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Which of the following is not a liability
A) Unearned service revenue
B) Accounts payable
C) Accounts receivable
D) Interest payable
Ending retained earnings for a period is equal to beginning
A) Retained earnings + Net income + Dividends
B) Retained earnings - Net income - Dividends
C) Retained earnings + Net income - Dividends
D) Retained earnings - Net income + Dividends

C) Retained earnings + Net income - Dividends
Retained earnings at the end of the period is equal to
A) retained earnings at the beginning of the period plus net income minus liabilities
B) retained earnings at the beginning of the period plus net income minus dividends
C) Net income
D) Assets plus liabilities

B) retained earnings at the beginning of the period plus net income minus dividends
Which of the following statements is true
A) Amounts received from issuing stock are revenues
B) Amounts paid out as dividends are not expenses
C) Amounts paid out as dividends are reported on the income statement
D) Amounts received from issued stock are reported on the income statement.
B) Amounts paid out as dividends are not expenses
If the retained earnings account decreases from the beginning of the year to the end of the year,
then
A) Net income is less than dividends
B) There was a net income and no dividends
C) Additional investments are less than net losses
D) Net income is greater than dividends

A) Net income is less than dividends
Which financial statement is prepared first
A) Balance sheet
B) Income statement
C) Retained earnings statement
D) Statement of cash flows

B) Income statement
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Henson Company began the year with retained earnings of $330,000. During the year, the
company recorded revenues of $500,000, expenses of $380,000, and paid dividends of $40,000.
What was Henson's retained earnings at the end of the year?
A) $490,000
B) $410,000
C) $790,000
D) $450,000
B) $410,000
Ashley's Accessory Shop started the year with total assets of $140,000 and total liabilities of
$80,000. During the year the business recorded $220,000 in revenues, $110,000 in expenses, and
dividends of $40,000. Stockholders' equity at the end of the year was
A) $120,000
B) $110,000
C) $130,000
D) $70,000
C) $130,000
Ashley's Accessory Shop started the year with total assets of $140,000 and total liabilities of
$80,000. During the year the business recorded $220,000 in revenues, $110,000 in expenses, and
dividends of $40,000. The net income reported by Ashley's Accessory Shop for the year was
A) $80,000
B) $100,000
C) $130,000
D) $110,000
D) $110,000
f total liabilities decreased by $75,000 and stockholders' equity increased by $25,000 during a
period of time, then total assets must change by what amount and direction during that same
period?
A) $100,000 increase
B) $50,000 decrease
C) $50,000 increase
D) $75,000 decrease
B) $50,000 decrease
The balance sheet
A) summarizes the changes in retained earnings for a specific period of time
B) reports the changes in assets, liabilities, and stockholders' equity over a period of time
C) reports the assets, liabilities, and stockholders' equity at a specific date
D) presents the revenues and expenses for a specific period of time.

C) represents the assets, liabilities, and stockholders' equity over a period of time
Which of the following is not considered an asset
A) Equipment
B) Dividends
D) Inventory
B) Dividends
Liabilities are generally classified on a balance sheet as
A) Small liabilities and large liabilities
B) Present liabilities and future liabilities
C) Tangible liabilities and intangible liabilities
D) Current liabilities and long-term liabilities

D) Current liabilities and long-term liabilities
Equipment is classified on the balance sheet as
A) A current asset
B) Property, plant, and equipment
C) An intangible asset
D) A long-term investment
B) Property, plant, and equipment
What is the order in which assets are generally listed on a classified balance sheet?
A) Current and long-term
B) Current; property, plant and equipment; long-term investments; intangibles
C) Current; property, plant and equipment; intangibles; long-term investments
D) Current; long-term investments; property, plant and equipment, intangibles

D) Current; long-term investments; property, plant and equipment, intangibles
Dividends appear on
A) the retained earnings statement only
B) the income statement only
C) both the retained earnings statement and the balance sheet
D) the balance sheet only

A) the retained earnings statement only
Wilton Corporation had beginning retained earnings of $724,000 and ending retained earnings of
$833,000. During the year they issued common stock totaling $47,000. No dividends were paid.
What was Wilton's net income for the year?
A) $109,000
B) $62,000
C) $156,000
D) $131,000
A) $109,000
At December 31, 2014 Lowery Company had retained earnings of $2,384,000. During 2014 they
issued stock for $98,000, and paid dividends of $34,000. Net income for 2014 was $402,000.
The retained earnings balance at the beginning of 2014 was
A) $2,752,000
B) $2,016,000
C) $2,114,000
D) $2,654,000.
B) $2,016,000
The relationship between current assets and current liabilities is important in evaluating a
company's
A) Profitability
B) Liquidity
C) Market value
D) Solvency
B) Liquidity
The economic entity assumption states that economic events
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 every entity can be separately identified and accounted for

D) of every entity can be separately identified and accounted for
The TNT Company has five plants nationwide that cost $300 million. The current fair value of
the plants is $500 million. The plants will be reported as assets at
A) $200 million
B) $800 million
C) $300 million
D) $500 million
C) $300 million
An accountant has debited an asset account for $1,000 and credited a liability account for $500.
What can be done to complete the recording of the transaction?
A) Nothing further must be done
B) Debit a stockholders' equity account for $500
C) Debit another asset account for $500
D) Credit a different asset account for $500

D) Credit a different asset account for $500
An accountant has debited an asset account for $800 and credited a liability account for $700.
Which of the following would be an incorrect way to complete the recording of the transaction?
A) Credit an asset account for $100
B) Credit another liability account for $100

C) Credit a stockholders' equity account for $100
D) Debit a stockholders' equity account for $100

D) Debit stockholders' equity account for $100
A company that receives money in advance of performing a service
A) debits Cash and credits Unearned Service Revenue
B) debits Unearned Service Revenue and credits Accounts Payable
C) debits Cash and credits Prepaid Insurance
D) debits Cash and credits Accounts Receivable

A) debits Cash and credits Unearned Service Revenue
When a company performs a service but has not yet received payment, it
A) debits Service Revenue and credits Accounts Receivable
B) debits Accounts Receivable and credits Service Revenue
C) debits Service Revenue and credits Accounts Payable
D) makes no entry until cash is received

B) debits Accounts Receivable and credits Service Revenue
In the first month of operations, the total of the debit entries to the Cash account amounted to
$1,200 and the total of the credit entries to the Cash account amounted to $900. The Cash
account has a
A) $900 credit balance
B) $300 debit balance
C) $1,200 debit balance
D) $300 credit balance.

B) $300 debit balance
During January 2014, its first month of operation, Osborn Enterprises earned net income of
$1,700 and paid dividends to the owners of $500. At January 31, the balance in Retained
Earnings will be
A)$0
B) $1,700 credit
C) $1,200 credit
D) $500 debit.
C) $1,200 credit
On June 1, 2014, England Inc. reported a cash balance of $21,000. During June, England made
deposits of $8,000 and made disbursements totaling $24,000. What is the cash balance at the end
of June?
A) $5,000 credit balance
B) $29,000 debit balance
D) $3,000 credit balance

After transaction information has been recorded in the journal, it is transferred to the
A) Trial balance
B) Income statement
C) General journal'
D) Ledger
D) Ledger
Adjustments for accrued revenues
A) Increase assets and increase revenues
B) Increase assets and increase liabilities
C) Decrease assets and increase revenues
D) Decrease liabilities and increase revenues

A) Increase assets and increase revenues
Failure to prepare an adjusting entry at the end of the period to record an accrued expense would
cause
A) net income to be understated

B) an overstatement of assets and an overstatement of liabilities
C) an understatement of expenses and an understatement of liabilities
D) an overstatement of expenses and an overstatement of liabilities.

C) an understatement of expenses and an understatement of liabilities
Raxon Company borrowed $40,000 from the bank signing a 6%, 3-month note on September 1.
Principal and interest are payable to the bank on December 1. If the company prepares monthly
financial statements, the adjusting entry that the company should make for interest on September
30, would be
A) debit Interest Expense, $2,400; credit Interest Payable, $2,400
B) debit Interest Expense, $200; credit Interest Payable, $200
C) debit Note Payable, $2,400; credit Cash, $2,400
D) debit Cash, $600; credit Interest Payable, $600.

B) debit Interest Expense, $200; credit Interest Payable, $200
Mary Richardo 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 Mary make?
A) Debit Cash and credit Unearned Service Revenue
B) Debit Accounts Receivable and credit Unearned Service Revenue
C) Debit Accounts Receivable and credit Service Revenue
D) Debit Unearned Service Revenue and credit Service Revenue

C) Debit Accounts Receivable and credit Service Revenue

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Which of the following is not a liability

A) Unearned service revenue

Ending retained earnings for a period is equal to beginning

A) Retained earnings + Net income + Dividends

B) Retained earnings - Net income - Dividends

C) Retained earnings + Net income - Dividends

D) Retained earnings - Net income + Dividends

Retained earnings at the end of the period is equal to

D) Assets plus liabilities

Which of the following statements is true

A) Amounts received from issuing stock are revenues

B) Amounts paid out as dividends are not expenses

C) Amounts paid out as dividends are reported on the income statement

B) There was a net income and no dividends

C) Additional investments are less than net losses

D) Net income is greater than dividends

Which financial statement is prepared first

C) Retained earnings statement

D) Statement of cash flows

The balance sheet

A) summarizes the changes in retained earnings for a specific period of time

C) reports the assets, liabilities, and stockholders' equity at a specific date

D) presents the revenues and expenses for a specific period of time.

Which of the following is not considered an asset

Liabilities are generally classified on a balance sheet as

A) Small liabilities and large liabilities

B) Present liabilities and future liabilities

C) Tangible liabilities and intangible liabilities

D) Current liabilities and long-term liabilities

B) Property, plant, and equipment

A) Current and long-term

B) Current; property, plant and equipment; long-term investments; intangibles

C) Current; property, plant and equipment; intangibles; long-term investments

D) Current; long-term investments; property, plant and equipment, intangibles

B) the income statement only

C) both the retained earnings statement and the balance sheet

D) the balance sheet only

A) of different entities can be combined if all the entities are corporations

B) must be reported to the Securities and Exchange Commission

D) of every entity can be separately identified and accounted for

A) Nothing further must be done

B) Debit a stockholders' equity account for $500

C) Debit another asset account for $500

D) Credit a different asset account for $500

A) Credit an asset account for $100

B) Credit another liability account for $100

D) Debit a stockholders' equity account for $100

A) debits Cash and credits Unearned Service Revenue

B) debits Unearned Service Revenue and credits Accounts Payable

C) debits Cash and credits Prepaid Insurance

D) debits Cash and credits Accounts Receivable

A) debits Service Revenue and credits Accounts Receivable

B) debits Accounts Receivable and credits Service Revenue

C) debits Service Revenue and credits Accounts Payable

D) makes no entry until cash is received

A) $900 credit balance

B) $300 debit balance

C) $1,200 debit balance

D) $300 credit balance.

A) $5,000 credit balance

B) $29,000 debit balance

C) $5,000 debit balance

D) $3,000 credit balance

A) Increase assets and increase revenues