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QUIZ 1 13 ôn tập trắc nghiệm
Accounting (Trường Đại học Kinh tế Thành phố Hồ Chí Minh)
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QUIZ C1+2
1. The left side of an account is used to record which of the following?
a. Credits
b. Debit or credit, depending on the type of account
c. Increase
d. Debits
2. The following are all current assets: accounts receivable, inventories, prepaid expenses and
cash. Which is the least liquid?
a. Accounts receivable
b. Inventories
c. Prepaid expenses
d. Cash
3. Which of the following accounts is an asset account?
a. Rent expense
b. Rent payable
c. Prepaid rent
d. Unearned rental fees
4. Give an example of a transaction that has the following effects on the account equation: Increase
an asset and increase a liability.
a. Purchase an asset on account
b. Drawings
c. Sales of assets for cash
d. Paid an expense

5. A magazine publisher receives $12 million for annual subscriptions to a monthly magazine on
1 September. What will be the appropriate adjustment on the closing day 31 December if no
other transactions take place?
a. Dr Unearned Subscriptions and Cr Subscriptions Revenues for $4 million
b. Dr Prepaid Subscriptions and Cr Unearned Subscriptions for $1 million
c. Dr Prepaid Subscriptions and Cr Unearned Subscriptions for $4 million
d. Dr Unearned Subscriptions and Cr Subscriptions Revenues for $1 million
6. T&T Corporation completed a project for a client. The $8,000 fee for this project was billed to the
client in 2014, but will be collected in 2015. Is this revenue recorded in 2014? Which principle could
have been applied?
a. Historical cost
b. Going-concern
c. Profit recognition
d. Matching
7. Which of the following is an example of an accrual?
a. A commission earned but not yet recorded l7
b. Recording a cash sale
c. Depreciation of an asset
d. A commission collected but not yet earned l5
8. Stockholders’ equity is effected by the:
a. Purchase of an asset
b. Payment of a liability
c. Payment of dividends
d. Collection of accounts receivable

9. How would this transaction affect the entity’s accounting equation with a event: the entity
officially opened for business on 15th, Jan, 201X.
a. no effect
b. increase both asset and owners’ equity
c. increase both asset and liability
d. increase asset and decrease owners’ equity
10. Describe the suitable transaction according to the accounting equation:
Assets = Liabilities + Owners’ equity

-$8,000 -$8,000
a. Purchased a furniture for $8,000 on credit
b. the entity returned supplies purchased since previous days for the cost of those supplies, $8,000 l5
c. The entity paid for electricity and gas expenses, $8,000
d. The owner withdrew $8,000
11. The accounting principle that states recording expenses and revenues in the same period in
which they occur:
a. Matching
b. Historical cost
12. Assets and liabilities are listed on the balance sheet in order of their:
a. balance
b. purchase date
c. adjustments
d. liquidity
13. Posting is performed by transferring information from the
a. source documents to the journal.
b. ledger to the journal.
c. source documents to the ledger.
d. journal to the ledger.

14. Assume you prepay Get Fit Now for a package of six physical training sessions. Which type of
account should you have in your records?
a. Accrued revenue
b. Prepaid expense
c. Unearned revenue
d. Accrued expense
15. Sunil stated business on 1 July 201X with cash of $5,000. He has not yet prepared a full set of
financial statements. As at the end of his first reporting period, 30 June 201X+1, he has cash at bank
of
$1,726. He made sales of $33,498 during the period and paid expenses in cash of $19,385. He has no
outstanding creditors at the end of the period, and has no fixed assets or stock, but one customer
owes him $2,387.
Assuming Sunil made no other capital injections but took drawings of $15,000 in the period identify his
profit for the 12 month reporting period to 30 June 201X+1 and his net asset at the end of the period
on an accrual basic.
a. Net profit of $14,113, net assets of $1,726
b. Net profit of $14,113, net assets of $4,113
c. Net profit of $11,726, net assets of $4,113
d. Net profit of $11,726, net assets of $1,726
16. Which figure from a proprietorship’s statement of comprehensive income would appear in
its statement of financial position?
a. Net profit l12
b. Gross profit l3 l4
c. Revenue
d. Drawings
17. In double entry, which of the following statement is true?
a. Credit entries decrease liabilities and increase income
b. Debit entries decrease expenses and increase assets
c. Debit entries decrease income and increase assets
d. Credit entries decrease expenses and increase assets

18. Timothy McGreggor, Attorney, began the year with total assets of $129000, liabilities of $77000
and owners'equity of $52000. During the year the business earned revenue of $113000 and paid
expenses of
$34000. McGreggor also withdrew cash of $63000. How much is the business' equity at the year – end?
L5
a. $131,000
b. $165,000
c. $97,000
d. $68,000
19. Wages Payable were $700 at the end of June and $800 at the end of July. Wages Expense for July
was
$3,000. How much cash paid for wages during July?
a. $3,100
b. $2,900q
c. $2,800
d. $3,000
20. Which sequence correctly summarises the accounting process?
a. post to the journal, record to the ledger, prepare a trial balance
b. record to the ledger, post to the journal, prepare a trial balance
c. post to the journal, copy from the journal to the ledger, prepare a trial balance.
d. journalise transaction, post to the accounts, prepare a trial balance
21. In a period, sales are $140,000; purchases $75,000 and other expenses $25,000. What is the
figure for profit for the period to be transferred to the capital account?
a. $140,000
b. $65,000
c. $75,000
d. $40,000

22. The users of accounting information include the following:
a. Customers
b. Banks
c. All the answers are correct
d. Investors
23. Which of the following is the first step in the accounting process?
a. Post the journal to the ledger
b. Record the transaction
c. Analyze the source document
d. Prepare the trial balance
24. Consider the overall effects on Fossil of selling watches on credit for $64 000 and paying
expenses totalling $25 000. What is Fossil's profit or loss?
a. cannot determine from the data given
b. loss of $39 000
c. profit of $39000
d. profit of $64000
25. Pixel Copies recorded a cash collection on account by debiting Cash and crediting Accounts
payable. What will the trial balance show for this error?
a. the trial balance will not balance
b. too mush for liabilities
c. too much for cash
d. too much for expenses
26. Suppose Hunt Equipment has receivables of $65,000; furniture totaling $205,000 and cash of
$52,000. The business has a $109,000 bill payable and owes $81,000 on account. How much is Hunt’s
owners’ equity?
a. $132,000

27. Wombat plc is a retailer that owns no properties and only has fixtures and fittings, purchased
within the last six months, as non-current asset. The company has been experiencing trading
problems for some time. The directors have concluded that the company is no longer a going concern
and have changed the basic of preparing the financial statements to the break-up basic. Which of the
following will be the immediate effects of changing to the break-up basic?
a. A liquidator is appointed
b. All fixtures and fittings are transferred from non-current to current assets and valued at their
resale value.
c. The company ceases to trade
d. All fixtures and fittings are remained as non-current assets and valued at their resale value.
28. A debit entry in a T-account will:
a. Decrease capital
b. Decrease an asset
c. Increase an liability
d. Decrease an expense
29. Which of the following accounts is not closed during the closing procedure?
a. Income Summary
b. Retained Earnings
c. Interest Income
d. Rent Expense
30. Give an example of a transaction that has the following effects on the account equation: Decrease
an asset and decrease owner’s equity.
a. Collection of accounts receivable
b. Sale of asset for cash
c. Paid an expense
d. Sales of assets for cash

31. The business has cash of $8,000 and furniture that cost $9,000 and has a market value of $13,000.
Debts are accounts payable of $6,000. The owner business’ personal home is valued at $400,000 and
his personal bank account has a balance of $1,200. How much equity is in the business?
a. $19,000
b. $401,200
c. $11,000
d. $23,000
32 . Which of the following financial statements is concerned with the enterprise at a point in time?
a. Balance sheet
b. Statement of retained earnings
c. Cash flow statement
d. Income statement
33. Which of the following is least likely to be a user of a business' financial information?
a. Investors
b. Customers
c. Creditors
d. Australian Taxation Office
34. Which journal entry records your payment for the supplies purchased by $2,500?
a. Dr. Accounts payable / Cr. Cash $2,500
b. Dr. Accounts payable / Cr. Accounts receivable $2,500
c. Dr. Cash / Cr. Accounts payable $2,500
d. Dr. Supplies / Cr. Cash $2,500
35. Assume that Fossil sold watches at a profit of $48 000 to a department store on credit. How
would this transaction affect Fossil's accounting equation?
a. increase both liabilities and owners' equity by $48 000
b. increase both assets and owners' equity by $48 000

c. no effect on the accounting equation because the effects cancel out
d. increase both assets and liabilities by $48 000
36. Winn Ltd has opening accounts payable of $24,183 and closing accounts payable of $34,655.
Purchases for the period totaled $254,192 ($31,590 relating to cash purchases). Total payments
recorded in the payables ledger for the period were:
a. $243,720
b. $212,130
c. $264,664
d. $233,074
37. A proprietorship had receivables of $2,700 at 1 Jan and during Jan made cash sales of $7,200;
credit sales of $16,500 and received $15,300 from credit customers. The balance of receivables
account at the end of Jan was:
a. $1,500
b. $ 11,100
c. $ 8,700
d. $3,900
38. A credit entry in a T-account will:
a. Decrease capital
c. Increase an expense
d. Decrease a liability
39. Rental revenues were $100,000, and net income was $55,000. What was the amount of
total expenses?
a. $85,000
b. $75,000
c. $45,000
d. $100,000

40. Which of the following is source document that is recorded in an entity’s books of original entry?
a. Good received note
b. Purchase order to a supplier
c. Invoice to a customer
d. Delivery note to a customer
41. The cost of goods and services used in the process of generating revenue are called
a. assets
b. profits
c. liabilities
d. expenses
42. Accounting is the information system that:
a. processes data into reports
b. measures business activity
c. all of the above
d. communicates the results to decision makers
owners’ equity?
a. $190,000
b. $132,000
c. $28,000
d. $322,000
44. Fossil sells fashion wristwatches and leather goods. At the end of a recent year, Fossil's total
assets added up to $363 million and owners'equity was $228 million, How much did Fossil owe its
creditors?
a. $363 million
b. $228 million
c. $135 million
d. Cannot determine from the data given

45. Wombat plc is a retailer that owns no properties and only has fixtures and fittings, purchased
within the last six months, as non-current asset. The company has been experiencing trading
problems for some time. The directors have concluded that the company is no longer a going concern
and have changed the basic of preparing the financial statements to the break-up basic. Which of the
following will be the immediate effects of changing to the break-up basic?
a. All fixtures and fittings are remained as non-current assets and valued at their resale value.
b. All fixtures and fittings are transferred from non-current to current assets and valued at their
resale value.
c. A liquidator is appointed
d. The company ceases to trade
46. Partners’ equity is affected by the:
a. Collection of accounts receivable
b. Payment of a liability
c. Purchase of an asset
d. Drawings
a. Income Summary
b. Retained Earnings
c. Rent Expense
d. Interest Income
48. The ledger:
a. Summarise all transactions relating to receivables
b. Is the book of original entry for all transactions not recorded in journal entry
c. Summarise all transactions relating to payables
d. Summarise all the entity’s financial transactions

49. Michael Barry, Attorney, began the year with total assets of $126000, liabilities of $74000 and
owners' equity of $52000. During the year the business earned revenue of $110000 and paid
expenses of $33000. Barry also withdrew cash of $69000. How would Michael Barry record expenses
paid of $33 000?
a. Dr. Expenses / Cr. Cash $33,000
b. Dr. Cash / Cr. Expenses $33,000
c. Dr. Expense / Cr. Accounts payable $33,000
d. Dr. Accounts payable / Cr. Cash $33,000 (Đúng)
50. At 31 December 201X Richard’s total assets are $20,376 and his non-current liabilities are $10,000.
If his current liabilities are $6,290 then his capital balance at 31 December 201X must be:
a. $36,666
b. $16,666
c. $4,086
d. $24,086
51. A journal does NOT need to contain
a. The name of the ledger account to be debited
b. The name of the ledger account to be credited
c. The name of the book of original entry where the relevant source of document is recorded
d. Narrative
52. Which of the following accounting principles allows for an organization’s activities to be divided
into specific time periods such as a month, a quarter or a year?
a. Revenue Recognition Principle
b. Business Entity Principle
c. Accounting Period Principle
d. Matching Principle

53 The accounting principle that states companies and owners should be account for separately:
a. Going-concern
b. Revenue recognition
c. Historical cost
d. Business entity concept
54. The accounting equation can be written as:
a. Opening capital + profit – drawings – liabilities = assets
b. Assets – liabilities – opening capital + drawings = profit
c.Assets + profit – drawings – liabilities = closing capital
d. Assets – liabilities – drawings = opening capital + profit
55. Michael is the proprietor of a property management organization. Michael’s personal assets are
not recorded on the property management organization’s balance sheet. Which principle that best
matches:
a. Conservatism concept
b. Going concern assumption
c. entity concept
d. Cost principle

a. Decrease capital
c. Decrease a liability
d. Increase an expense

57. Assume that Fossil sold watches at a profit of $48 000 to a department store on credit. How
would this transaction affect Fossil's accounting equation?
a. increase both assets and liabilities by $48 000
b. no effect on the accounting equation because the effects cancel out
c. increase both assets and owners' equity by $48 000
d. increase both liabilities and owners' equity by $48 000
58. Your business purchased supplies of $2 500 on credit. The journal entry to record this transaction is:
a. Dr. Inventory/ Cr. Accounts payable $2,500
b. Dr. Accounts payable / Cr. Supplies $2,500
c. Dr. Supplies / Cr. Accounts receivable $2,500
d. Dr. Supplies / Cr. Accounts payable $2,500
59. Which transaction that has the following effects on the accounting equation: increase an asset
and increase owners’ equity?
a. Withdrew $1,000 for owner’s personal use.
b. Received cash on account
c. Received cash of $8,000 and gave capital
d. Purchased office furniture on credit, $400
owners’ equity?
a. $322,000
b. $132,000
c. $28,000
d. $190,000

61. A proprietorship had receivables of $2,700 at 1 Jan and during Jan made cash sales of $7,200;
credit sales of $16,500 and received $15,300 from credit customers. The balance of receivables
account at the end of Jan was:
a. $3,900
b. $1,500
c. $ 11,100
d. $ 8,700
a. Rent Expense
b. Interest Income
c. Income Summary
d. Retained Earnings
63. The balance sheet reports:
a. results of operations for a specific period
b. financial position on a specific date
c. results of operations on a specific date
d. financial position for a specific period
a. Increase an expense
b. Decrease a liability
c. Decrease an asset
d. Decrease capital
65. Which concept that best describes for the following situation: The account payable of $6,000 is
documented by a statement from the furniture company showing the business still owes $6,000 on
the furniture. The customer thinks he should only owe about $5,000. The accounts payable is
recorded at
$6,000.
c. Conservatism concept

66. Rental revenues were $15,000, total expenses were $45,000, and net income was $55,000.
What was the amount of other revenues?
a. $75,000
b. $85,000
c. $65,000
d. $100,000
67 Which concept or principle is based on the belief that accountants should record transactions
at amounts that can be verified?
a. Going concern assumption
b. Cost principle
c. Matching principle
d. Entity concept
68 Capital is the amount:
a. The entity owes to its creditors
b. The entity’s customer owe to it
c. The entity’s owners owe to it
d. The entity owes to its owners
69. business purchased supplies of $2 500 on credit. The journal entry to record this transaction is:
c. Dr. Supplies / Cr. Accounts payable $2,500
70. Winged Wheel Garage purchased a parcel of land on 3 January 2017 for $50,000. Its market
value at the end of 2017 was $55,000. Under AASBs, what value could the land be reported on the
balance sheet as of 3 January 2017? What value could the land be reported at on the 31 December
2017 balance sheet?
a. $50,000 - $50,000
b. $50,000 - $55,000
c. $55,000 - $50,000
d. $55,000 - $55,000

71A debit entry in a T-account will:
a. Increase an liability
b. Decrease capital
c. Decrease an asset
d. Decrease an expense
72Accounting standards in Australia are formulated by the:
a. Australian Securities and Investments Commission (ASIC)
b. CPA Australia (CPAA)
c. Australian Accounting Standards Board (AASB)
d. The Institute of Chartered Accountants in Australia (ICAA)
73Adebit balance of $300 brought down on A Ltd’s account in B Ltd’s journal means that
a. There is no relation between A Ltd and B Ltd.
b. A Ltd owns B Ltd $300
c. A Ltd owes B Ltd $300.
d. B Ltd owes A Ltd $300.

QUIZ 3+4
Question 1Which of the following is a liability?
a. Plant and machinery
b. Depreciation
c. Deferred revenue
d. Cash
Question 2Which of the following is not a closing entry?
a. Dr. Salary payable / Cr. Income summary
b. Dr. Income summary / Cr. Rent expense
c. Dr. Capital / Cr. Drawings
d. Dr. Service revenue / Cr. Income summary
Question 3Clean Water Softener Systems has cash of $600, receivables of $900 and supplies of $400.
Clean owes $500 on accounts payable and salary payable of $200. Clean's current ratio is
a. 2.71
Question 4Unearned revenue is always:
a. revenue
b. an asset
c. owners' equity because you collected the cash in advance
d. a liability
Question 5The Crazy Cat Company has a $2,000 payroll for a 5-day workweek starting on Monday and
ending on Friday when cash is paid for weekly wages. If the fiscal year ends on the Wednesday, what
will be the appropriate adjustment?
a. Dr Wages Expense $800 and Cr Wages Payable $800
b. Dr Wages Expense $1,200 and Cr Cash $1,200
c. Dr Wages Expense $1,200 and Cr Wages Payable $1,200

Question 6What do closing entries accomplish?
a. Zero out the revenues, expenses and drawings
b. All of statements mentioned
c. Transfer revenues, expenses and drawings to the Capital account
d. Bring the Capital account to its correct ending balance
Question 7
A business has paid $10,400 of insurance premiums during the year ended 31 March 20X7. At 1 April
20X6 there was an insurance prepayment of $800 and at 31 March 20X7 there was a prepayment of
$920. The insurance expense in the income statement for the year ended 31 March 20X7 is:
a. $10,280
Question 8
A petty cash fund is established in the amount of $100. The journal entry to replenish the petty cash
fund, assuming the fund is not over or short by any amount, would include
a. A debit to Cash $100 and a credit to Petty cash $100.
b. Debits for expenses paid from the fund and a credit to Petty cash.
c. A debit to Petty cash $100 and a credit to Cash $100.
d. Debits for expenses paid from the fund and a credit to Cash.
Question 9
Adjusting the accounts is the process of:
a. zeroing out account balances to prepare for the next period
b. recording transactions as they occur during the period
c. updating the accounts at the end of the period
d. subtracting expenses from revenues to measure profit or loss

Question 10
The capital of a proprietorship would change as a result of:
a. Personal petrol being paid for out of the business’s cash
b. A credit customer paying by cheque
c. Raw materials being purchased on credit
d. Non- current assets being purchased on credit
Question 11
Which situation indicates a profit within the Income statement column of the worksheet?
a. Total debit is greater than total credit
b. Total credit is less than total debit
c. Total debit is equal to total credit
d. Total credit is greater than total debit
Question 12
Which statement of closing the books is true:
a. This closing entry transfer total revenue to the credit side of the Income Summary account
b. Make the Income summary equal zero via the Drawings account.
c. Make the Drawing account equal zero via the Income summary account
d. Make the Capital account equal zero via the Income Summary account
Question 13
What are the distinctive features of accrual accounting and cash-basis accounting?
a. Cash-basis accounting records all transactions,
b. All the above are true.
c. Accrual accounting records only receivables, payables and depreciation.
d. Accrual accounting is superior because it provides more information,

Question 14
Which columns of the accounting worksheet show unadjusted amounts?
a. Adjustments
b. Trial balance
c. alance sheet
d. Income statement
Question 15
Which of the following statements concerning preparation of financial statement is true?
a. Non-current assets appear in the credit column of the statement of financial position
b. The statement of comprehensive income is the list of all the balances extracted from the
business’ accounts
c. The balance on income and expense accounts are brought down at the end of the accounting
period to be carried forward to the next accounting period.
d. Loss for the year is the credit entry in the statement of comprehensive income column in the
Adjusted trial balance.
Question 16
The purpose of the financial statement that lists an entity’s total assets and total capital/ liabilities is to
show:
a. The financial performance of the entity over a period of time. (v)
b. The amount of the entity could be sold for in liquidation
c. The amount of the entity could be sold for as a going concern
d. The financial position of the entity at a particular moment in time.
Question 17The adjusted trial balance shows:
a. revenues and expenses only
b. amounts that may be out of balance
c. assets, liabilities and owners' equity only
d. amounts ready for the financial statements

Question 18
Which of the following accounts is a liability?
a. Rent Expense (v)
b. None of above
c. Unearned Rental Fees
d. Prepaid Rent - t/s
Question 19
Liquidity is a measure of how quickly an item can be converted to cash, which of the statement is true?
a. accounts receivable is the least liquid asset.
b. cash is the least liquid asset.
c. accounts payable are usually less liquid than loans.
d. supplies are less liquid than accounts receivable.
Question 20
The Crazy Cat Company has a $1,800 payroll for a 5-day workweek starting on Monday and ending on
Friday when cash is paid for weekly wages. If the fiscal year ends on the Thursday, what will be the
appropriate adjustment?
a. Dr Wages Expense $1,440 and Cr Cash $1,440
b. Dr Wages Expense $1,440 and Cr Wages Payable $1,440
c. Dr Wages Expense $1,800 and Cr Wages Payable $1,800
d. Dr Wages Expense $360 and Cr Wages Payable $360
Question 21
Which of the following accounts may appear on a post-closing trial balance?
a. Cash, Salary payable and Salary expense
b. Cash, Service revenue and Salary expense
c. Cash, Salary payable and Capital
d. Cash, Salary payable and Service revenue

22 Get Fit Now gains a client who prepays $540 for a package of six physical training sessions. Get Fit
Now collects the $540 in advance and will provide the training later, After four training sessions, what
should Get Fit Now report on its income statement?
a. Service revenue of $540
b. Service revenue of $360
c. Cash of $180
d. Unearned service revenue of $360
23Office supplies had a beginning balance of $92. Purchases debited to Office Supplies during the year
amount to $414. A year-end inventory reveals Office supplies on hand of $82. Amount of used office
supplies for year-end adjustment would be
a. $424
b. $92
c. $82
d. $414
Question 24
Which of the following would be debit balance in the adjusted trial balance?
a. Sales revenue
b. Taxes payable
c. Accumulated depreciation
d. Prepaid rent
Question 25
Which of the following accounts is an accrual expense?
a. Unearned Rental Fees
b. Rent Expense
c. Prepaid Rent
d. Rent Payable

26Suhoza Companny accepts an advande fee of $200 for services Suhoza is to provide next year.
Suhoza’s entry to record this transaction would include a
a. Credit to Service Fees Earned
b. Credit to Unearned Service Fees
c. Debit to Accounts Receivable
d. Credit to Cash
Question 27
Supplies has a $10,000 unadjusted balance on your trial balance. At year-end you count supplies of
$6,000. What adjustment will appear on your
worksheet? a.Dr. Supplies $4,000
Cr. Supplies expense $4,000
b.Dr. Supplies expense $6,000
Cr. Supplies $6,000
c.Dr. Supplies expense $4,000
Cr. Supplies $4,000
d. No adjustment is needed because the Supplies account already has a correct balance.
Question 28
Why do a business close out the temporary accounts?
a. because the revenues, expenses and drawings accounts have balances that relate only to
one accounting period and do not carry over to the next period.
b. because the assets, liabilities and equity accounts have balances that relate only to one
accounting period and do not carry over to the next period
c. because the revenue accounts are made to equal zero via the Income summary account.
d. because the expense accounts are made to equal zero via the Income summary account.

29Which of the following accounts is not closed?
a. Depreciation expense
b. Accumulated depreciation
c. Service revenue
d. Drawings
30 What transaction is represented by the entries: debit rent expense, credit rent payable?
a. The issue of an invoice for rent to a tenant
b. The receipt of an invoice for rent payable by the business
c. The receipt of rental income by the business
d. The payment of rent by the business
Question 31
Which of the following would be a credit balance in the adjusted trial balance?
a. Salary expense
b. Interest payable
c. Prepaid insurance
d. Drawings
Question 32
Operating expenses include all of the following except
a. selling expense
b. cost of goods sold
c. delivery expense
d. none of these

Question 33
Assume that the weekly payroll of In the Woods Camping Supplies is $300. The end of the accounting
period, 31 December, falls on Tuesday, and In the Woods will pay its employee on Friday for the full
week. What adjusting entry will In the Woods make on Tuesday, 31 December? (Use five days as a full
work week.)
a. Dr. Salary expense / Cr. Salary payable $120
b. Dr. Salary payable / Cr. Salary expense $300
c. No adjustment is needed because the business will pay the payroll on Friday.
d. Dr. Salary expense / Cr. cash $180
Question 34
The profit recognition principle says:
a. Record revenue after you receive cash.
b. Record profit when revenues are earned and matched against expenses incurred
c. Cost is the basis of profit
d. Divide time into annual periods to measure revenue properly
Question 35
When preparing an adjusted trial balance what are the entries for the business’s profit?
a. Debit the statement of financial position column and the statement of comprehensive income.
b. Debit the statement of financial position column and credit the statement of comprehensive income
c. Credit the statement of financial position column and the statement of comprehensive income.
d. Credit the statement of financial position column and debit the statement of comprehensive
income. Question 35
Consider the steps in the accounting cycle: Which part of the accounting cycle provides information to
help a business decide whether to expand its operations?
a. Financial statements
b. Post-closing trial balance
c. Closing entries
d. Adjusting entries

Question 36
The current ratio is:
a. to measure the firm’s ability to pay its liabilities with its assets
b. calculated by total current liability/ total current assets
c. to measure the firm’s ability to pay its current liabilities with its current assets
d. better when it is lower than 1
Question 37
A company that rents an office paid cash for the current month’s rent $3,000. The entry to record this
transaction would include a
a. Credit to Rent Payable
b. Credit to Unearned Rent
c. Debit to Prepaid Rent
d. Debit to Rent Expense
Question 38
Unearned revenue is always:
a. an asset
b. owners' equity because you collected the cash in advance
c. a liability
d. revenue
Question 39
Which situation indicates a loss within the Income statement columns of the worksheet?
a. None is correct
b. Total credits exceed total debits
c. Total debits exceed total credits
d. Total debits equal total credits

Question 40
Which of the following accounts are permanent accounts:
a. Cash, service revenue, salary payable
b. Cash, salary payable, drawings
c. Cash, unearned revenue, salary payable, rent expense
d. Cash, salary payable, prepaid rent
CHAPTER 3:
1. What is distinctive features of accrual accounting and cash – basic accounting?
a. Accrual accounting records only receivables, payables and depreciation
b. Accrual accounting is superior beacause it provides more information
c. Cash-basic accounting records all transactions
d. All the above are true
2. The profit recognition principle says

a. Divide time into annual periods to measure revenue properly
b. Record profit when revenues are earned and matched against expenses incurred
c. Cost is the basic of profit
d. Record revenue after you receive cash
3. Adjusting the accounts is the process of:

a. Subtracting expenses from revenues to measure profit or loss
b. Recording transactions as they occur during the period
c. Updating the accounts at the end of the period
d. Zeroing out accounts balances to prepare for the next period
4. Which types of adjusting entries are natural opposites?

a. Profit or loss
b. Prepayments and accruals
c. Expenses and revenues
d. Prepayments and depriciation
5. Assume that the weekly payroll of In the Woods Camping Supplies is $300. The end of the
accounting period, 31 December falls on Tuesday and In the Woods will pay its employee
on Friday for the full week. What adjusting entry will In the Woods make on Tuesday, 31
December? (Use 5 days as a full work week)
a. Salary expense 120
Salary payable 120
b. Salary payable 300
Salary expense 300
c. Salary expense 180

Cash 180
d. No adjustment is needed because the business will pay the payroll on Friday
6. Get Fit Now gains a client who prepays $540 for the package of six physical training
sessions. Get Fit Now collects the $540 in advance and will provide the training later.
After four training sessions, what should Get Fit Now report on its income statement?
a. Service revenue of $360
b. Service revenue of $540
c. Unearned service revenue of $360
d. Cash of $180
7. Assume you prepay Get Fit Now for a package of six physical training sessions. Which
type of account should you have in your records?
a. Accrued revenue
b. Accrued expense
c. Prepaid expense
d. Unearned revenue
8. Unearned revenue is always:

a. Owner’s equity beacause you collected the cash in advance
b. Revenue
c. a liability
d. an asset
9. The adjusted trial balance shows

a. Amounts that may be out of balance
b. Amounts ready for the financial statements
c. Assets,liabilities and owner’s equity only
d. Revenues and expenses only
10. Accounting data how from the:

a. Income statement to the statement of changes in equity
b. Statement of changes in equity to the balance sheet
c. Balance sheet to the income statement
d. Both a and b are correct
CHAPTER 4
1. Consider the steps in the accounting cycle: Which part of the accounting cycle
provide information to help a business decide whether to expand its operations?
a. Post-closing trial balance
b. Adjusting entries
c. Closing entries
d. Financial statements

2. Which columns of the accounting worksheet show unadjustment amounts?
a. Adjustments
b. Trial balance
c. Income statement
d. Balance sheet
3. Which of the following accounts may appear on a post-closing trial balance?

a. Cash, Salary payable and Capital
b. Cash, Salary payable and Service revenue
c. Cash, Service revenue and Salary expense
d. Cash, Salary payable and Salary expense
4. Which situation indicates a loss within the Income statement column of the worksheet?
a. Total credits exceed total debits
b. Total debits equal total credits
c. Total debits exceed total credits
d. None of the above
5. Supplies has $10000 unadjusted balance on your trial balance. At year-end you
account supplies of $6000. What adjustment will appear on your worksheet?
a. Supplies 4000
Supplies expense 4000
b. Supplies expense 6000
Supplies 6000
c. Supplies expense 4000
Supplies 4000
6. Which of the following accounts is not closed?

a. Depreciation expense
b. Drawings
c. Service revenue
d. Accumulated deperciation
7. What do closing entries accomplish?

a. Zero out the revenues, expenses and drawings
b. Transfer revenues,expenses and drawings to the Capital account
c. Bring the Capital account to its correct ending balance
d. All of the above
8. Which of the following is not a closing entry?

a. Capital XXX
Drawings XXX
b. Service revenue XXX
Income summary XXX

c. Salary payable XXX
Income summary XXX
d. Income summary XXX
Rent expense XXX
9. Assets and liabilities are listed on the balance sheet in order of their:
a. Purchase date
b. Adjustments
c. Liquidity
d. Balance
10. Clean Water Softener Systems has cash of $600, receivables of $900 and supplies of
$400. Clean owes $500 on accounts payable and salary payable of $200. Clean’s current
ratio is
a. 2.71
CHAPTER 5
1. Which account does a retailer use that a service firm does not use?
a. Cost of sales
b. Inventory
c. Sales revenue
d. All of the above
2. The two main inventory accounting systems are the:

a. Perpetual and periodic
b. Purchase and sale
c. Returns and allowances
d. Cash and accrual
3. Ignoring GST. The journal entry for the purchase of inventory on credit is
a. Inventory XXX
Accounts receivable XXX
b. Accounts payable XXX
Inventory XXX
c. C
c. D
4. JC Manufacturing purchased inventory for $5300 and also paid a $260 freight
Manufacturing returned 45% of the goods to the seller an later took a 2% purchase Ignoring
GST, what is JC Manufacturing’s final cost of the inventory that it kept? ( Round answer to
the nearest whole number )
a. $2997
b. $2337
c. $3117

5. Suppose in one day JB Hi-Fi had sales of $300000 and sales returns of $45000. Cost of
sales was $152000. How much gross profit did JB Hi-Fi report for the day?
a. $148000
b. $103000
c. $255000
d. $88000
6. Suppose Dave’s Discount’s Inventory account showed a balance of $8000 before the year-
end adjustment. The physical count of goods on hand totalled $7400. Assuming errors of
recording were involved, Dave Marshall would make the following entry to adjust the
accounts:
a. Cost of sales 600
Inventory 600
b. Inventory 600
Accounts receivable 600
c. Accounts payable 600
Inventory 600
d. Inventory 600
Cost of sales 600
7. Which account in question 6 would Dave marshall close at the end of the year?
a. Cost of sales
b. Inventory
c. Accounts receivable
d. Accounts payable
8. The final closing entry for a proprietorship is

a. Sales revenue XXX
Income summary XXX
b. Capital XXX
Drawings XXX
c. Drawings XXX
Capital XXX
d. Income summary XXX
Expenses XXX
9. Which items both appear on a functional format income statement but do not appear on
a decriptive format income statement?
a. Gross profit and Net profit
b. Administrative expenses and Net sales
c. Cost of sales and Net sales
d. Administrative expenses and Cost of sales

10. Assume Juniper Natural Dyes mad net sales of $90000 and cost of sales totalled $58000
Average inventory was $17000. What was Juniper Natural Dyes’ gross profit percentage
for the period? (Round your aswer to the nearest whole per cent)
a. 36%
b. 3,4 times
c. 64%
d. 17%
CHAPTER 5+6
1 Treat the most recent purchases as the first units sold is:
a. specific unit cost method
b. FIFO
c. LIFO
d. average unit cost
Question 2: Assume Nile.com.au began April with 14 units of inventory that cost a total of $266.
During April Nile purchased and sold goods as follows:
Apr 8 Purchase 42 units @ $20
14 Sale 35 units @$40
22 Purchase 28 units @ $22

27 Sale 42 units @ $40
Under the FIFO method, Nile.com.au’s journal entry (entries) on 14 April is (are):
a. including 2 entries:
Cost of sale/ Inventory 686
Accounts Receivable/ Sale Revenue 1400
b. Accounts Receivable/ Inventory 686

c. Cost of sale/ Inventory 686
d. Accounts Receivable/ Sale Revenue 1400

4 Lexel Company sold goods for $1,000, term 2/10, n30. How much would Lexel receive if the account
were paid after the discount period?
a. $882
b. $900
c. $1,000
d. $980
Question 5: At 30 June 2015, Stevenson Supplies understates ending inventory. How does this error
affect cost of sales and net profit for 2015?
a. overstates both cost of sales and net profit
b. overstates cost of sales and understates net profit
c. understates cost of sales and overstates net profit
d. leaves both cost of sales and net profit correct because the errors cancel each other
Question 6: Under the perpetual inventory system, the entry to record the allowance of merchandise
inventory purchased on credit is:
a. Debit Accounts Payable and Credit Purchases
b. Debit Purchases and Credit Accounts Payable
c. Debit Accounts Payable and Credit Purchases Returns and Allowances
d. Debit Accounts Payable and Credit Inventory
7. The difference between gross sales and net sales is equal to
a. the sum of sales discounts and sales returns and allowances
b. sales discounts
c. the difference between sales discounts and sales returns and allowances
d. sales returns and allowances
Question 8: A customer takes advantage of a 2% sales discount on a $400 purchase. The entry to
record receipt of payment is:
Dr Cash $392; Dr Sales Discounts $8; Cr Accounts Receivable $400

Question 9: A company purchased goods for $600 and was given credit terms of 1/10, n60. Its entry
upon payment nine days later would include a credit to
a. Cash for $590
b. Cash for $600
c. Accounts Payable for $600
d. Inventory for $6
10. Suppose Supreme Clothing suffered a hurricane loss and needs to estimate the cost of the goods
destroyed. Beginning inventory was $94000, net purchases totalled $564000 and sales came to
$940000. Supreme's normal gross profit percentage is 55%. Use the gross profit method to estimate
the cost of the inventory lost in the hurricane.
a. $517000
b. $658000
c. $235000
Loss of inventory = Goods Available for sale - Estimated cost of goods sold
Loss of inventory = (94,000+564,000) - (940,000 - 517000)
*Loss of inventory = 235,000
Question 11: At 30 June 2014, Stevenson Supplies overstates ending inventory by $36 000. How does
this error affect cost of sales and net profit for 2014?
a. overstates cost of sales and understates net profit
b. understates cost of sales and overstates net profit
c. leaves both cost of sales and net profit correct because the errors cancel each other
d. overstates both cost of sales and net profit
Question 12: The two main inventory accounting systems are the:
a. perpetual and periodic
b. returns and allowances
c. purchase and sale
d. cash and accrual

Question 13: A merchandising business
a. earns income by buying and selling goods and services
b. can be either a wholesale or retail business
c. Both statements are false
d. Both statements are true
Question 14: Ignoring GST, the journal entry for the purchase of inventory on credit is:
a. Dr. Accounts payable / Cr. Inventory
b. Dr. Inventory / Cr. Cash
c. Dr. Inventory / Cr. Accounts payable
d. Dr. Inventory / Cr. Accounts Receivable
Question 15: Which items both appear on a functional format income statement but do not appear on
a descriptive format income statement?
a. Administrative expenses and Net sales
b. Cost of sales and Net sales
c. Gross profit and Net profit
d. Administrative expenses and Cost of sales
16 A business paid $35,000 for inventory that has become obsolete and whose current value is only
$12,000. A business should write down the inventory to $12,000. Which of principle(s) that business
follows:
a. comparability principle and conservatism principle
b. conservatism principle only
c. relevance principle and conservatism principle
d. materiality principle and conservatism principle
Question 17: The final closing entry for a proprietorship is:
a. Dr. Drawings/ Cr. Capital
b. Dr. Income summary / Cr. Expenses
c. Dr. Sales revenue / Cr. Income summary
d. Dr. Capital / Cr. Drawings


Suppose Nile.com.au used the average-cost method and the perpetual inventory system. Calculate the
average unit cost of the firm's inventory on hand at 8 April. Round unit cost to the nearest cent.
a. none of the above
b. $21.00
c. $19.50
d. $19.75
Question 19: Treat the oldest inventory purchases as the first units sold is:
a. LIFO
b. FIFO
c. average unit cost
d. specific unit cost method
Question 20: Estimated gross margin over the past five years of Nikki Bella Ltd. has been 70%. For the
current year, beginning inventory and net purchases, at cost were $60,000 and $340,000, respectively.
Net sales for the current year were $820,000. Using the gross profit method, estimated cost of ending
inventory is determined to be:
a. $120,000
b. $154,000
c. $246,000
d. $102,000

21. Assume Nile.com.au began April with 14 units of inventory that cost a total of $266. During April
Nile purchased and sold goods as follows:

Under the FIFO inventory method, how much is Nile's cost of sales for the sale on 14 April?
a. $1400
b. $1106
c. $686
d. $700
22. When inventory purchase cost is declining
a. there is no comparison between FIFO and Average cost method
b. FIFO method produces the higher net profit than Average cost method’s.
c. FIFO method produces the lower cost of sale than Average cost method’s.
d. FIFO method produces the lower net profit than Average cost method’s.
23. Which of the following is deducted from goods available for sale to determine cost of goods sold?
a. Ending inventory
b. Beginning inventory
c. Freight in
d. Purchases
24. A company purchased goods for $600 and was given credit terms of 1/10, n60. Its entry
upon payment fifteen days later would include a credit to
a. Purchase Discount for $6
b. Cash for $594
c. Accounts Payable for $600
d. Cash for $600

25. Which account does a retailer use that a service firm does not use?
a. Inventory
b. Cost of sales, Inventory and Sales revenue
c. Cost of sales
d. Sales revenue
26. Under the perpetual inventory system, the entry to record the allowance of merchandise
a. Debit Accounts Payable and Credit Purchases
b. Debit Accounts Payable and Credit Purchases Returns and Allowances
c. Debit Purchases and Credit Accounts Payable
d. Debit Accounts Payable and Credit Inventory
Question 27: Suppose Dave’s Discount's Inventory account showed a balance of $8000 before the
year- end adjustments. The physical count of goods on hand totalled $7400. Assuming errors of
recording were involved, Dave Marshall would make the following entry to adjust the accounts:
a. Dr. Cost of sales 600
Cr. Inventory 600
b.Dr. Inventory 600
Cr. Accounts receivable 600
c. Dr. Inventory 600
Cr. Cost of sales 600
d. Dr. Accounts payable 600
Cr. Inventory 600

Question 28: Merchandise costing $750 was sold on credit to Jaffes Company for $900. Five days later,
the business granted an allowance of $250 for sold merchandise. Under the perpetual inventory system,
the entry to record the allowance on sold merchandise inventories is:
a. Debit Inventory and Credit Cost of Sales for $300
b. Both of these
c. Debit Sales Returns and Allowances and Credit Accounts Receivable for $250
d. Neither of these
Question 29: When the retail method is used to estimate ending inventory, the business’s records
must show the beginning inventory
a. At neither of these
b. At both of these
c. At cost
d. At retail
Question 30: When inventory purchase cost is rising
a. FIFO method produces the higher cost of sale than Average cost method’s.
b. there is no comparison between FIFO and Average cost method
c. FIFO method produces the higher net profit than Average cost method’s.
d. FIFO method produces the lower net profit than Average cost method’s.
Question 31 T. Jackson had inventory that cost $ 1 300. The net realisable value of the inventory is
$750. Normal profit is $325. What value should Jackson show on the balance sheet for inventory?
a. $750
b. $1300
c. $1625
d. $1075

Question 32: JC Manufacturing purchased inventory for $5 300 and also paid a $260 freight bill. JC
Manufacturing returned 45% of the goods to the seller and later took a 2% purchase discount. Ignoring
GST, what is JC Manufacturing's final cost of the inventory that it kept? {Round your answer to the
nearest whole number.
a. $2997
b. $3117
c. $2857
d. $2337

After the purchase on 22 April, what is Nile's cost of the inventory on hand? Nile uses FIFO.
a. $1022
b. $1722
c. $1036
d. $616
Question 34: pring Cali Company sold goods for $1,000, term 2/10, n30. How much would Spring Cali
receive if the account were paid within the discount period?
a. $980
b. $882
c. $1,000
d. $900

Question 35: A customer takes advantage of a 2% sales discount on a $400 purchase. The entry made
by the customer to record payment is:
a. Dr Purchases Discounts $392; Cr Cash $392
b. Dr Accounts Payable $400; Cr Cash $392; Cr Inventory $8
c. Dr Accounts Payable $400; Cr Cash $392; Cr Sales Discounts $8
Question 36: Bullover Corp. had net retail sales of $380,000 during the current year. Beginning inventory,
net purchases and freight in, at cost, were $60,000, $320,000 and $20,000, respectively. Beginning
inventory and net purchases at retail were $80,000 and $420,000, respectively. What is the estimated
ending inventory at cost using the retail method?
a. $96,000
b. $18,000
c. $25,650
d. $35,000
Question 37: Which inventory costing method assigns to ending inventory the newest—the most recent
— costs incurred during the period?
a. specific unit cost
b. average cost
c. last in, first out (LIFO)
d. first in, first out (FIFO)
Question 38: For a given value of cost of goods available for sale.
a. The lower of ending inventory valuation, the lower of cost of goods sold
b. The higher of ending inventory valuation, the higher of cost of goods sold.
c. The higher of ending inventory valuation, the lower of cost of goods sold.
d. None of these.

Question 39: Suppose Dave’s Discount's Inventory account showed a balance of $8000 before the
year- end adjustments. The physical count of goods on hand totalled $7400. Which account would
Dave Marshall close at the end of the year?
a. Inventory
b. Accounts payable
c. Accounts receivable
d. Cost of sales
Chương 7 8
1. On 6 June 20XX, Pacific Importer sold goods to Turf Masters, receiving a 90-day, 10% bill for
$9,000. Which of the following item does Pacific Importer have?
a. None of them
b. Bill payable
c. Bill receivable
d. All of them
2. Federal Express bought four used Boeing planes. Each plane was worth $33 million, but the
owner sold the combination for $124 million. How much is FedEx's cost of each plane?
124/4=31
a. $30 million
b. $31 million
c. $132 million
d. $124 million
3. Failure to record depreciation at the end of the year will result in an:
a. Overstatement of total assets
b. Understatement of net income
c. Overstatement of total liabilities
d. Understatement of total liabilities

4 Fine company purchased a computer on January 2, 20X0, for $20,000. The computer has an estimated
residual value of $6,000 and an estimated useful life of 5 years. At the beginning of 20X2, the estimated
residual value changed to $2,000 and the computer is expected to have a remaining useful life of 2
years. Using the straight-line method, the depreciation expense for 20X2 is:
20x0-20x1 : (20-6)/5 *2 = 5.6 -> Carrying amout = 20-5.6= 14.4
20x2 : (14.4-2)/2 =6.2
a. $2,800 c. $3,500
b. $6,200 d. $3,600
5. With good internal controls, the person who handles cash can also:
a. account for cash receipts from customers
b. none of them
c. issue credits to customers for sales returns
d. account for cash payments
6. By using the accounts receivable ageing method, estimated uncollectible accounts are $70,000. If the
balance in Allowance for uncollectible accounts is a $5,000 credit before adjustment, what is the
amount of the adjustment for?
a. $70,000 credit
b. $65,000 credit
c. $75,000 debit
d. $75,000 credit
7. On 01 July 2017, Julie Autumn Company purchased equipment for $200,000 and the total
installation and testing costs were $20,000. The equipment has an estimated useful life of 10 years and
an estimated residual value of $20,000. If the firm uses the reducing-balance depreciation method (RB
depreciation rate = 2 x straight – line depreciation rate), the depreciation expense for the year end on
31 December 2017 is: 220* 2 * 1/10 * 6/12 = 22
a. $22,000
b. $9,000
c. $10,000
d. $20,000

8. On 30 April 2013, Commonwealth Bank loaned $80,000 to Chris Spanos on one year, 9% bill.
How much in total would Spanos pay the bank if he pays off the bill early – say, on 30 Nov 2013?
80 + 80 * 9% * 7/12 = 84.2
a. $84,200
b. $81,000
c. $87,200
d. $80,000
installation and testing costs were $20,000. The equipment has an estimated useful life of 10 years and
an estimated residual value of $20,000. If the firm uses the straight-line depreciation method, the
depreciation expense for the year end on 31 December 2017 is:
(200+20-20)/10 * 6/12 =10
a. $20,000
b. $10,000
c. $9,000
d. $22,000
10. Which method is likely to produce the most depreciation in the first year?
a. reducing balance
b. all produce the same total depreciation
c. straight line
d. units of production
11. A copy machine cost $40000 when new and has accumulated depreciation of $35000. Suppose
Quick Print scraps this machine, receiving nothing. What is the result of the disposal transaction?
a. loss of $35 000
b. gain of $5 000
c. loss of $5 000
d. no gain or loss

12. What is wrong with the direct write-off method of accounting for bad debts?
a. The direct write-off method overstates assets on the balance sheet,
b. The direct write-off method does not match expenses against revenue very well,
c. The direct write-off method does not set up an allowance for doubtful debts,
d. All of them
13. Bradley Company purchased a machine on June 30, 20X1, for $42,000. The machine had a
residual value of $12,000 and useful life of five years. The company’s fiscal year ends on 31
December. Using reducing-balance depreciation (RB depreciation rate = 2 x straight–line
depreciation rate), determine depreciation expense for 20X2:
20x1 : 42* 2 *1/5 * 6/12 =8.4
20x2 : (42- 8.4) * 2 *1/5 = 13.44
a. $14,000
b. $8,400
c. $9,600
d. $13,440
14. A customer of yours with an accounts receivable balance of $500 has filed for bankruptcy and will
not be making any future payments. Assuming that you use the allowance method, the entry you
make is:
a. Debit Allowance for uncollectible accounts and credit Uncollectible accounts expense.
b. Debit Uncollectible accounts expense and credit Accounts receivable.
c. Debit Uncollectible accounts expense and credit Allowance for uncollectible accounts.
d. Debit Allowance for uncollectible accounts and credit Accounts receivable.
15. At 30 June, you have a $10000 bill receivable from a customer. Interest of 8% has accrued for
six months on the bill. What will the income statement report for this situation?
a. nothing, because you haven't received the cash yet
b. bill receivable of $ 10 000
c. interest revenue of $400 (income statement report)
d. both of interest revenue of $400 and bill receivable of $10 000 (financial statement)

16. Your company uses the allowance method to account for bad debts. At the beginning of the
year, Allowance for doubtful debts had a credit balance of $1100. During the year you recorded
Bad debts expense of $3 000 and wrote off uncollectable receivables of $2100.
->Bal Credit : 2000
Your ending balance of Accounts receivable is $20000. Calculate the net realisable value of Accounts
receivable at year-end.
a. $19,000
b. $18,000
c. $20,000
d. $21,000
17. Your company uses the allowance method to account for bad debts. At the beginning of the
year, Allowance for doubtful debts had a credit balance of $1100. During the year you recorded Bad
debts expense of $3 000 and wrote off uncollectable receivables of $2100. What is your year-end
balance in Allowance for doubtful debts?
a. $3,200
b. $3,100
c. $2,000
d. $1,000
18. A copy machine cost $40000 when new and has accumulated depreciation of $35000. Suppose
Quick Print sold the machine for $5 000. What is the result of this disposal transaction?
a. gain of $3000
b. gain of $2 000
c. loss of $2 000
d. no gain or loss

19. A 90 - day, 10%, $18,000 note was received on 31 July. The company’s fiscal year ends August 31.
The entry to accrue interest on the note on 31 August is:
18000* 10% *31/360
a. Debit Interest Receivable $450, Credit Interest Revenue $450
b. Debit Cash $450, Credit Interest Revenue $450
c. Debit Interest Receivable $155, Credit Interest Revenue $155
d. Debit Interest Expense $155, Credit Interest Payable $155
20. Which intangible asset is recorded only as part of the acquisition of another business?
a. franchise
b. patent
c. copyright
d. goodwill
21. When is a revaluation increment credited to a revaluation surplus?
a. never, unless it reverses a previous decrement
b. never
c. always
d. always, unless it reverses a previous decrement
22. How should you record a capital expenditure?
a. debit a liability
b. debit an asset
c. debit an expense
d. debit capital

23. The result of recording a capital expenditure as an expense (a revenue expenditure) is an:
a. Understatement of current year’s expense
b. Understatement of subsequent year’s net income
c. Overstatement of current year’s net income
d. Overstatement of current year’s expense
25. At year-end, your company has cash of $ 10000, receivables of $50000, inventory of $40000 and
prepaid expenses totaling $5 000. Liabilities of $60 000 must be paid next year. What is your acid-
test ratio?
a. cannot be determined from the data given
b. 0.83
c. 1.67
d. 1.0
26. The entry to write - off an account receivable under the allowance method
a. increase the estimated net realizable value of accounts receivable.
b. decrease the estimated net realizable value of accounts receivable.
c. has no effect on the estimated net realizable value of accounts receivable.
d. affects the estimated net realizable value of accounts receivable, but without more
information the direction of the effect cannot be determined.
27. At year-end, your company has cash of $ 10000, receivables of $50000, inventory of $40000 and
prepaid expenses totaling $5 000. Liabilities of $60 000 must be paid next year. A year ago receivables
stood at $70000, and sales for the current year total $730 000. How many days did it take you to
collect your average level of receivables?
a. 30
b. 45
c. 35
d. 20

28. Compute the interest earned and determine which of the following does not equal the others.
Abc 30 d24
a. $1,000 for 90 days at 12%.
b. $1,000 for 120 days at 9%.
c. $1,200 for 60 days at 15%.
d. $1,200 for 120 days at 6%.
29. A truck costing $90,000 and having an estimated residual value of $9,000 and an original life of five
years is exchanged for a new truck. The cash price of the new truck is $114,000, and a trade-in
allowance of $45,000 is received. The old truck has been depreciated for three years using straight-line
method. How much is cash paid for getting the new truck?
a. $48,600
b. $69,000
c. $3,600
d. $114,000
30. 'Bad debts' are the same as:
a. neither of them
b. both of them
c. doubtful accounts
d. uncollectable accounts
31. When a fully depreciated asset is still in use:
a. Part of the depreciation should be reversed
b. The cost and accumulated depreciation should remain in the ledger and no more depreciation
should be taken
c. It should be written off the book
d. The cost should be adjusted to market value

32. An Asian Airline jet costs $28 million and is expected to fly 200 million kilometres during its 10-year
life. Residual value is expected to be zero because the plane was used when acquired. If the plane
travels 54 million kilometres in the first year, how much depreciation should Asian Airline record under
the units-of-production method?
a. $2.8 million
b. $7.56 million
c. $5.6 million
d. cannot be determined from the data given
33. Which method of estimating bad debts focuses on Bad debts expense for the
income statement?
a percentage of sales approach
b ageing of accounts approach
c net realisable value approach
d all of the above
34. Rye Company purchased a patent for $72,000. The patent is expected to have value for 10 years
even though its legal life is 18 years. The amortization for the first year is:
a. $7,200
b. $72,000
c. $4,000
d. $9,000
35. Which depreciation method would you prefer to use for income tax purposes? Why?
a. reducing balance because it gives the most total depreciation over the asset's life
b. units of production because it best tracks the asset's use
c. straight line because it is simplest
d. reducing balance because it gives the fastest tax deductions for depreciation

36. On 30 September 20XX, Ocean Importer sold goods to Sub Marine, receiving a 90-day, 10% bill for
$9,000. Which of the following items does Sub Marine have?
a. Bill Payable, Interest Expense
b. Bill Payable, Interest Revenue
c. Bill Receivable, Interest Expense
d. Bill Receivable, Interest Revenue
1/ The users of accounting information include the following:
a/ Banks c/ Investors
b/ Customers d/ All the answers are correct
2/ The accounting principle that states companies and owners should be account for
a/ Revenue recognition c/ Going-concern
b/ Business entity d/ Historical cost
4/ T&T Corporation completed a project for a client. The $8,000 fee for this project was billed to
the client in 2014, but will be collected in 2015. Is this revenue recorded in 2014? Which principle
could have been applied?
a/ Historical cost c/ Revenue recognition
b/ Matching d/ Going-concern
5/ The accounting principle that states recording expenses and revenues in the same period in
which they occur:
a/ Historical cost c/ Revenue recognition
b/ Matching d/ Going-concern
6/ Which of the following accounts is an asset account?
a/ Unearned Rental Fees c/ Rent Expense
b/ Prepaid Rent d/ Rent Payable

7/ Wages Payable were $700 at the end of June and $800 at the end of July. Wages Expense for July
was $3,000. How much cash paid for wages during July?
a/ $2,800 c/ $3,000
b/ $2,900 d/ $3,100
8/ A magazine publisher receives $12 million for annual subscriptions to a monthly magazine on 1
September. What will be the appropriate adjustment on the closing day 31 December if no other
transactions take place?
a/ Dr Unearned Subscriptions and Cr Subscriptions Revenues for $1 million
b/ Dr Unearned Subscriptions and Cr Subscriptions Revenues for $4
million c/ Dr Prepaid Subscriptions and Cr Unearned Subscriptions for $1
million7 d/ Dr Prepaid Subscriptions and Cr Unearned Subscriptions for $4
million
9/ The Crazy Cat Company has a $1,800 payroll for a 5-day workweek starting on Monday and
ending on Friday when cash is paid for weekly wages. If the fiscal year ends on the Thursday, what
will be the appropriate adjustment?
a/ Dr Wages Expense $1,440 and Cr Wages Payable
$1,440 b/ Dr Wages Expense $1,800 and Cr Wages
Payable $1,800 c/ Dr Wages Expense $360 and Cr Wages
Payable $360
d/ Dr Wages Expense $1,440 and Cr Cash $1,440
10/ Stockholders’ equity is affected by the:
a/ Payment of a liability c/ Payment of dividends
b/ Purchase of an asset d/ Collection of accounts receivable
11/ Which of the following financial statements is concerned with the enterprise at a point in time?
a/ Cash flow statement c/ Statement of retained earnings
b/ Income statement d/ Balance sheet

12/ Suhoza Companny accepts an advande fee of $200 for services Suhoza is to provide next year.
Suhoza’s entry to record this transaction would include a
a/ Credit to Cash c/ Credit to Unearned Service
Fees b/ Debit to Accounts Receivable d/ Credit to Service Fees Earned.
13/ Posting is performed by transferring information from the
a/ source documents to the journal. c/ source documents to the
ledger. b/ ledger to the journal. d/ journal to the ledger.
14/ The cost of goods and services used in the process of generating revenue are called
a/ expenses b/ assets c/ profits d/ liabilities
15/ Which of the following is the first step in the accounting process?
a/ Prepare the trial balance c/ Post the journal to the ledger
b/ Record the transaction d/ Analyze the source document
16/ Which of the following accounting principles allows for an organization’s activities to be divided
into specific time periods such as a month, a quarter or a year?
a/ Revenue Recognition Principle c/ Accounting Period
Principle b/ Matching Principle d/ Business Entity Principle
17/ Rental revenues were $15,000, total expenses were $45,000, and net income was $55,000.
What was the amount of other revenues?
a/ $75,000 b/ $85,000 c/ $65,000 d/ $100,000
18/ Which of the following accounts is not closed during the closing procedure?
a/ Retained Earnings b/ Income Summary c/ Rent Expense d/ Interest Income

19/ A company that rents an office paid cash for the current month’s rent $3,000. The entry to record
this transaction would include a
a/ Debit to Prepaid Rent c/ Credit to Unearned Rent
b/ Credit to Rent Payable d/ Debit to Rent Expense
20/ Office supplies had a beginning balance of $92. Purchases debited to Office Supplies during
the year amount to $414. A year-end inventory reveals Office supplies on hand of $82. Amount of
used office supplies for year-end adjustment would be
a/ $82 b/ $92 c/ $424 d/ $414
21/ Which of the following accounts is an expense account?
a/ Unearned Rental Fees c/ Rent Expense
b/ Prepaid Rent d/ Rent Payable
22/ Partners’ equity is affected by the:
a/ Payment of a liability c/ Drawings
b/ Purchase of an asset d/ Collection of accounts receivable
23/ The Crazy Cat Company has a $2,000 payroll for a 5-day workweek starting on Monday and
ending on Friday when cash is paid for weekly wages. If the fiscal year ends on the Wednesday,
what will be the appropriate adjustment?
a/ Dr Wages Expense $1,200 and Cr Wages Payable
$1,200 b/ Dr Wages Expense $2,000 and Cr Wages
Payable $2,000 c/ Dr Wages Expense $800 and Cr Wages
Payable $800
d/ Dr Wages Expense $1,200 and Cr Cash $1,200
24/ Rental revenues were $100,000, and net income was $55,000. What was the amount of total
expenses?
a/ $75,000 c/ $45,000 b/ $85,000 d/ $100,000

25/ Which of the following is an example of an accrual?
a/ A commission earned but not yet recorded c/ Depreciation of an
asset b/ A commission collected but not yet earned d/ Recording a cash sale
26/ Under the perpetual inventory system, which account is used to record purchases of
merchandises?
a/ Cost of goods sold b/ Purchases c/ Inventory d/ Accounts Payable
27/ Which of the following is deducted from goods available for sale to determine cost of goods sold?
a/ Ending inventory b/ Purchases c/ Freight in d/ Beginning inventory
28/ By using the accounts receivable ageing method, estimated uncollectible accounts are $70,000.
If the balance in Allowance for uncollectible accounts is a $5,000 credit before adjustment, what is
the amount of the adjustment for?
a/ $65,000 credit b/ $75,000 credit c/ $70,000 credit d/ $75,000 debit
29/ The difference between gross sales and net sales is equal to
a/ sales discounts
b/ sales returns and allowances
c/ the sum of sales discounts and sales returns and allowances
d/ the difference between sales discounts and sales returns and allowances
30/ A company purchased goods for $600 and was given credit terms of 1/10, n60. Its entry upon
payment nine days later would include a credit to
a/ Cash for $590 b/ Inventory for $6 c/ Cash for $600 d/ Accounts Payable for $600
31/ Lexel Company sold goods for $1,000, term 2/10, n30. How much would Lexel receive if the
account were paid after the discount period?
a/ $1,000 b/ $882 c/ $980 d/ $900

32/ A merchandising business
a/ earns income by buying and selling goods and
services b/ can be either a wholesale or retail business
c/ Both a/ and b/ are true
d/ Both a/ and b/ are false
33/ Compute the interest earned and determine which of the following does not equal the others.
a/ $1,000 for 90 days at
12%. b/ $1,200 for 60 days
at 15%. c/ $1,000 for 120
days at 9%.
d/ $1,200 for 120 days at 6%.
34/ Under the perpetual inventory system, the entry to record the return of merchandise inventory
purchased on credit is:
a/ Debit Purchases and Credit Accounts Payable
b/ Debit Accounts Payable and Credit Inventory
c/ Debit Accounts Payable and Credit Purchases Returns and
Allowances d/ Debit Accounts Payable and Credit Purchases
35/ A 90 - day, 10%, $18,000 note was received on 31 July. The company’s fiscal year ends August
31. The entry to accrue interest on the note on 31 August is:
a/ Debit Cash $450, Credit Interest Revenue $450
b/ Debit Interest Receivable $155, Credit Interest Revenue
$155 c/ Debit Interest Receivable $450, Credit Interest
Revenue $450 d/ Debit Interest Expense $155, Credit Interest
Payable $155

36/ Merchandise costing $750 was sold on credit to Jaffes Company for $900. Five days later, the
business granted an allowance of $250 for sold merchandise. Under the perpetual inventory system,
the entry to record the allowance on sold merchandise inventories is:
a/ Debit Inventory and Credit Cost of Sales for $300
b/ Debit Sales Returns and Allowances and Credit Accounts Receivable for $250
c/ Both of these
d/ Neither of these
37/ Operating expenses include all of the following except
a/ selling expense b/ delivery expense c/ cost of goods sold d/ none of these
38/ Freight in costs
a/ are included in the cost of sales section of the income statement
b/ are included in the cost of each inventory item
c/ appear as an operating expense on the income
statement d/ None of these
39/ Estimated gross margin over the past five years of Nikki Bella Ltd. has been 70%. For the current
year, beginning inventory and net purchases, at cost were $60,000 and $340,000, 12 respectively.
Net sales for the current year were $820,000. Using the gross profit method, estimated cost of
ending inventory is determined to be:
a/ $120,000 b/ $246,000 c/ $154,000 d/ $102,000
40/ A petty cash fund is established in the amount of $100. The journal entry to replenish the petty
cash fund, assuming the fund is not over or short by any amount, would include
a/ A debit to Petty cash $100 and a credit to Cash $100.
b/ Debits for expenses paid from the fund and a credit to Petty cash.
c/ Debits for expenses paid from the fund and a credit to Cash.
d/ A debit to Cash $100 and a credit to Petty cash $100.

41/ Which of the following would NOT dissolve a partnership:
a/ Death of a partner b/ Bankruptcy of a partner
c/ Retirement of a partner d/ Sale of partnership assets
42/ Under the perpetual inventory system, the entry to record the allowance of merchandise
a/ Debit Purchases and Credit Accounts Payable
b/ Debit Accounts Payable and Credit Inventory
c/ Debit Accounts Payable and Credit Purchases Returns and
Allowances d/ Debit Accounts Payable and Credit Purchases
43/ A company purchased goods for $600 and was given credit terms of 1/10, n60. Its entry upon
payment fifteen days later would include a credit to
a/ Cash for $594 b/ Purchase Discount for $6
c/ Cash for $600 d/ Accounts Payable for $600
44/ Spring Cali Company sold goods for $1,000, term 2/10, n30. How much would Spring Cali receive if
the account were paid within the discount period?
a/ $1,000 b/ $882 c/ $980 d/ $900
45/ Merchandise costing $750 was sold on credit to Jaffes Company for $1,000. Five days later, $150
of merchandise was returned. The cost of the returned merchandise was $115. Assuming the
perpetual inventory system is used, the entry to record the return of the merchandise is
a/ debit Inventory, $115; credit Cost of goods sold, $115.
b/ debit Sales Returns and Allowances, $150; credit Accounts Receivable, $150.
c/ both of these.
d/ neither of these.

46/ A customer takes advantage of a 2% sales discount on a $400 purchase. The entry to record
receipt of payment is:
a/ Dr Cash $392; Cr Accounts Receivable $392
b/ Dr Cash $392; Dr Sales Discounts $8; Cr Accounts Receivable $400
c/ Dr Cash $392; Dr Purchases Discounts $8; Cr Accounts Receivable $400
d/ Dr Cash $392; Dr Sales Discounts $392
47/ A customer takes advantage of a 2% sales discount on a $400 purchase. The entry made by the
customer to record payment is:
a/ Dr Accounts Payable $392; Cr Cash $392
b/ Dr Accounts Payable $400; Cr Cash $392; Cr Sales Discounts $8
c/ Dr Accounts Payable $400; Cr Cash $392; Cr Inventory
$8 d/ Dr Purchases Discounts $392; Cr Cash $392
48/ A company can help its cash flows by
a/ purchasing merchandise from suppliers with longer payment
terms. b/ reducing credit terms for sales.
c/ reducing its financing period.
d/ doing all of these.
49/ The entry to write - off an account receivable under the allowance method
a/ decrease the estimated net realizable value of accounts receivable.
b/ increase the estimated net realizable value of accounts receivable.
c/ has no effect on the estimated net realizable value of accounts receivable.
d/ Affects the estimated net realizable value of accounts receivable, but without more information the
direction of the effect cannot be determined.

50/ Bad debts expense is estimated to be 2% of net credit sales. Net credit sales of the period were
$600,000. The allowance for bad debts account has a credit balance of $10,000. The entry to record
the bad debts expense is:
a/ Dr Allowance for bad debts $2,000; Cr Bad debts expense $2,000
b/ Dr Bad debts expense $2,000; Cr Allowance for bad debts $2,000
c/ Dr Allowance for bad debts $12,000; Cr Bad debts expense
$12,000
d/ Dr Bad debts expense $12,000; Cr Allowance for bad debts $12,000
51/ For a given value of cost of goods available for sale.
a/ The lower of ending inventory valuation, the lower of cost of goods sold.
b/ The higher of ending inventory valuation, the lower of cost of goods
sold. c/ The higher of ending inventory valuation, the higher of cost of
goods sold. d/ None of these.
52/ Which inventory pricing method is best suited for the income statement?
a/ Whichever method is used for tax
purpose. b/ Average-cost
c/ First in – first out
d/ Specific unit cost.
53/ When the retail method is used to estimate ending inventory, the business’s records must show
the beginning inventory
a/ At cost b/ At retail c/ At both of these d/ At neither of these
54/ The gross profit method
a/ assumes the ratio of gross margin for a business remains relatively stable from year to
year b/ is usually used when the complete records are available
c/ determines inventory at retail and converts it to cost
d/ None of these.

55/ Bullover Corp. had net retail sales of $380,000 during the current year. Beginning inventory, net
purchases and freight in, at cost, were $60,000, $320,000 and $20,000, respectively. Beginning
inventory and net purchases at retail were $80,000 and $420,000, respectively. What is the
estimated ending inventory at cost using the retail method?
a/ $25,650 b/ $18,000 c/ $96,000 d/ $35,000
56/ Compute the interest earned and determine which of the following does not equal the others.
a/ $1,000 for 90 days at 12%. b/ $1,200 for 60 days at
15%. c/ $1,000 for 120 days at 9%. d/ $1,200 for 120 days at
6%.
57/ A 90 - day, 10%, $18,000 note was received on 31 July. The company’s fiscal year ends August
31. The entry to accrue interest on the note on 31 August is:
a/ Debit Cash $450, Credit Interest Revenue $450
b/ Debit Interest Receivable $155, Credit Interest Revenue
$155 c/ Debit Interest Receivable $450, Credit Interest Revenue
$450 d/ Debit Interest Expense $155, Credit Interest Payable
$155
58/ The entry to write - off an account receivable under the allowance method
a/ decrease the estimated net realizable value of accounts receivable.
b/ increase the estimated net realizable value of accounts receivable.
c/ has no effect on the estimated net realizable value of accounts receivable.
d/ Affects the estimated net realizable value of accounts receivable, but without more information the
direction of the effect cannot be determined.
59/ Bad debts expense is estimated to be 2% of net credit sales. Net credit sales of the period were
$600,000. The allowance for bad debts account has a credit balance of $10,000. The entry to record
the bad debts expense is:
a/ Dr Allowance for bad debts $2,000; Cr Bad debts expense $2,000
b/ Dr Bad debts expense $2,000; Cr Allowance for bad debts $2,000
c/ Dr Allowance for bad debts $12,000; Cr Bad debts expense
$12,000
d/ Dr Bad debts expense $12,000; Cr Allowance for bad debts $12,000

60/ A petty cash fund is established in the amount of $100. The journal entry to replenish the petty
cash fund, assuming the fund is not over or short by any amount, would include
a/ A debit to Petty cash $100 and a credit to Cash $100.
b/ Debits for expenses paid from the fund and a credit to Petty cash.
c/ Debits for expenses paid from the fund and a credit to Cash.
d/ A debit to Cash $100 and a credit to Petty cash $100.
61/ By using the accounts receivable ageing method, estimated uncollectible accounts are $70,000.
If the balance in Allowance for uncollectible accounts is a $5,000 credit before adjustment, what is
the amount of the adjustment for?
a/ $65,000 credit b/ $75,000 credit c/ $70,000 credit d/ $75,000 debit
62/ A customer of yours with an accounts receivable balance of $500 has filed for bankruptcy and
will not be making any future payments. Assuming that you use the allowance method, the entry
you make is
a/ Debit Uncollectible accounts expense and credit Allowance for uncollectible accounts.
b/ Debit Uncollectible accounts expense and credit Accounts receivable.
c/ Debit Allowance for uncollectible accounts and credit Accounts receivable.
d/ Debit Allowance for uncollectible accounts and credit Uncollectible accounts expense.
63/ On 01 July 2017, Julie Autumn Company purchased equipment for $200,000 and the total
installation and testing costs were $20,000. The equipment has an estimated useful life 17 of 10
years and an estimated residual value of $20,000. If the firm uses the straight-line depreciation
method, the depreciation expense for the year end on 31 December 2017 is:
a/ $9,000 b/ $22,000 c/ $10,000 d/ $20,000
64/ On 01 July 2017, Julie Autumn Company purchased equipment for $200,000 and the total
installation and testing costs were $20,000. The equipment has an estimated useful life of 10 years
and an estimated residual value of $20,000. If the firm uses the reducing-balance depreciation method
(RB depreciation rate = 2 x straight – line depreciation rate), the depreciation expense for the year end
on 31 December 2017 is:
a/ $9,000 b/ $22,000 c/ $10,000 d/ $20,000

65/ Depreciation:
a/ is an allocation of property, plant, and equipment cost to the periods such items are used, in a
systematic and rational manner.
b/ is a process of recognizing the decreasing value of an asset over time.
c/ is a cash expense d/ expense of $4,000 reflects a $4,000 increase in liquid funds.
66/ Bradley Company purchased a machine on June 30, 20X1, for $42,000. The machine had a
residual value of $12,000 and useful life of five years. The company’s fiscal year ends on 31
December. Using reducing-balance depreciation (RB depreciation rate = 2 x straight–line
depreciation rate), determine depreciation expense for 20X2:
a/ $8,400 b/ $9,600 c/ $13,440 d/ $14,000
67/ Failure to record depreciation at the end of the year will result in an
a/ Overstatement of total liabilities b/ Overstatement of total assets
c/ Understatement of net income d/ Understatement of total liabilities
68/ When a fully depreciated asset is still in
use: a/ The cost should be adjusted to market
value b/ Part of the depreciation should be
reversed18 c/ It should be written off the book
d/ The cost and accumulated depreciation should remain in the ledger and no more depreciation should
be taken
69/ At the end of March, the petty cash fund had a balance of $23. During the month, it was used to
purchase $42 of Petrol and $33 of Cleaning Supplies. The fund was established at $100. The journal
entry to replenish the fund is
a/ debit Petrol expense $42, debit Cleaning supplies expense $33 and credit Cash $75
b/ debit Petrol expense $42, debit Cleaning supplies expense $33 and credit Petty Cash $75
c/ debit Petrol expense $42, debit Cleaning supplies expense $33, debit Cash short and over $2 and
credit Cash $77
d/ A debit to Cash $100 and a credit to Petty cash $100

70/ Fine company purchased a computer on January 2, 20X0, for $20,000. The computer has an
estimated residual value of $6,000 and an estimated useful life of 5 years. At the beginning of 20X2,
the estimated residual value changed to $2,000 and the computer is expected to have a remaining
useful life of 2 years. Using the straight-line method, the depreciation expense for 20X2 is:
a/ $2,800 b/ $3,500 c/ $3,600 d/ $6,200
71/ The result of recording a capital expenditure as an expense (a revenue expenditure) is an:
a/ Overstatement of current year’s expense b/ Understatement of current year’s expense
c/ Overstatement of current year’s net income d/ Understatement of subsequent year’s net income
72/ A truck costing $90,000 and having an estimated residual value of $9,000 and an original life of
five years is exchanged for a new truck. The cash price of the new truck is $114,000, and a trade-in
allowance of $45,000 is received. The old truck has been depreciated for three years using straight-
line method. How much is cash paid for getting the new truck?
a/ $114,000 b/ $48,600 c/ $69,000 d/ $3,600
73/ A truck costing $90,000 and having an estimated residual value of $9,000 and an original life of
five years is exchanged for a new truck. The cash price of the new truck is $114,000, and cash paid is
$45,000. The old truck has been depreciated for three years using straightline method. How much is
the gain (or loss) for this transaction?
a/ Gain of $69,000 b/ Loss of $41,400 c/ Loss of $27,600 d/ Gain of $27,600
74/ Land containing a mine having an estimated 1,000,000 tons of economically extractable ore is
purchased for $375,000. After the ore deposit is removed, the land will be worth $75,000. If 100,000
tons of ore are mined and sold during the first year, the depletion cost charged to expense for the
year is:
a/ $300,000 b/ $37,500 c/ $30,000 d/ $375,000
75/ Rye Company purchased a patent for $72,000. The patent is expected to have value for 10 years
even though its legal life is 18 years. The amortization for the first year is:
a/ $72,000 b/ $7,200 c/ $4,000 d/ $9,00

Câu hỏi sách
Chap 1: The role of accounting in business
1. Which type of business organisation is owned by one owner?
proprietorship
2. Which of the following characteristics is most associated with a company?
limited liability of shareholders
Chap 2:
1. Your business purchased supplies of $2500 on credit. The Journal entry to record this transaction is:
Supplies 2500
Accounts payable 2500
2. The detalled record of the changes in a particular asset, liability or owners'equity is called:
an account
Chap 4:
1. Locate the following current and previous years' information for Woolworths (found in
the consolidated balance sheet);
Non-current liabilities
Chap 6:
1. Which of the following is most closely linked to accounting conservatism?

lower-of-cost-and-net-realisable-value rule
Chap 8
1. Which cost is not recorded as part of the cost of a building?

real estate commission paid to buy the building
2. Federal Express bought four used Boeing planes. Each plane was worth $33 million, but the
owner sold the combination for $124 million. How much is FedEx's cost of each plane?
$30 million

Chap7:
At year-end, your company has cash of $10000, receivables of $50000, inventory of $40000 and
prepaid expenses totalling $5000. Liabilities of $60000 must be paid next year. What is your acid- test
ratio?
1.00
Chap 9 current liabilities
1. Known possible liabilities of uncertain amounts should
be: a/ reported on the Income statement
b/ ignored (record them when paid)
c/ reported on the balance sheet
d/ reported only in the notes to the financial statements
2. On 1 January, you borrowed $10000 on a five-year, 8% note payable. At 31 December of that year,
you should record:
a/ interest payable of $800
b/ nothing (the note is already on the books)
c/ note receivable of $10000
d/ cash payment of $10000
3 Your business makes cash sales of $100 000 worth of goods (plus GST of 10%) and collected cash
up front. What current liability does the sale create?
a/ none
b/ unearned revenue of $10000
c/ GST payable of $10000
d/ sales revenue of $110000

4 At 31 December your business owes employees for three days of the five-day working week.
total payroll for the week is $8000. What journal entry should you make at 31 December?
a/ nothing, because you will pay the employees on Friday
b/ Salary expense 4800
Salary payable 4800
c/ Salary expense 8000
Salary payable 8000
d/ Salary payable 4800
Salary expense 4800
5. What is unearned revenue?
a receivable b current asset c revenue d current liability
6. Miele Appliances owed estimated warranty payable of $1000 at the end of 2014. During 2015,
Miele made sales of $100 000 and expects product warranties to cost 3% of the sales. During 2015,
Miele paid
$2500 for warranties. What is Miele's estimated warranty payable at the end of
2015? a/ $3500 b/ $2 500 c/ $2000 d/ $1 500
7. Payroll expenses include:
a/ salaries and wages b/ employee benefits
c/ Payroll tax d/ all
8. An employer must pay the Australian Taxation Office the amount
of: a/ optional deductions c/ income tax withheld
b/ required deductions d/ all of the above

9. The document that an employer gives each employee at the end of the year to report annual
earnings and taxes paid is the:
a/ payroll record c/ tax file number declaration form
b/ earnings record d/ PAYG payment summary
10. The foundation of internal control over payroll
is: a/ paying the correct amount of payroll tax
b/ separating payroll duties
c/ filing government tax forms on time
d/ accurately calculating gross pay, deductions and net pay
Chap 9 Non - current liabilities
1 A five-year, $100000, 6% unsecured note payable was issued on 1 January 2013. The note requires
principal payments of $20000 plus interest due each year with the first payment due on 31 December
2013. On 31 December 2014, immediately after the note payment, the balance sheet would show:
a/ $60000 in Non-current (Long-term) notes payable
b/ $6000 in Interest payable
c/ $20000 in Current portion of long-term notes payable and $6000 in Interest payable
d/ $40000 in Non-current (long-term) notes payable
2. Susan's trial balance shows $200 000 face value of debentures with a discount balance of $2000.
The debentures mature in 10 years. How will the debentures be presented on the balance sheet?
a/ Debentures payable $198 000 (net of $2000 discount) will be listed as a non-current liability.

3. Debentures payable with a face value of $400 000 and term of 10 years were issued on 1 January
2014 for $410000. On the maturity date, what amount will the business pay to debenture holders?
a/ $400 000 b/ $410 000 c/ b $390 000 d/ $10 000
4. Pattersons issued $200 000 of 4% serial debentures at face value on 31 December 2012. Half of the
debentures mature on 1 January 2015, while the other half of the debentures mature on 1 January
2020. On 31 December 2014, the balance sheet will show which of the following?
a/ Debentures payable of $200 000 will be listed as a non-current (long-term) liability.
b/ Debentures payable of $100 000 will be listed as a non-current (long-term) liability and debentures
payable of $100000 will be listed as a current liability.
c/ Debentures payable of $200 000 will be listed as a current liability.
d/ Debentures payable of $208 000 will be listed as a non-current (long-term) liability
5. Which of the following is the correct journal entry to record the issue of a $100 000 face
value debentures at 95?
d/ Cash 95 000
Discount on debentures 5000
Debentures payable 100 000
6 A $200000 debenture priced at 101.5 can be bought or sold
for: a/ $200 000 + interest c/ $3000
b/ $203 000 d/ $197000
7 Flipco issued a 10-year unsecured note payable on 1 January 2014 for $800 000. The note
requires annual principal payments each 31 December of $80000 plus interest at 5%. The entry to
record the annual payment on 31 December 2015 includes:
a a debit to lInterest expense for $36 000
b a debit to Interest expense for $40 000

8 Daniels' debentures payable carry a stated interest rate of 5% and the market rate of interest is
7%. The price of the Daniels debentures will be at:
a/ par value b/ a premium c/ maturity value d/ a discount
9. Nicholas Smith Fitness Gym has $700 000 of 20-year debentures payable outstanding. These
debentures had a discount of $56000 when issued, which was 10 years ago. The business uses
the straight-line amortisation method. The carrying amount of these debentures is:
a/ $672000 b $644 000 c/ $700 000 d/ $728000
10. Alan Smith Antiques issued its 7% 20-year debentures payable at a price of $846720 (maturity value
is $900000). The firm uses the stralght-line amortisation method for the debentures. Interest expense
for each year is:
a/ $65 664 b/ $60 336 c/ $63 000 d/ $59 270
Chapter 10: Parnership
1 How does a partnership get started?
a/ The partners reach an agreement and begin operations.
b/ The partners register with the Australian Securities and Investments Commission.
c/ The partners get a licence from the state government.
d/ All of the above.
2 Which characteristic identifies a partnership?
a/ limited personal liability c/ no business income tax
b/ unlimited life d/ all of the above

3 Abbott and Brown form a partnership. Abbott contributes $10000 cash and $40000 in inven-
tory. Brown contributes $5 000 in cash and land with a current market value of $30000 (cost of
$15000). Which of the following is correct?
a Brown, capital is credited for $20000.
b Brown, capital is credited for $35 000.
c/ Brown, capital is debited for $20 000.
d/ Brown receives a bonus of $30000 from Abbott.
4 The partnership of Abbot and Brown splits profits 1/4 to Abbot and 3/4 to Brown. There is no
provision for losses. The partnership has a loss of $200000. What is Brown's share of the loss?
a/ $50 000 b/ $200 000 c/ $150 000
d/ cannot be determined because the loss-sharing ratio is not given
5 Partner drawings:
a/ decrease partnership capital c/ decrease partnership profit
b/ increase partnership liabilities d/ increase partnership
capital
6 Charles pays $30000 to Steven to acquire Steven's $15 000 interest in a partnership. The journal
entry to record this transaction is:
a/ Charles, capital 15 000
Steven, capital 15 000
b/ Steven, capital 15 000
Charles, capital 15
000 c/ Steven, capital 30 000
Charles, capital 30 000
d/ Steven, capital 45 000
Charles, capital 45 000

7 Peter and Steve admit Meredith to their partnership, with Meredith paying $70000 more than
the book value of her equity in the new business. Peter and Steve have no formal profit-and-loss-
sharing agreement. What effect does admitting Meredith to the partnership have on the capital
balances of Peter and Steve?
a/ credit the Peter and Steve capital accounts for $35 000 each
b/ cannot be determined because there's no profit-and-loss
ratio c/ debit the Peter and Steve capital accounts for $35000
each
d/ credit the Peter and Steve capital accounts for $70000 each
8 Wright retires from the partnership of Edwards, Lee and Wright. The partners share profits and
losses in the ratio of 3:2:5. Wright's capital balance is $32 000 and he receives $37000 in final
settlement. What is the effect on the capital accounts of Edwards and Lee?
a/ Edwards' capital decreases by $3 000
b/ Edwards' capital decreases by $5 000
c/ Edwards' capital increases by $3000
d/ Lee's capital decreases by $5 000
9 The carrying value of the assets of the MLW partnership is $150000. In liquidation, the partner-
ship sells the assets for $174000. Partners M, L and W split profits equally. How should the
partnership account for the sale of the assets?
a/ debit cash for $174000
b/ increase each of the partners' capital accounts by $8000
c/ credit the assets for $150 000
d/ all of the above
10 Partnership financial statements report:
a/ total profit on the balance sheet
b/ revenues on the income
statement c/ liabilities on the income
statement d/ expenses on the
balance sheet

2. Winn Ltd has opening accounts payable of $24,183 and closing accounts payable of $34,655.
Purchases for the period totaled $254,192 ($31,590 relating to cash purchases). Total payments
recorded in the payables ledger for the period were:
A. $212,130 B. $233,074 C. $243,720 D. $264,664
4. The debt ratio:

A. measures a firm’s ability to pay its current liabilities with its current assets.
B. a business prefers to have a high debt ratio.
C. the perfect debt ratio is equal 1.
D. a low debt ratio is safer than a high debt ratio.
8. Yvette purchased some plant on 1 January 20X0 for £38,000. The payment for the plant was
correctly entered in the cash at bank account but was incorrectly entered on the debit side of the
plant repairs account.
Yvette charges depreciation monthly on the straight-line basis over five years and assumes no scrap value
at the end of the life of the asset.
How will Yvette’s profit for the year ended 31 March 20X0 be affected by the error?
A. Understated by £30,400 B. Understated by £36,100
C. Understated by £38,000 D. Overstated by £1,900
10. A business has net assets of £286,400 on 31 January 20X6 and had net assets of £266,800 on 31
January 20X5. During the year the owners of the business:
1. took goods for his own use which cost £10,000 and had a market value of £14,000;
2. introduced capital of £50,000; and
3. withdrew £30,000 as
salary. The profit for the year was:
A. £9,600 B. £30,400 C. £70,400 D. £109,600

9. Morse has the following note to its statement of financial position relating to plant and
machinery as at 31 May.
20X7 20X6
Cost £110,000 £92,000
Accumulated Depreciation 72,000 51,000
Carrying amount 38,000 41,000
During the year to 31 May 20X7, the following transactions occurred in relation to plant and machinery:
✓ Additions £39,000
✓ Loss on disposals £2,000
✓ Depreciation charge £27,000
What were the proceeds from disposals of plant and machinery received by Morse plc in the year to 31
May 20X7?
A. £7,000 B. £8,000 C. £13,000 D. £17,000
11. Franz plc is a manufacturer. Its 12-month reporting period ends on 31 July and it adopts the
average cost (AVCO) method of inventory usage and valuation. At 1 August 20X4 it held inventory
of 2,400 units of the material Zobdo, valued at £10 each. In the year to 31 July 20X5 there were the
following inventory movements of Zobdo:
14 November 20X4 Sales 900 units
28 January 20X5 Purchase 1,200 units for £20,100
7 May 20X5 Sales 1,800 units
What was the cost of Franz plc’s closing inventory of Zobdo at 31 July 20X5?
A. £11,700 B. £9,000 C. £15,075 D. £35,100
12. Lamp makes the following purchases in the year ending 31 December 20X9.
Units £/unit Total (£)
1 21.01.X9 100 12.00 1,200
2 30.04.X9 300 12.50 3,750
3 31.07.X9 40 12.80 512
4 01.09.X9 60 13.00 780
5 11.11.X9 80 13.50 1,080
At the year end 200 units are in inventory but 8 are damaged and are only worth £10 per unit. These are
identified as having been part of the 11.11.X9 delivery. Lamp operates a FIFO system for arriving at the
cost of inventory.

The figure for inventories at 31.12.X9 is:
A. £2,450 B. £2,525 C. £2,594 D. £2,700
13. A truck costing $90,000 and having an estimated residual value of $9,000 and an original life of
five years is exchanged for a new truck. The cash price of the new truck is $104,000, and a trade-in
allowance of $54,000 is received. The old truck has been depreciated for three years using straight-
line method. How much is cash paid for getting the new truck?
A. $114,000 B. $50,000 C. $69,000 D. $3,600
installation and testing costs were $40,000. The equipment has an estimated useful life of 10 years
and an estimated residual value of $20,000. If the firm uses the reducing-balance depreciation
method (RB depreciation rate = 2 x straight – line depreciation rate), the depreciation expense for
the year end on 31 December 2017 is:
A. $9,000 B. $22,000 C. $10,000 D. $54,000

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QUIZ 1 13 ôn tập trắc nghiệm

Accounting (Trường Đại học Kinh tế Thành phố Hồ Chí Minh)

Studocu is not sponsored or endorsed by any college or university

b. Debit or credit, depending on the type of account

3. Which of the following accounts is an asset account?

d. Unearned rental fees

a. Purchase an asset on account

c. Sales of assets for cash

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a. Dr Unearned Subscriptions and Cr Subscriptions Revenues for $4 million

b. Dr Prepaid Subscriptions and Cr Unearned Subscriptions for $1 million

c. Dr Prepaid Subscriptions and Cr Unearned Subscriptions for $4 million

d. Dr Unearned Subscriptions and Cr Subscriptions Revenues for $1 million

7. Which of the following is an example of an accrual?

a. A commission earned but not yet recorded l7

b. Recording a cash sale

d. A commission collected but not yet earned l5

8. Stockholders’ equity is effected by the:

d. Collection of accounts receivable

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b. increase both asset and owners’ equity

c. increase both asset and liability

d. increase asset and decrease owners’ equity

10. Describe the suitable transaction according to the accounting equation:

Assets = Liabilities + Owners’ equity

a. Purchased a furniture for $8,000 on credit

c. The entity paid for electricity and gas expenses, $8,000

d. The owner withdrew $8,000

13. Posting is performed by transferring information from the

a. source documents to the journal.

b. ledger to the journal.

c. source documents to the ledger.

d. journal to the ledger.

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a. Net profit of $14,113, net assets of $1,726

b. Net profit of $14,113, net assets of $4,113

c. Net profit of $11,726, net assets of $4,113

d. Net profit of $11,726, net assets of $1,726

a. Net profit l12

17. In double entry, which of the following statement is true?

a. Credit entries decrease liabilities and increase income

b. Debit entries decrease expenses and increase assets

c. Debit entries decrease income and increase assets

d. Credit entries decrease expenses and increase assets

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20. Which sequence correctly summarises the accounting process?

a. post to the journal, record to the ledger, prepare a trial balance

b. record to the ledger, post to the journal, prepare a trial balance

d. journalise transaction, post to the accounts, prepare a trial balance

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c. All the answers are correct

a. Post the journal to the ledger

b. Record the transaction

c. Analyze the source document

d. Prepare the trial balance

a. cannot determine from the data given

b. loss of $39 000

a. the trial balance will not balance

b. too mush for liabilities

c. too much for cash

d. too much for expenses

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c. The company ceases to trade