VNU-IS MDTERM TEST 1

---------- SEMESTER 2_ 2021- 2022

Student name: ……………………………… SUBJECT: PRINCIPLE ACCOUNTING
Time allowance: 90 minutes
Class: …………… Student No.: ………………..
Exam date: 2/6/2022
Instructions to candidates
This is a close-book examination.
___________________________________________________________________________
Problem I – Multiple choices (3 points)
Write down your answer in the Answer sheet.

No Answer No Answer No Answer No Answer

1 4 7 10

2 5 8

3 6 9

No Answer No Answer No Answer No Answer

11 14 17 20

12 15 18

13 16 19

1. Sue Smiley has performed $500 of CPA services for a client but has not billed the client
as of the end of the accounting period. What adjusting entry must Sue make?
a. Debit Cash and credit Unearned Revenue
b. Debit Accounts Receivable and credit Unearned Revenue
c. Debit Accounts Receivable and credit Service Revenue
d. Debit Unearned Revenue and credit Service Revenue
2. Clark Real Estate signed a four-month note payable in the amount of $8,000 on
September 1. The note requires interest at an annual rate of 9%. The amount of interest to
be accrued at the end of September is
a. $240.
b. $60.
c. $720.
d. $80.
3. The adjusted trial balance is prepared
 a. after financial statements are prepared.
b. before the trial balance.
c. to prove the equality of total assets and total liabilities.
d. after adjusting entries have been journalized and posted.
4. Employees at B Corporation are paid $5,000 cash every Friday for working Monday
through Friday. The calendar year accounting period ends on Wednesday, December 31.
How much salary expense should be recorded two days later on January 2?
a. $5,000
b. $3,000
c. None, matching requires the weekly salary to be accrued on December 31.
d. $2,000
5. On January 1, 2008, M. Johnson Company purchased equipment for $30,000.
The company is depreciating the equipment at the rate of $700 per month. The book
value of the equipment at December 31, 2008 is
a. $0.
b. $8,400.
c. $21,600.
d. $30,000.
6. At March 1, J.C. Retro Inc. reported a balance in Supplies of $200. During
March, the company purchased supplies for $750 and consumed supplies of $800.
If no adjusting entry is made for supplies
a. owner’s equity will be overstated by $800
b. expenses will be understated by
$750.
c. assets will be understated by $150.
d. net income will be understated by
$800.
7. The accounting process is correctly sequenced as
a. identification, communication, recording.
b. recording, communication, identification.
c. identification, recording, communication.
d. communication, recording, identification.
8. Which of the following would not be considered an internal user of accounting data for
the
XYZ Company?
a. President of the company
b. Production manager
c. Merchandise inventory clerk
d. President of the employees' labor union
9. Which one of the following is not an external user of accounting information?
a. Regulatory agencies
b. Customers
c. Investors
d. All of these are external users
10. The economic entity assumption requires that the activities
a. of different entities can be combined if all the entities are corporations.
b. must be reported to the Securities and Exchange Commission.
c. of a sole proprietorship cannot be distinguished from the personal economic events of its
owners.
d. of an entity be kept separate from the activities of its owner.
11. A small neighborhood barber shop that is operated by its owner would likely be
organized as a
a. joint venture.
b. partnership.
c. corporation.
d. proprietorship.
12. A business that enjoys limited liability is a
a. proprietorship.
b. partnership.
c. corporation.
d. sole proprietorship.
13. The basic accounting equation may be expressed as
a. Assets = Equities.
b. Assets – Liabilities = Owner's Equity.
c. Assets = Liabilities + Owner's Equity.
d. all of these.
14. Liabilities
a. are future economic benefits.
b. are existing debts and obligations.
c. possess service potential.
d. are things of value used by the business in its operation.
15. Owner's equity can be described as
a. creditorship claim on total assets.
b. ownership claim on total assets.
c. benefactor's claim on total assets.
d. debtor claim on total assets.
16. If total liabilities increased by $15,000 and owner’s equity increased by $5,000 during a
period of time, then total assets must change by what amount and direction during that
same period?
a. $20,000 decrease
b. $20,000 increase
c. $25,000 increase
d. $30,000 increase
17. As of June 30, 2008, Houston Company has assets of $100,000 and owner’s equity of
$5,000. What are the liabilities for Houston Company as of June 30, 2008?
18. Collection of a $500 Accounts Receivable
a. increases an asset $500; decreases an asset $500.
b. increases an asset $500; decreases a liability $500.
c. decreases a liability $500; increases owner's equity $500.
d. decreases an asset $500; decreases a liability $500.
19. A Statement of Financial position shows
a. revenues, liabilities, and owner's equity.
b. expenses, drawings, and owner's equity.
c. revenues, expenses, and drawings.
d. assets, liabilities, and owner's equity
20. The left side of an account is
a. blank.
b. a description of the account.
c. the debit side.
d. the balance of the account.

Problem II: (7 points)

Question 1 (4 points)
a

Instruction:
a. Journalize the adjusting entries
b. Prepare a ledger using T-account.
c. Prepare an adjusted trial balance on December 31, 2022
d. Prepare a income statement and a statement of financial position on December 31,
 2022

Question 2 (3 points)

Review the following sales transactions for Dish Mart and record any required journal entries.
Note that all sales transactions are with the same customer, Bella Davies.

Apr. 5 Dish Mart made a cash sale of 22 sets of cutlery to Bella Davies for $330 per set. The cost
per set to Dish Mart is $125 per set.

Apr. 9 Dish Mart sells 14 sets of cutlery to Bella Davies on credit for $345 per set. The cost per
set to Dish Mart is $120 per set. Terms of the sale are 2/15, n/60, invoice date April 9.

Apr. 13 Bella returns nine of the cutlery sets from the April 9 sale to Dish Mart for a full refund.
Dish Mart restores the cutlery to its inventory at the original cost of $120 per set.

Apr. 14 Bella purchases 18 sets of cutlery for $275 per set on credit, at a cost to Dish Mart of
$124 per set. Terms of the sale are 2/10, n/60, invoice date April 14.

Apr. 15 Bella discovers that 5 of the cutlery sets from the April 14 purchase and 10 of the
cutlery sets from the April 5 purchase are missing a few spoons but keeps them since Dish Mart
granted an allowance of $175 per set for all dish sets. Dish Mart and Bella have agreed to
reduce the amount Bella has outstanding instead of sending a separate check for the April 5
allowance in cash.

Apr. 28 Bella Davies pays her account in full for all outstanding purchases, less any returns,
allowances, and/or discounts.