Professional Documents
Culture Documents
If assets total $400,000 and owners' equity totals $250,000, then total liabilities must be
A)
B)
C)
D)
2
In which order are liabilities usually listed in the balance sheet
A)
B)
C)
D)
3
Office equipment was purchased for cash. What effect did this transaction have in the finan
position of the company?
A)
B)
C)
D)
4
4
Office equipment was purchased by issuing a check for $10,000 and a note payable for the
$60,000. What effect did this transaction have in the financial position of the company?
A)
B)
C)
D)
5
A balance sheet, or statement of financial position, is
A)
B)
C)
D)
6
The income statement
A)
B)
C)
D)
7
7
The beginning balance of cash was $0. The ending balance of cash is $45,600. In the state
cash flows, cash flows from operating activities were a positive $24,000, and the cash flow
investing activities was a negative $6,000. The cash flows from financing activities were wh
following?
A)
B)
C)
D)
8
Articulation refers to the relationship among the financial statements. What item in the inco
statement ties that statement to the balance sheet?
A)
B)
C)
D)
9
In the short run, what distinguishes liquidity from profitability?
A)
B)
C)
D)
10
10
A 'strong' statement of cash flows would show that the major sources of cash came from w
following?
A)
B)
C)
D)
QUIZ
If assets total $400,000 and owners' equity totals $250,000, then total liabilities must be
$450,000
$550,000
$150,000
$250,000
In which order are liabilities usually listed in the balance sheet
The order in which they were incurred
The order of smallest to largest
Alphabetical order
The order in which they are expected to be repaid
Office equipment was purchased for cash. What effect did this transaction have in the financial
position of the company?
Assets, decrease; Liabilities, no change; Owners' Equity, decrease.
Assets, decrease; Liabilities, increase; Owners' Equity, no change.
Assets, no change; Liabilities, no change; Owners' Equity, no change.
Assets, increase; Liabilities, increase; Owners' Equity, no change.
Office equipment was purchased by issuing a check for $10,000 and a note payable for the balance of
$60,000. What effect did this transaction have in the financial position of the company?
Assets, no change; Liabilities, no change; Owners' Equity, no change.
Assets, decrease; Liabilities, increase; Owners' Equity, no change.
Assets, decrease; Liabilities, no change; Owners' Equity, decrease.
Assets, increase; Liabilities, increase; Owners' Equity, no change.
an expansion of the basic accounting equation.
used to report the results of business operations over a period of time.
composed of four distinct major sections.
prepared ahead of the income statement.
The income statement
is a summary of revenues and expenses.
is used to report the results of operations over a specific period of time.
explains, in part, how the company's financial position changed over a specific time period.
is all of the above.
The beginning balance of cash was $0. The ending balance of cash is $45,600. In the statement of
cash flows, cash flows from operating activities were a positive $24,000, and the cash flows used by
investing activities was a negative $6,000. The cash flows from financing activities were which of the
following?
Negative cash flow of $28,400
Positive cash flow of $27,600
Negative cash flow of $45,600
Positive cash flow of $18,000
Articulation refers to the relationship among the financial statements. What item in the income
statement ties that statement to the balance sheet?
Revenues
Expenses
Net income
all of the above
In the short run, what distinguishes liquidity from profitability?
There are no distinguishable differences.
Profitability increases owners' equity, liquidity does not.
Creditors are more interested in profitability than liquidity.
Owners have an interest in profitability but not in liquidity.
A 'strong' statement of cash flows would show that the major sources of cash came from which of the
following?
Investing activities
Operating activities
Financing activities
Owners
Multiple Choice Quiz
2 Every adjusting entry involves the recognition of either revenue or expense. Which of the follow
A) There also must be a corresponding change in capital stock.
B) There also must be a corresponding change in either assets or liabilities.
C) There also must be a corresponding change in the cash account.
D) Both (A) and (B).
3 When recording the adjusting entry to recognize the consumed portion of unexpired insurance,
include which of the following?
A) A debit to Insurance Expense
B) A debit to Unexpired Insurance
C) A credit to Cash
D) A credit to Insurance Expense
4 The original cost of a physical asset was $45,000. It was purchased on January 5, 2004. It has an
10 years and has been depreciated under the straight-line method for 5 years. At the end of the
entries have been recorded and posted, the book value of the physical asset will be which of the
A) $22,500
B) $27,000
C) $18,000
D) $40,500
5 On November 18, the company received $24,000 for services to be performed over the followin
A) A debit to Unearned Services Revenue and a credit to Accounts Receivable for $8,000.
B) A credit to Services Revenue and a debit to Cash for $16,000
C) A credit to Services Revenue and a debit to Accounts Receivable for $8,000
D) A debit to Unearned Services Revenues and a credit to Services Revenue for $8,000
6 On November 16, the company borrowed $24,000 for 90 days at 6% interest. Interest expense w
end of November. The adjusting entry made on December 31 would include which of the follow
A) A debit to Interest Expense of $360
B) A debit to Interest Expense of $120
C) A credit to Interest Payable of $180
D) A credit to Interest Payable of $480
7 When adjusting for revenue that has accrued (been earned) but has not been recorded, which o
A) An asset account is increased and a revenue account is increased.
B) A revenue account is increased and an expense account is increased.
C) A revenue account is increased and a liability account is decreased.
D) A revenue account is increased and a liability account is increased.
An adjusting entry was made in which Unearned Services Revenue was debited for $4,000 and S
10 credited for $4,000. However, this journal entry was posted to the Unearned Services Revenue a
the Office Supplies 10pense account as a credit. As a consequence of this error, the:
A) trial balance will have a credit balance $4,000 greater than the debit balance.
B) trial balance will have equal totals of debit and credit balances.
C) trial balance will have a debit balance $4,000 greater than the credit balance.
D) net income will be overstated $4,000.
expense. Which of the following is also true?
performed over the following three months. Cash was debited for $24,000 and Unearned Services Revenue was credited for $24,000. Non
s Receivable for $8,000.
e for $8,000
s Revenue for $8,000
debit balance.
credit balance.
e was credited for $24,000. None of the services were provided in November. One-third of the services were completed by December 31.
ere completed by December 31. The adjusting entry for December 31 would include which of the following?