained earnings at the end of the period is equal to:

• Retained earnings at the beginning of the period plus net income minus liabilities
• Retained earnings at the beginning of the period plus net income minus dividends
• Net income
• Assets plus liabilities

Question-10

Misra Company compiled the following financial information as of December 31, 2015:

Revenues                               $340,000                  Retained earnings (1/1/15)    $60,000

Equipment                                 80,000

Expenses                                 250,000

Cash                                            90,000

Dividends                                   20,000

Supplies                                      10,000

Accounts payable                      40,000

Accounts receivable                   70,000

Common stock                           80,000

Misra’s assets on December 31, 2015 are:

• $180,000
• $250,000
• $360,000
• $490,000

Use the following information to answer the two questions that follow.

Edith Inc. paid employees for a month’s work.

Question-11

The journal entry would include a debit to which account?

• Retained earnings
• Revenue
• Salaries payable
• Salary expense
• Cash

Question-12

The journal entry would include a credit to which account?

• Retained earnings
• Revenue
• Salaries payable
• Salary expense
• Cash

Use the following information to answer the two questions that follow.

Frank Company purchased computer equipment and paid $14,000 cash.

Question-13

The journal entry would include a debit to which account?

• Computer Equipment Expense
• Computer Equipment
• Cash
• Accounts payable
• Accumulated Depreciation – Computer Equipment

Question-14

The journal entry would include a credit to which account?

• Computer Equipment Expense
• Computer Equipment
• Cash
• Accounts payable
• Accumulated Depreciation – Computer Equipment

Question-15

Which adjusting entry will result in a decrease in assets?

• An adjusting entry to record interest that has been incurred
• An adjusting entry to record the expiration of rent
• An adjusting entry to record revenue that is earned
• All of the above
• None of the above