Submit response?

You can only respond to this form once. Continue?

SWITCH ACCOUNTS
SUBMIT

Accounting 101 A MIDTERM EXAM 9:00 -

12:00
*Required

Email address *

LAST NAME *

FIRST NAME *

ID NUMBER *

1. The economic data on the transactions and other accountable events of an entity
are collected by means of *
1 point

a. Source documents
b. Accounts
c. Journals
d. Accounting records

2. The first step in the accounting cycle is to *

1 point

a. Record transactions in a journal

b. Analyze transactions from source documents
c. Post journal entries to general ledger accounts
d. Adjust the general ledger accounts

3. The debit and credit analysis of a transaction normally takes place *

1 point

a. Before an entry is recorded in the journal

b. When the entry is posted to the ledger
c. When the trial balance is prepared
d. At some other point in the accounting cycle

4. Which of the following phrases describes the effects of the purchase of an asset on
account? *
1 point

a. Increase in assets and increase in expenses

b. Increase in assets and increase in liabilities
c. Increase in expenses and increase in liabilities
d. Increase in liabilities and decrease in shareholder’s equity

5. Which of the following statements is true regarding the effect of the purchase of
equipment for cash *
1 point

a. Total assets decrease

b. Total liabilities increase
c. Total assets remain unchanged
d. Total shareholder’s equity decreases

6. A transaction that has a net effect of increasing assets and equity is *
1 point

b. A sale of services for cash

d. Collection of accounts receivable
c. Retirement of treasury shares
a. Payment of an expense in cash

7. The book of original entry is the *

1 point

b. Journal
c. Ledger
d. Book of Genesis
a. Trial balance

8. What function do accounting journals serve in the accounting process? *

1 point

c. Summarizing
a. Recording
d. Reporting
b. Classifying
9. What function do accounting ledgers serve in the accounting process? *
1 point

b. Classifying
c. Summarizing
d. Reporting
a. Recording

10. Credits are used to record increases in *

1 point

d. Revenues, and liabilities

c. Revenues, dividends, and assets
b. Expenses, and liabilities
a. Assets, revenues, and liabilities

11. Posting refers to the process of transferring information from *

1 point

a. Journals to general ledger accounts

b. General ledger accounts to journal
c. Source documents to journals
d. Journals to source documents

12. A ledger is *

1 point

a. A collection of transactions
b. A collection of all statements of financial position accounts
c. A collection of all earnings statement accounts
d. A collection of account titles – asset, liability, equity, income and expense accounts

13. A listing of all the general ledger accounts in a systematic form is called *
1 point

a. Subsidiary ledger
b. Chart of accounts
c. Voucher
d. Accounts

14. Which of the following is considered a real (permanent) account? *

1 point

a. Interest expense
b. Distribution costs
c. Accrued income
d. Income
15. Which of the following types of accounts measure economic flows over a period of
time? *
1 point

a. Real (permanent) account

b. Nominal (temporary) account
c. Mixed accounts
d. Contra account

16. A trial balance that is in balance proves that *

1 point

a. All entries have been entered in the journal correctly

b. Total debits equal total credits in the ledger accounts
c. All entries have been posted from the journal to the ledger correctly
d. No significant errors exist in the ledger accounts

17. Whenever the debit total exceeds the credit total in the income statement columns
of the worksheet, this indicates a(n) *
1 point

a. Net loss
b. Net income
c. Zero profit
d. No meaningful amount

18. Adjusting entries involve *

1 point

a. Only real accounts

b. Only nominal accounts
c. Only capital accounts
d. One real and one nominal account

19. An example of adjusting entry is recording the *

1 point

a. Payment of wages to employees

b. Depreciation of an equipment
c. Collection of an account
d. Purchase of an equipment

20. A prepaid expense can be best described as an amount *

1 point

a. Paid and matched with earnings

b. Paid but not matched with earnings
c. Not paid and not matched with earnings
d. Not paid but matched with earnings

21. An accrued expense can be best described as an amount *

1 point

a. Paid and matched with earnings

b. Paid but not matched with earnings
c. Not paid and not matched with earnings
d. Not paid but matched with earnings

22. The receipt of advance rental fee is recorded by debiting cash and crediting
unearned rent, this approach of recording is known as *
1 point

a. Asset method
b. Expense method
c. Liability method
d. Income method

23. If the advance payment of an expense was initially recorded in an asset account,
the adjusting entry will involve *
1 point

a. A debit to expense and a credit to an asset account in the amount of the expired cost
b. A debit to expense and a credit to an asset account in the amount of the unexpired cost
c. A debit to an asset account and a credit to expense in the amount of the expired cost
d. A debit to an asset account and a credit to expense in the amount of the unexpired cost

24. A complete set of financial statements normally includes a balance sheet, an

income statement, a statement of changes in financial position (which may be
presented in a variety of ways, for example, as a statement of cash flows or a
statement of funds flow), and those notes and other statements and explanatory
material that are an integral part of the financial statements. *
1 point

a. The statement is true.

b. The statement is false.
c. The statement is sometimes true but most of the time false
d. The statement is sometimes false but most of the time true.

25. Under this underlying assumption, the effects of transactions and other events are
recognized when they occur (and not as cash or its equivalent is received or paid) and
they are recorded in the accounting records and reported in the financial statements of
the periods to which they relate. This is *
1 point
a. Cash basis
b. Accrual basis
c. Modified cash basis
d. Cash and Accrual basis

26. Under this underlying assumption, financial statements are normally prepared on
the assumption that an entity will continue in operation for the foreseeable future. The
entity bas neither the intention nor the need to liquidate or stop materially the scale of
its operations. *
1 point

a. Accrual basis
b. Going concern
c. Historical cost
d. Matching and monetary concept

27. The qualitative characteristics that describes that users are assumed to have a
reasonable knowledge of business and economic activities and accounting and a
willingness to study the information with reasonable diligence is *
1 point

a. Understandability
b. Relevance
c. Reliability
d. Neutrality

28. It arises in the course of the ordinary activities of an entity and is referred to by a
variety of different names including sales, fees, interest, dividends, royalties and
rent. *
1 point

a. Income
b. Expense
c. Retained earnings
d. Liabilities

29. It is the process of determining the monetary amounts at which the elements of the
financial statements are to be recognized and carried in the balance sheet and income
statement. *
1 point

a. Recognition
b. Initial recognition
c. Measurement
d. Presentation
30. These are structured representation of the financial position and financial
performance of an entity *
1 point

a. Financial reports
b. Financial statements
c. Statement of position
d. Statement of comprehensive income

31. Cash on hand and demand deposit only is *

1 point

a. Cash
b. Cash equivalent
c. Cash and cash equivalent
d. Restricted cash
Option 1

32. These are tangible items that: (1) are held for use in the production or supply of
goods or services, for rental to others, or for administrative purposes; and (2) are
expected to be used during more than one period. *
1 point

a. Property, plant and equipment

b. Intangibles
c. Leased assets
d. Factory assets

33. The basic purpose of accounting is *

1 point

a. To provide the information that the managers of an economic entity need to control its
operations.
b. To provide information that the creditors of an economic entity can use in deciding whether to
make additional loans to the entity.
c. To measure the periodic income of the economic entity.
d. To provide quantitative financial information about a business enterprise that is useful in
making rational economic decision.

34. In recording transactions, *

1 point

a. The word debit means increase and the word credit means decrease
b. Assets, expenses, and drawing accounts are debited for increases.
c. Liabilities, revenue, and drawing accounts are debited for increases.
d. Assets, expenses, and capital are debited for increases.
35. Settlement of a present obligation may occur in a number of ways, for example,
by: *
1 point

a. Payment of cash
b. Transfer of other assets
c. Provision for services
d. Replacement of that obligation with another obligation
e. Conversion of the obligation to equity
f. All the choices.

36. The components of the balance sheet equation are *

1 point

a. Assets, income and owner’s equity

b. Income, expenses and profit
c. Investments, withdrawals and profit
d. Assets, liabilities and owner’s equity

37. Expenses can be defined as *

1 point

a. Increases in owner’s equity

b. Decreases in owner’s equity
c. Inflows of assets from delivering or producing goods or rendering services.
d. Decreases in economic benefits during the accounting period in the form of outflows or
depletions of assets or incurrence of liabilities that result in decreases in equity.

38. The amount of cash received or paid during a period is not an adequate measure
of the economic consequences of an organization’s activities because *
1 point

a. Many activities may not involve the use of cash.

b. Cash inflows may represent the result of activities completed in a previous period.
c. Cash outflows may precede or follow the activities with which they are associated.
d. All of the above reasons are correct.

39. Which of the following steps in the accounting cycle are listed in logical order? *
1 point

a. Prepare the income statement, prepare the statement of financial position and then prepare a
worksheet.
b. Journalize the closing entries, post the closing entries, and then take a post-closing trial
balance.
c. Post the journal entries to the ledger accounts, prepare a worksheet, and then take a trial
balance.
d. Post the closing entries, take a post-closing trial balance, and then journalize the closing
entries.
40. The purpose of the ledger is to *
1 point

a. Maintain a separate account for each balance sheet and income statement accounts.
b. Record chronologically the day’s transactions.
c. Keep a record of documentation to support each transaction.
d. Make sure that all balance sheet and income statement accounts have normal balances at all
times.

41. The term footing refers to the *

1 point

a. Process of obtaining the top number in an account.

b. Process of obtaining the bottom number in an account.
c. Process of posting.
d. Addition of a column of figures.

42. What function do general ledgers serve in the accounting process? *

1 point

a. Summarizing
b. Classifying
c. Recording
d. Reporting

43. When accounting information is accumulated in individual accounts, a chart of

accounts is *
1 point

a. Limited to those accounts that will appear in the balance sheet.

b. A listing of each account that will be used to accumulate information
c. Changed each year by an entity depending on the results of operations.
d. Used to determine whether a debit or credit balance will appear in each of the accounts at the
end of the accounting period.

44. The primary function of an account in the accounting system is to *

1 point

a. Store accounting transactions until they are classified.

b. Identify the type of organization.
c. Accumulate accounting information
d. Determine at what point a transactions should be recorded.

45. The normal balance of an account is on the *

1 point

a. Side represented by decrease in the account balance.

b. Debit side of the account.
c. Side represented by increases in the account balance.
d. Credit side of the account.

46. The accounting cycle is *

1 point

a. The length of time it takes to complete a set of financial statement after the books are closed.
b. The sequence of procedures used by a business to process economic information and to
produce financial statements.
c. A process that begins with adjusting entries and ends with the preparation of the financial
statements.
d. Applicable only to manual systems, not to computerized systems.

47. The equality of debits and credits in the ledger should be verified at the end of
each accounting period by preparing *
1 point

a. An accounting statement
b. An account verification report
c. A balance report
d. A trial balance

48. Which of the following statements regarding a trial balance is incorrect? *

1 point

a. A trial balance helps to localize errors within an identifiable time period.

b. A trial balance is a test of the equality of the debit and credit balances in the ledger.
c. A trial balance is a list of all of the open accounts in the ledger with their balances as of a given
date.
d. A trial balance proves that no errors of any kind have been made in the accounts during the
accounting period.

49. The accrual basis of accounting recognizes *

1 point

a. Revenues when cash is received.

b. Expenses when cash is paid.
c. Revenues when products are produced as part of operating activities.
d. Expenses when resources are consumed as part of operating activities.

50. The trial balance will not expose which of the following problems? *
1 point

a. Recording half an entry

b. Recording both halves of an entry on the same side
c. Leaving out an entire entry
d. Recording half an entry and leaving out an entire entry
e. Recording half an entry and recording both halves of an entry on the same side
51. Depreciation is *
1 point

a. A decrease in the fair market value of an asset.

b. An expense that is incurred during an accounting period.
c. A method of saving cash to replace plant assets.
d. Added to the cost of equipment on the balance sheet
e. Shown on the balance sheet as a liability

52. An adjusting entry to accrue salaries incurred but not yet paid is an example of *
1 point

a. Aligning recorded costs with appropriate accounting periods.

b. Aligning recorded revenues with appropriate accounting records.
c. Reflecting unrecorded revenues earned during the accounting period.
d. Reflecting unrecorded expenses incurred during the accounting period.

53. Adjusting entries *

1 point

a. Assign revenues to the period in which they are earned.

b. Help to properly measure the period’s profit or loss.
c. Bring asset and liability accounts to correct balances.
d. All of the above

54. The cost of doing business is also known as *

1 point

a. Revenue
b. An expense
c. A liability
d. An asset

55. A statement of changes in equity *

1 point

a. Shows the income and expenses of the entity for a given period
b. Has no relationship with the balance sheet
c. Indicates whether the cash position of the entity will permit withdrawals by the owner
d. Provides a link between the income statement and the balance sheet.

56. Assuming a company is profitable in the current period, the total of the balance
sheet credit column in the worksheet will be *
1 point

a. Larger than the balance sheet debit column

b. Larger than the income statement debit column
c. Larger than the income statement credit column
d. Smaller than the balance sheet debit columns.

57. The usefulness of the worksheet is in *

1 point

a. Identifying the accounts that need to be adjusted

b. Summarizing the effects of all the transactions of the period.
c. Aiding the preparation of financial statements
d. All of the above

58. Worksheets are prepared because *

1 point

a. They are required by generally accepted accounting principle

b. They constitute a permanent record of all adjusting entries made for the period
c. They are necessary for the preparation of the financial statements
d. They aid in the preparation of the financial statements, adjusting entries and closing entries

59. In the adjusted trial balance, the owner’s equity accounts reflects *
1 point

a. The results of adjusting entries

b. The increase to income and expense
c. The beginning of the period balance
d. The period ending balance

60. Which of the following steps comes first in worksheet preparation? *

1 point

a. Compute each account’s adjusted balance by combining the trial balance and adjustment
figures.
b. Compute profit or loss as the difference between total revenues and total expenses on the
income statement
c. Enter the account balances in the unadjusted trial balance columns and total the amounts.
d. Enter the adjusting entries in the adjustment columns and total the amounts.

61. The profit figure appears in all of the following financial statements except the *
1 point

a. Statement of cash flows

b. Income statement
c. Statement of changes in equity
d. Balance sheet
Option 1

62. If the income statement debit and credit columns are not equal after adding the
respective columns, *
1 point
a. An error has been made
b. The company either generated a profit or incurred a loss
c. The company generated a profit
d. The company incurred a loss
e. The liabilities must exceed the assets
Option 1

63. If the amount of profit for the current period is less than the amount of the owner’s
withdrawals, there will be a (n) *
1 point

a. Decrease in the cash account

b. Decrease in the owner’s capital account
c. Increase in the owner’s capital account
d. Increase in the cash account
e. Increase in liabilities on the balance sheet.
Option 1

64. Which of the following best states the purpose of general purpose financial
statements? *
1 point

a. To disclose the market value of the firm’s assets and liabilities.

b. To determine compliance with tax laws.
c. To identify shareholders.
d. To help users make decisions.

65. A primary objective of financial reporting is to: *

1 point

a. Assist investors in analyzing the economy.

b. Assist suppliers in determining an appropriate discount to offer a particular company
c. Assist banks to determine an appropriate interest rate for their commercial loans.
d. Assist investors in predicting prospective cash flows

66. External decision makers include all of the following except: *

1 point

a. Managers
b. Owners
c. Creditors
d. Financial press

67. The manner in which the accounting records are organized and employed within a
business is known as *
1 point

a. Voucher system
b. Business document
c. Accounting system
d. Special journals
Option 1

68. Which one of these is not among the criteria to consider an event as
accountable? *
1 point

a. It must increase or decrease an element of the financial statements

b. It must be classified as an external event rather than an internal event
c. Its amount can be measured reliably
d. It must have already happened

69. Which of the following is an application of the science aspect of accounting? *

1 point

a. Interpreting the information presented in the financial statements through ratios and trend
analysis
b. Exercise of creative skill and judgment
c. Attesting to the fairness of presentation of financial condition and operating results
d. Applying the rules of debit and credit
Option 1

70. To post in accounting means to: *

1 point

a. Copy the information about account changes from the source documents, and record it in the
ledger.
b. Copy the information about account changes from the ledger and place it into the journal.
c. Copy the information about account changes from the journal, place it into the ledger and then
delete it from the journal.
d. Copy the information about account changes from the journal, and place it into the ledger.

71. What is normal order of accounts in the unadjusted trial balance? *

1 point

a. Assets, equity, income, expenses and finally liabilities

b. Assets, liabilities, equity, income and finally expenses
c. Assets, liabilities, equity
d. All accounts with debit balances, then all accounts with credit balances

72. Adjusting entries are needed because an entity: *

1 point

a. Uses the cash basis of accounting rather than the accrual basis
b. Uses the accrual basis of accounting
c. Has earned revenue during the period by selling products from its central operations
d. Has expenses
Option 1

73. The adjusting entry at the end of the accounting year to reflect revenues earned
but not yet collected or recorded will: *
1 point

a. Increase assets
b. Decrease liabilities
c. Not affect income for the current period

d. Not affect assets

Option 1

74. Which of the following would most likely be found in an adjusting entry? *
1 point

a. Sales on account
b. Cash dividend paid
c. Prepaid expenses
d. Accounts receivable
Option 1

75. The last step in the accounting cycle is to *

1 point

a. Journalize and post adjusting entries

b. Prepare financial statements
c. Prepare the post closing trial balance
d. Journalize and post closing entries
Option 1

Submit
Page 1 of 1
Never submit passwords through Google Forms.
This content is neither created nor endorsed by Google. Report Abuse - Terms of Service - Privacy Policy

 Forms