6) For a journal entry with only two lines, the following entry is valid: Increase in an asset, Increase in Dividends. A) True B) False
7) For a journal entry with only two lines, the following entry is valid: Increase in one Revenue, Increase in another Revenue. A) False B) True
8) For a journal entry with only two lines, the following entry is valid: Decrease in Owners’ Equity, Decrease in Expense. A) True B) False
9) If total change in cash = $44,000, net operating cash flows = $22,000, and net investing cash flows = ($13,000); then net financing cash flows = A) $35,000. B) $45,000. C) $15,000. D) $25,000.
10) For a journal entry with only two lines, the following entry is valid: Decrease in Revenue, Increase in Dividends. A) False B) True
11) Which of the following are made ONLY at year end (This question may have multiple answers) A) Adjusting Entries B) Closing Entries C) Transaction Entries
12) In the Allowance Method when we we collect on a previously written off receivable A) Assets stay the same, Net Income stays the same. B) Assets increase, Net Income increases. C) It depends D) Assets decrease, Net Income decreases
13) A company received an order from a customer in June for services to be provided. Those services were provided in July, and the customer paid the full amount in August. According to the revenue recognition principle, in which month should the company record revenue? A) June. B) August. C) Evenly over the three months. D) July.
14) Before the 1st step in the Operating Cycle, the firm has? A) Cash B) Receivable C) Inventory
15) The following financial information is from ABC: Accounts Payable $15,000 Buildings 80,000 Cash 10,500 Accounts Receivable 9,500 Sales Tax Payable 4,500 Retained Earnings 47,500 Supplies 40,000 Notes Payable (due in 18 months) 35,000 Interest Payable 3,000 Common Stock 35,000 What is the amount of current assets, assuming the accounts above reflect normal activity? A) $140,000. B) $20,000. C) $60,000. D) $175,000.
31) How many of the following events would require an expense to be recorded? Ordering office supplies Hiring a receptionist Paying employees’ salaries for the current month Receiving but not paying a current utility bill Paying for insurance in advance A) Three. B) Two. C) One. D) Four.
32) When a company makes an end-of-period adjusting entry that includes a credit to Prepaid Rent, the debit is usually made to: A) Cash. B) Rent Expense. C) Rent Receivable. D) Rent Payable.
33) Which of the accounts are increased with a debit and decreased with a credit? A) Liabilities, stockholders’ equity, and revenues. B) Assets, dividends, and expenses. C) Expenses, dividends, and stockholders’ equity. D) Dividends, liabilities, and assets.
34) Consider the following transactions: Issued common stock for cash. Purchased equipment by signing a note payable. Paid rent for the current month. Collected cash from customers on account. How many of these four transactions increased the given company’s total assets? A) Four. B) One. C) Three. D) Two.
35) Usually we measure Accounts Receivable at A) Benefit Value B) Sacrifice Value C) $0
36) For a journal entry with only two lines, the following entry is valid: Increase in a liability, Decrease in an Expense. A) True B) False
37) An example of an adjusting entry would not include: A) Recording unpaid salaries. B) Recording the expiration of prepaid insurance. C) Paying salaries to company employees. D) Recording the use of office supplies.
38) Which of the following best represents value created for stockholders during the current period? A) Retained earnings. B) Stockholders’ equity. C) Total assets. D) Net income.
39) When you develop an entry A) Debits are on top, Credits are on the bottom B) There is no required ordering of Debits and Credits C) Credits are on top, Debits are on the bottom