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Select the word/phrase which relates most closely to a business transaction:
A. Partnership
B. US Dollar
C. Payment of an expense

Ambria Company's assets are $240,000, and its liabilities are $90,000. What is the amount of its owner's
equity?
A. $150,000
B. $330,000
C. $50,000

Match the following definition with the appropriate term: "The process of producing accounting
information for the internal use of a company's management"
A. Managerial accounting
B. Fradulent financial reporting
C. Financial accounting

Identify which of the following is an asset:


A. Building
B. Salaries Payable
C. Owner's Withdrawals

At the beginning of the year, Palette Company's assets were $90,000, and its owner's equity was $50,000.
During the year, liabilities increased by $5,000 and the company had net income of $32,000, no
investments or withdrawals were made. What was the total assets at the end of the year?

A. $127,000
B. $122,000
C. $95,000

Daiichi Company's total assets and liabilities at the beginning and end of the year follow:

Determine Daiichi's net income or loss given that the owner made no investments in or withdrawals from
the business during the year.
A. Net income of $106,250
B. Net income of $6,250
C. Net loss of $6,250

Think of the three basic financial statements (income statement, balance sheet, statement of owner's
equity), which statement should be prepared last?
A. Statement of owner's equity
B. Income Statement
C. Balance Sheet
Dukakis Company had the following accounts and balances during 2014:
Service Revenue $13,200; Rent Expense $1,200; Wages Expense $8,340; Advertising Expense $1,350;
Utilities Expense $900; Owner's Withdrawals $700.
What was the amount of Net Income of Dukakis Company in 2014?
A. $11,790
B. $1,410
C. $3,810

Which of the following definitions describe the term "Ethics"?


A. The intentional preparation of misleading financial statements
B. A code of conduct that applies to everyday life
C. Regulates financial reporting of public companies and their auditors

Adam is a businessman who owns a few manufacturing companies. He invests $200,000 in Dotty PLC,
which he does not own, for an annual return of 12.5%. What type of stakeholder is Adam to Dotty PLC?

A. Internal management
B. External stakeholder with direct financial interest
C. External stakeholder with indirect financial interest

Which of the following accounts is an asset?


A. Accounts Payable
B. Supplies
C. Withdrawals

Which of the following events would be recognised and entered in accounting records of Lala Land
Company?
A. Lala Land Company receives a notice that its rent will increase by 20% next year
B. Lala Land Company receives its utility bill for the month of September, but the payment is not due until
next month.
C. Lala Land Company places an order for new office equipment

Harold's Car Service is a company that repairs cars. Analyze the following transaction to indicate which
account must be debited and which account must be credited.
"Harold paid for supplies purchased on credit last month."
A. Dr Accounts Payable; Cr Cash
B. Dr Cash; Cr Accounts Payable
C. Dr Supplies; Cr Cash

Which of the following accounts has a normal balance of a Debit?


A. Wages Payable
B. Design Revenue
C. Building
At the beginning of October, John opened a company by investing $15,000 to form the company.

Which of the following is a correct entry for the above transaction at the beginning of October?
A. Dr Owner's Investments by $15,000; Cr Cash by $15,000
B. Dr Cash by $15,000; Cr Owner's Investments by $15,000

The following definition describes an accounting concept. Which concept is being described?
"Refers to the decision as to when to record a business transaction."
A. Recognition
B. Valuation
C. Classification

A decrease in an asset is represented by a:


A. Debit
B. Credit

"A notation that records a single transaction in the chronological accounting record with a date, debit
account, debit amount, credit account, and credit amount" is called a:
A. Journal
B. T-account
C. Trial balance

Analyze the following transaction using T-account: "Melissa Faubert paid her utility bill of $72".

A.

B.

C.

Identify which of the following transactions was incorrectly recorded:


A. A purchase of equipment on credit was recorded as a Credit to the Cash account

B. A purchase of equipment on credit was recorded as a Credit to the Accounts Payable account

C. A purchase of equipment on credit was recorded as a Debit to the Equipment account

Which of the following concepts assumes expenses should be assigned to the accounting period in which
they are used to produce revenues?
A. Periodicity
B. Continuity
C. Accrual accounting
Below are the four conditions that must be met before revenue is recognised. Indicate which condition
has not been met in the following case:
"Company Alpha accepts a contract to perform services in the future for $4,000."
A. Condition 1: Persuasive evidence of an arrangement exists.
B. Condition 2: A product or service has been delivered.
C. Condition 3: The seller's price to the buyer is fixed or determinable.
D. Condition 4: Collectibility is reasonably ensured.

An examination of the Prepaid Insurance account shows a balance of $10,280 at the end of an accounting
period, before adjustment. At the end of the period, the insurance policy showed unexpired insurance of
$4,935. Which of the following adjusting entries should be made?
A. Increase Prepaid Insurance by $5,345; Increase Insurance Expense by $5,345
B. Increase Insurance Expense by $5,345; Decrease Prepaid Insurance by $5,345
C. Decrease Insurance Expense by $4,935; Increase Prepaid Insurance by $4,935

The Supplies account began the year with a balance of $380. During the year, supplies in the amount of
$980 were purchased. At the end of the year (December 31), the inventory of supplies on hand was $440.
What is the adjustment for supplies expense at the end of the year?

A.

B.

C.

The following information is provided about the Supplies account. Determine the amount indicated by the
question mark.
Supplies on hand at the beginning of the month: $264
Supplies purchased during the month: $52
Supplies consumed during the month: $194
Supplies on hand at the end of the month: ?
A. $18
B. $122
C. $510

Zodiac Company's income statement included the following expenses for 2014:
The related balance sheet account balances at year-end for last year and this year follow:

What is the amount of cash paid for rent during the year?
A. $13,200
B. $76,350
C. $37,200
D. $114,000

Match the following statement to the related concepts:


"Encompasses all the techniques that determine income for an accounting period"
A. periodicity
B. accrual accounting
C. permanent accounts
D. temporary accounts

In which of the following accounts would a revesing entry be helpful?

A. Supplies
B. Supplies Expense
C. Wages Payable
D. Wages Expense

Salinas Trailer Rental rents small trailers by the day for local moving jobs. Its adjusted trial balance at the
end of the current fiscal year follows.
Record the required 4 closing entries in the T-accounts given below.
State which of the following concepts is being followed in the case below:
"Management provides detailed information about the company's long-term debt in the notes to the
financial statements."
A. comparability
B. timeliness
C. full disclosure

Classify the following item to one component of a classified balance sheet:


"Trademark"
A. current asset
B. plant, property, equipment
C. intangible asset

Using the following information from a balance sheet and an income statement, compute Return On
Assets.

A. 40%
B. 15.38%
C. 16.67%

The accounts and balances that follow are from Kellman Company's general ledger. Compute the Working
Capital.

A. $22,640
B. $25,600
C. $73,600
Julio Company has had poor operating results for the past two years. As Julio's accountant, you have the
following information available to you. Select the correct statement related to the Profit Margin between
2013 and 2014.

A. Profit Margin was lower in 2013 compared to 2014 by 0.6 percentage points
B. There was no change in Profit Margin from 2013 to 2014
C. Profit Margin was lower in 2014 than in 2013 by 5.5%.

Which of the following concepts is being violated in the case that follows:
"A series of reports that are time-consuming and expensive to prepare are presented to the owner each
month, even though they are never used."
A. relevance
B. faithful representation
C. cost constraint
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Select the word/phrase which relates most closely to a separate entity:
A. Partnership
B. US Dollar
C. Payment of an expense

Dao Company's liabilities equal half of the owner's equity. The owner's equity is $40,000. What is the
amount of the total assets?
A. $120,000
B. $60,000
C. $20,000

Match the following definition with the appropriate term: "Activities of management engaged to obtain
adequate funds for beginning and continuing to operate a business"
A. Financing activities
B. Investing activities
C. Operating activities

Identify which of the following is a liability:


A. Building
B. Salaries Payable
C. Owner's Withdrawals

Dao Company's liabilities equal one-fifth of the total assets. The owner's equity is $40,000. What is the
amount of the liabilities?
A. $50,000
B. $40,000
C. $10,000

Daiichi Company's total assets and liabilities at the beginning and end of the year follow:

Determine Daiichi's net income or loss given that the owner made no investments in the business but
withdrew $27,500 during the year.
A. Net income of $6,250
B. Net income of $33,750
C. Net loss of 6,250

Think of the three basic financial statements (income statement, balance sheet, statement of owner's
equity), which statement should be prepared second?
A. Statement of owner's equity
B. Balance Sheet
C. Income Statement
Dukakis Company had the following accounts and balances during 2014:
Net Income $6,200; Investment by Owner $1,240; and beginning balance of owner's equity $1,000.
What was the ending balance of owner's equity of Dukakis Company in 2014?
A. $2,940
B. 3,650
C. $2,950

Which of the following definitions describe the term "Fraudulent financial reporting"?
A. The intentional preparation of misleading financial statements
B. A code of conduct that applies to everyday life
C. Regulates financial reporting of public companies and their auditors

Adam is a business student who has to write an assignment on financial performance of Dotty PLC. Dotty
PLC is a listed company that sells clothes. What type of stakeholder is Adam to Dotty PLC?

A. Internal management
B. External stakeholder with direct financial interest
C. External stakeholder with indirect financial interest

Which of the following accounts is an asset?


A. Accounts Payable
B. Supplies
C. Withdrawals

Which of the following events would not be recognised in accounting records of Lala Land Company?

A. Lala Land Company receives a notice that its rent will increase by 20% next year
B. Lala Land Company receives its utility bill for the month of September, but the payment is not due until
next month.
C. Lala Land Company receives office equipment that was ordered 2 weeks ago and makes immediate
payment

Harold's Car Service is a company that repairs cars. Analyze the following transaction to indicate which
account must be debited and which account must be credited.
"Harold received cash from customers billed last month."
A. Dr Accounts Receivable; Cr Cash
B. Dr Cash; Cr Accounts Receivable
C. Dr Cash; Cr Revenue

Which of the following accounts has a normal balance of a Debit?


A. Supplies
B. Design Revenue
C. Owner's Capital
At the beginning of October, John opened a company. He paid $3,000 for 2 months' office rent in advance.

Which of the following is a correct entry for the above transaction at the beginning of October?
A. Dr Prepaid Rent by $3,000; Cr Cash by $3,000
B. Dr Cash by $3,000; Cr Rent Expense by $3,000

The following definition describes an accounting concept. Which concept is being described?
"The process of assigning a monetary amount to business transactions and the resulting assets and
liabilities."
A. Recognition
B. Valuation
C. Classification

An increase in a liability is represented by a:


A. Debit
B. Credit

"A tool used to analyse transactions, but is not an official part of accounting records, where accountant
can record debits and credits" is called a:
A. Journal
B. T-account
C. Trial balance

Analyze the following transaction using a T-account: "Melissa Faubert received cash for nail salon services
of $600".

A.

B.

C.

Identify which of the following transactions was incorrectly recorded:


A. A withdrawal of cash was recorded as a Credit to the Cash account
B. A withdrawal of cash was recorded as a Debit to the Withdrawals account
C. A withdrawal of cash was recorded as a Debit to the Cash account

Which of the following concepts assumes a business will last for the foreseeable future?
A. Periodicity
B. Continuity
C. Accrual accounting
Below are the four conditions that must be met before revenue is recognised. Indicate which condition has
not been met in the following case:
"Company Beta ships products worth $6,000 to another company without an order from the other
company but tells the company it can return the products if it does not sell them."
A. Condition 1: Persuasive evidence of an arrangement exists.
B. Condition 2: A product or service has been delivered.
C. Condition 3: The seller's price to the buyer is fixed or determinable.
D. Condition 4: Collectibility is reasonably ensured.

Kindle Company has a five-day workweek and pays weekly salaries of $70,000 each Friday. Assuming June
1 falls on a Wednesday, then Monday (May 30) and Tuesday (May 31) must be accrued as Salaries Payable.
What would be the adjusting entry for the month of May on May 31?

A. Debit Salaries Expense by $28,000; Credit Salaries Payable by $28,000


B. Debit Salaries Payable by $28,000; Credit Salaries Expense by $28,000
C. Debit Salaries Expense by $14,000; Credit Salaries Payable by $14,000

The Prepaid Insurance account began the year with a balance of $460. During the year, insurance in the
amount of $1,040 was purchased. At the end of the year (December 31), the amount of insurance still
unexpired was $700. What is the adjustment for insurance expense at the end of the year?

A.

B.

C.

The following information is provided about the Supplies account. Determine the amount indicated by the
question mark.
Supplies on hand at the beginning of the month: $217
Supplies purchased during the month: ?
Supplies consumed during the month: $972
Supplies on hand at the end of the month: $436
A. $1,191
B. $1,625
C. $753

Zodiac Company's income statement included the following expenses for 2014:
The related balance sheet account balance at year-end for last year and this year follow:

What is the amount of cash paid for interest during the year?
A. $13,200
B. $76,350
C. $37,200
D. $114,000

Match the following statement to the related concepts:


"Accumulate from zero each accounting period"
A. periodicity
B. accrual accounting
C. permanent accounts
D. temporary accounts

Which of the following accounts, after adjustment, will most likely require reversing entries?
A. Salaries Payable
B. Accumulated Depreciation
C. Supplies

Carlton Tennis Club's adjusted trial balance at the end of its fiscal year follows.
Record the required 4 closing entries in the T-accounts given below.
State which of the following concepts is being followed in the case that follows:
"A company follows the policy of recognising a loss on inventory when the market value of an item falls
below its cost but does nothing if the market value rises."
A. comparability
B. conservatism
C. full disclosure
Classify the following item to one component of a classified balance sheet:
"Investment to be held for 6 months"
A. current asset
B. plant, property, equipment
C. intangible asset

Using the following accounts and balances taken from a year-end balance sheet, compute Working
Capital.

A. $10,500
B. $30,500
C. $24,000

The accounts and balances that follow are from Kellman Company's general ledger. Compute the Current
Ratio.

A. 3.07
B. 2.12
C. 1.72
Julio Company has had poor operating results for the past two years. As Julio's accountant, you have the
following information available to you. Select the correct statement related to the Return on Equity
between 2013 and 2014.

A. Return on Equity in 2013 was better than in 2014


B. Return on Equity was 12.2% in 2013, and 15.6% in 2014
C. Return on Equity cannot be calculated from the data given above

Which of the following concepts is being violated in the case that follows:

"A company changes its method of accounting for depreciation without adequate justification or notice."

A. consistency
B. faithful representation
C. cost constraint
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Select the word/phrase which relates most closely to a money measure:
A. Partnership
B. US Dollar
C. Payment of an expense

Palette Company's assets are $90,000, and its owner's equity was $50,000. What is the amount of the total
liabilities?
A. $140,000
B. $50,000
C. $40,000

Match the following definition with the appropriate term: "An intentional preparation of misleading financial
statements"
A. Managerial accounting
B. Fradulent financial reporting
C. Financial accounting

Identify which of the following is a part of owner's equity:


A. Building
B. Salaries Payable
C. Owner's Withdrawals

At the beginning of the year, Carmines Company had liabilities of $100,000 and owner's equity of $96,000. If
assets increased by $40,000 and liabilities decreased by $30,000, what was the owner's equity at the end of
the year?
A. $236,000
B. $166,000
C. $196,000

Daiichi Company's total assets and liabilities at the beginning and end of the year follow:

Determine Daiichi's net income or loss given that the owner invested $16,250 in the business but made no
withdrawals during the year.
A. Net loss of 16,250
B. Net loss of 6,250
C. Net loss of $10,000

Think of the three basic financial statements (income statement, balance sheet, statement of owner's
equity), which statement should be prepared last?
A. Statement of owner's equity
B. Balance Sheet
C. Income Statement
Dukakis Company had the following accounts and balances during 2014:
Cash $1,550; Accounts Receivable $750; Supplies $100; Land $1,000; Accounts Payable $450; Investment by
Owner $1,240; and beginning balance of owner's equity $1,000.
What was the total assets amount of Dukakis Company in 2014?
A. $3,400
B. $4,400
C. 3,850

Which of the following definitions describe the term "Management"?


A. Has a duty to ensure that financial reports are not false or misleading
B. A code of conduct that applies to everyday life
C. Regulates financial reporting of public companies and their auditors

Adam is a sales manager at Dotty PLC. He has to make day-to-day decisions about Dotty's operations. What
type of stakeholder is Adam to Dotty PLC?
A. Internal management
B. External stakeholder with direct financial interest
C. External stakeholder with indirect financial interest

Which of the following accounts is a revenue?


A. Accounts Payable
B. Fee Earned
C. Unearned Revenue

Which of the following events would NOT be recognised as a business transaction?


A. Company asks about the price of office supplies
B. Company receives office supplies and a bill for them
C. Company pays for office supplies that were received last week

Harold's Car Service is a company that repairs cars. Analyze the following transaction to indicate which
account must be debited and which account must be credited.
"Harold made a payment on accounts payable."
A. Dr Accounts Receivable; Cr Cash
B. Dr Cash; Cr Accounts Payable
C. Dr Accounts Payable; Cr Cash

Which of the following accounts has a normal balance of a Debit?


A. Revenue
B. Accounts Receivable
C. Owner's Capital

At the beginning of October, John opened a company.

He purchased 10 bicycles for $5,000, paying $2,400 immediately and agreeing to pay the rest next month.

Which of the following is a correct entry for the above transaction at the beginning of October?
A. Dr Equipment by $5,000; Cr Cash by $5,000
B. Dr Cash by $2,400; Cr Equipment by $2,400
C. Dr Equipment by $5,000; Cr Cash by $2,400; Cr Accounts Payable by $2,600

The following definition describes an accounting concept. Which concept is being described?
"The process of assigning all the transactions in which a business engages to appropriate categories, or
accounts."
A. Recognition
B. Valuation
C. Classification

A decrease in a liability is represented by a:


A. Debit
B. Credit

"A list of company's accounts, prepared periodically, used to ensure that the total of debits and credits in the
accounts are equal, meaning that the accounts balance" is called a:
A. Journal
B. T-account
C. Trial balance

Analyze the following transaction: "Melissa Faubert sold some products on credit for $250".

A.

B.

C.

Identify which of the following transactions was incorrectly recorded:


A. A cash payment for office supplies was recorded as a Credit to the Cash account
B. A cash payment for office supplies was recorded as a Debit to the Cash account
C. A cash payment for office supplies was recorded as a Debit to the Office Supplies account

Which of the following concepts assumes a business will last for the foreseeable future?
A. Periodicity
B. Going concern
C. Accrual accounting

Below are the four conditions that must be met before revenue is recognised. Indicate which condition has
not been met in the following case:
"Company Centric performs $20,000 of services for a firm with financial problems."
A. Condition 1: Persuasive evidence of an arrangement exists.
B. Condition 2: A product or service has been delivered.
C. Condition 3: The seller's price to the buyer is fixed or determinable.
D. Condition 4: Collectibility is reasonably ensured.

An examination of the Prepaid Insurance account shows a balance of $10,280 at the end of an accounting
period, before adjustment. At the end of the period, the insurance policy showed expired insurance of
$1,735. Which of the following adjusting entries should be made?
A. Increase Prepaid Insurance by $1,735; Increase Insurance Expense by $1,735
B. Increase Insurance Expense by $8,545; Decrease Prepaid Insurance by $8,545
C. Increase Insurance Expense by $1,735; Decrease Prepaid Insurance by $1,735

The depreciation expense on office equipment for the month of December is $100. The cost of the
equipment was originally $1,900. Depreciation for December has not been recorded yet. What is the
adjustment required at the end of December?

A.

B.

C.

The following information is provided about the Supplies account. Determine the amount indicated by the
question mark.
Supplies on hand at the beginning of the month: $196
Supplies purchased during the month: $174
Supplies consumed during the month: ?
Supplies on hand at the end of the month: $56
A. $314
B. $22
C. $78

Zodiac Company's income statement included the following expenses for 2014:

The related balance sheet account balance at year-end for last year and this year follow:
What is the amount of cash paid for salaries during the year?
A. $13,200
B. $76,350
C. $37,200
D. $114,000

Match the following statement to the related concepts:

"Concept that embodies assumption that life of business can be divided into accounting periods"

A. periodicity
B. accrual accounting
C. permanent accounts
D. temporary accounts

In which of the following accounts would a revesing entry be helpful?

A. Wages Expense
B. Supplies Expense
C. Supplies
D. Wages Payable

Villa Consultant Company's adjusted trial balance at the end of its fiscal year follows.
Record the required closing entries in the T-accounts given below.
State which of the following concepts is being followed in the case that follows:
"When several accounting methods are acceptable, management choose a single method and follows that
method from year to year."
A. consistency
B. conservatism
C. full disclosure

Classify the following item to one component of a classified balance sheet:


"Notes payable due in 90 days"
A. current asset
B. current liability
C. intangible asset

Using the following accounts and balances taken from a year-end balance sheet, compute Current Ratio.

A. 3.40
B. 4.00
C. 9.71

A company's simplified balance sheet and income statement follow. Compute the Asset Turnover.

A. 1.86
B. 0.11
C. 0.50

Julio Company has had poor operating results for the past two years. As Julio's accountant, you have the
following information available to you. Select the correct statement related to the Debt to Equity Ratio
between 2013 and 2014.
A. Debt to Equity Ratio has decreased from 2013 to 2014 by 0.36
B. Debt to Equity Ratio has increased from 2013 to 2014 by 0.28
C. Debt to Equity Ratio has decreased from 2013 to 2014 by 0.56

Which of the following concepts is being violated in the case that follows:
"A company changes its method of accounting for depreciation without indicating in the financial statements
that the method of depreciation was changed."
A. consistency
B. faithful representation
C. full disclosure
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Select the word/phrase which relates most closely to a separate entity:
A. Sole propriertorship
B. US Dollar
C. Payment of an expense

Carmines Company has liabilities of $100,000 and owner's equity of double the liabilities. What is the
amount of its assets?
A. $300,000
B. $200,000
C. $100,000

Match the following definition with the appropriate term: "The ability to earn enough income to attract
and hold investment capital"
A. Accounting
B. Profitability
C. Liquidity

Identify which of the following is a an asset:


A. Salaries Payable
B. Accounts Receivable
C. Owner's Withdrawals

Vivaldi Company had assets of $280,000 and liabilities of $120,000 at the beginning of the year, and assets
of $400,000 and liabilities of $140,000 at the end of the year. During the year, the owner invested an
additional $40,000 in the business, and the company made withdrawals of $48,000. What amount of net
income did the company earn during the year?
A. $108,000
B. $260,000
C. $148,000

Daiichi Company's total assets and liabilities at the beginning and end of the year follow:

Determine Daiichi's net income or loss given that the owner invested $12,500 in the business and
withdrew $27,500 during the year.
A. Net income of $33,750
B. Net loss of $6,250
C. Net income of $21,250

Think of the three basic financial statements (income statement, balance sheet, statement of owner's
equity), which statement should be prepared first?
A. Statement of owner's equity
B. Balance Sheet
C. Income Statement

Dukakis Company had the following accounts and balances during 2014:
Service Revenue $13,200; Rent Expense $1,200; Wages Expense $8,340; Advertising Expense $1,350;
Utilities Expense $900; Owner's Withdrawals $700.
What was the total expenses amount of Dukakis Company in 2014?
A. $11,790
B. $13,110
C. $12,410

Which of the following definitions describe the term "Sarbanes-Oxley Act"?


A. Has a duty to ensure that financial reports are not false or misleading
B. A code of conduct that applies to everyday life
C. Regulates financial reporting of public companies and their auditors

Adam is a tax regulator at the Ministry of Finance. His department oversees the tax compliance of
manufacturing companies in the region. Dotty PLC is one of these companies. What type of stakeholder is
Adam to Dotty PLC?
A. Internal management
B. External stakeholder with direct financial interest
C. External stakeholder with indirect financial interest

Which of the following accounts is an expense?


A. Accounts Payable
B. Supplies Expense
C. Unearned Revenue

Which of the following events would be recognised and entered in company's accounting records?

A. Company places an order for office supplies


B. Company receives office supplies and a bill for them
C. Company asks about the price of office supplies

Harold's Car Service is a company that repairs cars. Analyze the following transaction to indicate which
account must be debited and which account must be credited.
"Harold purchased supplies on credit."
A. Dr Supplies; Cr Cash
B. Dr Supplies; Cr Accounts Payable
C. Dr Accounts Payable; Cr Cash

Which of the following accounts has a normal balance of a Debit?


A. Cash
B. Accounts Payable
C. Owner's Capital
At the beginning of October, John opened a company.
He received $1,940 cash in cash for providing his services.
Which of the following is a correct entry for the above transaction at the beginning of October?
A. Dr Cash by $1,940; Cr Service Revenue by $1,940
B. Dr Service Revenue by $1,940; Cr Cash by $1,940

The following definition describes an accounting concept/rule. Which concept/rule is being described?

"Every economic transaction must be recorded with at least one debit and one credit, and the total
amount of the debits must equal the total amount of the credits."
A. Recognition
B. Double-entry system
C. Classification

A decrease in a owner's equity is represented by a:


A. Debit
B. Credit

"A list of company's transactions, prepared chronologically, used to record the details of all company's
transactions" is called a:
A. General journal
B. T-account
C. Trial balance

Analyze the following transaction: "Melissa Faubert withdrew $100 in cash from her own company".

A.

B.

C.

Identify which of the following transactions was incorrectly recorded:


A. A receipt of design revenue in cash was recorded as a Credit to the Cash account
B. A receipt of design revenue in cash was recorded as a Debit to the Cash account
C. A receipt of design revenue in cash was recorded as a Credit to Design Revenue account

Which of the following concepts assumes net income that is measured for a short period of time, such as
one quarter, or one year?
A. Periodicity
B. Going concern
C. Accrual accounting

Below are the four conditions that must be met before revenue is recognised. Indicate which condition
has not been met in the following case:

"Company Radiant agrees to work out a price later for services that it performs for another company."

A. Condition 1: Persuasive evidence of an arrangement exists.


B. Condition 2: A product or service has been delivered.
C. Condition 3: The seller's price to the buyer is fixed or determinable.
D. Condition 4: Collectibility is reasonably ensured.

Kindle Company has a five-day workweek and pays weekly salaries of $70,000 each Friday. Assuming June
1 falls on a Monday, then the next salary payment will occur on Friday (June 5). What would be the journal
entry to record this payment on June 3?
A. Debit Cash by $70,000; Credit Salaries Payable by $70,000
B. Debit Salaries Expense by $70,000; Credit Cash by $70,000
C. Debit Salaries Expense by $14,000; Credit Cash by $14,000

During the month of August, deposits in the amount of $1,100 were received for services to be
performed. By the end of the month, services in the amount of $760 had been performed. What is the
adjustment for Service Revenue at the end of August?

A.

B.

C.

The following information is provided about the Supplies account. Determine the amount indicated by the
question mark.
Supplies on hand at the beginning of the month: ?
Supplies purchased during the month: $1,928
Supplies consumed during the month: $1,632
Supplies on hand at the end of the month: $1,118
A. $822
B.$4,678
C.$3,560

Zodiac Company's income statement included the following expenses for 2014:
The related balance sheet account balance at year-end for last year and this year follow:

What is the amount of cash paid for supplies during the year?
A. $13,200
B. $76,350
C. $37,200
D. $114,000

Match the following statement to the related concepts:


"Have a balance that carries forward from one accounting period to another"
A. periodicity
B. accrual accounting
C. permanent accounts
D. temporary accounts

Reversing entry is an optional journal entry made on the first day of an accounting period.
A. True
B. False

Kilda Recreational Club's adjusted trial balance at the end of its fiscal year follows.
Record the required closing entries in the T-accounts given below.
State which of the following concepts is being followed in the case that follows:
"The company makes every effort to complete its financial statements within one week after the end of
the accounting period."
A. timeliness
B. conservatism
C. full disclosure
Classify the following item to one component of a classified balance sheet:
"Delivery Trucks"
A. current asset
B. plant, property, equipment
C. intangible asset

Using the following information from a balance sheet and an income statement, compute Profit Margin.

A. 40%
B. 15.38%
C. 16.67%

A company's simplified balance sheet and income statement follow. Compute the Debt to Equity Ratio.

A. 0.29
B. 0.23
C. 0.09

Julio Company has had poor operating results for the past two years. As Julio's accountant, you have the
following information available to you. Select the correct statement related to the Current Ratio between
2013 and 2014.
A. Current ratio of Julio Company has exceeded 7.0 in 2014
B. Current ratio of Julio Company has increased by 1.25 from 2013 to 2014
C. Current ratio of Julio Company has remained unchanged

Which of the following concepts is being violated in the case that follows:
"A classified balance sheet is prepared so that it will be more favourable for the business owners when
seeking external investment."
A. consistency
B. faithful representation
C. full disclosure