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