T Level 1" Semester Midterm Exam (November 2021) (Fundamentals of Accounting 1) Model Number (1) Student name: Number: ....., Choose th ¢ correct answer for each question of the following: 1- Managers ‘*gerial accounting assists external users in the planning and control decision m: [A pgs making process: rue i: False =o A ial balance guarantee freedom from recording errors: rue B- False 3- External transactions involve economic events between the company and some other enterprises or party: A- True B- False 4- Normally the liability accounts have a debit balance: A- True B- False 5. Owner's Capital is increased by credits and decreased by debits: ‘A- True [__B- False \ & The historical cost principle dictates that companies record assets at their fair market value: B- False A- True Tayestment of cash in the business. increases total assets and owner's equit \- True = __[_ B- False jn the order in which accounts are with balance sheet accounts: innin}+ ‘A> Accounting entity B-Thegoingeoncern ‘Time period D- Monetary unit 12-The transaction that makes a decrease in assets and a decrease in owner"s | ity is: ‘A- Payment of office rent B- Incurred advertising expenses on account shased equipment on account ‘Received cash for services D- Pu performed {a Communication of economic events is the part of the accounting process that involv ‘A- identifying economic events: | B- quantifying transactions into dollars : D- recording and classi information, ‘C- preparing accounting reports | 14-Performing services on account is recorded as: ‘A- Debit Cash and credit Service | B- Debit Service Revenue and credit Revenue Accounts Receivable C- Debit Accounts Payable and | ‘D- Debit Accounts Receivable and credit Service Revenue credit Service Revenue 15:If total liabilities decreased by $45,000 and owner’s equity increased by $20,000 during a period of time, then total assets must change by what amount and direction during that same period? B- $65,000 decrease ‘A- $65,000 increase $25,000 increase D- $25,000 decrease following effect on the ‘components of the 16-Payment of Rent Expense has the B: Decrease in both assets and “owner's equity | _D- Decrease in both assets and AiabilitiesSS ___________ 18-Payment of $2,000 Accounts Payable makes a\an: ‘A- Increase in an asset $2000, and increase ina liability $2,000 C- Decrease in an asset $2000, and decrease in a liability $2,000 ‘B- Increase in an asset $2000, and a decrease in another asset 52,000 D- Decrease in a liability $2000, and increase in owner’s equity $2,000 19- During 2020, Lopez Company’s asset decreased $75,000, Its owner's equity. sts decreased $75,000 and its liabilities therefore: AY increased $75,000 B- decreased $150,000 C- decreased $75,000 D- did not change 20- Posting: ‘A- Is an optional step in the B- Usually occurs before journalizing recording process - © Transfers journal entries to D- Transfers ledger transaction data ledger accounts to the journal 2i- Journal entry for purchasing office equipment on account is: ‘A- Debit to Office Equipment and credit Cash B- Debit to Accounts Payable and credit Cash © Debit to Office Equipment and credit Accounts Payable D- Debit to Accounts Payable and Credit Office Equipment 22- GAAP stands for: ‘A> Generally Accepted Auditing B- Generally Accepted Accounting Principles Procedures © Generally Accepted Auditing D- Generally Accepted Accounting Procedures Principles ia Tas the following balances: $Cash Drawings $13,000, Rent Expense ‘Capital $30,000, Salaries Expense h the assumption that the out its objectives?25-Withdrawal of cash by owner for personal use has the following effect ‘A- Decrease in assets and liabilities B- Increase in assets and owner's equity G Decrease in assets and owner’s equity D- No effect 26-Collection of $5,000 Fees Receivable is recorded as: A- Debit Cash and credit Accounts Receivable by $5000 B- Debit Cash and credit Fees Receivable by $5000 C- Debit Fees Receivable and credit Cash by $5000 D- No entry required 27- During 2020, its first year of operation El Badr company had revenues $80,000 and expenses $45,000, owner drawings $17,000. What is the amount of owner’s equity at December 31, 2020: A- $35,000 B- $63000 C- $18,000 D- $52,000 28-The entire group of accounts maintained by a company is\are: A- The ledger B- The trial balance C- The general journal D- Financial statements 29-A debit of $500 was not posted to Salaries Expense. Correction of this error in the trial balance is: A- Add $500 to Cash B- Add $500 to Salaries Expense D- Deduct $500 from Salaries Payable