ACC 101



NEW YORK STATE FBLAACCOUNTING I2011PLEASE DO NOT OPEN THIS TEST UNTIL DIRECTED TO DO SOTest DirectionsComplete the information requested on the answer sheet.PRINT YOUR NAME on the “Name” line.PRINT the name of the event, ACCOUNTING I on the “Subject” line.PRINT the name of your CHAPTER on the “DATE” line.All answers will be recorded on the answer sheet.Please do not write on the test booklet.Scrap paper will be provided.Read each question completely before answering. With a NO. 2 pencil, blacken in your choices completely on the answer sheet. Do not make any other marks on the answer sheet, or the scoring machine will reject it.You will be given 60 minutes for the test. You will be given a starting signal and a signal after 50 minutes have elapsed.Tie will be broken using the last 10 questions of the test. 1. GAAP stands for a. Generally Accepted Auditing Procedures. b. Generally Accepted Accounting Principles. c. Generally Accepted Auditing Principles. d. Generally Accepted Accounting Procedures. 2. The ACE Company has five plants nationwide that cost $200 million. The current market value of the plants is $500 million. The plants will be recorded and reported as assets at a. $200 million. b. $600 million. c. $400 million. d. $500 million. 3. 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. 4. 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. 5. A balance sheet 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. 6. An income statement a. summarizes the changes in owner's equity for a specific period of time. b. reports the changes in assets, liabilities, and owner's equity over a period of time. c. reports the assets, liabilities, and owner's equity at a specific date. d. presents the revenues and expenses for a specific period of time. 7. Which of the following payroll deductions is voluntary? a. Federal income tax. b. FICA. c. Medicare d. Union Dues 8. 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. 9. The right side of an account a. is the correct side. b. reflects all transactions for the accounting period. c. shows all the balances of the accounts in the system. d. is the credit side. 10. The normal balance of any account is the a. left side. b. right side. c. side which increases that account. d. side which decreases that account. 11. For the basic accounting equation to stay in balance, each transaction recorded must a. affect two or less accounts. b. affect two or more accounts. c. always affect exactly two accounts. d. affect the same number of asset and liability accounts. 12. In the first month of operations, the total of the debit entries to the cash account amounted to $800 and the total of the credit entries to the cash account amounted to $500. The cash account has a(n) a. $500 credit balance. b. $800 debit balance. c. $300 debit balance. d. $300 credit balance. 13. A journal provides a. the balances for each account. b. information about a transaction in several different places. c. a list of all accounts used in the business. d. a chronological record of transactions. 14. The procedure of transferring journal entries to the ledger accounts is called a. journalizing. b. analyzing. c. reporting. d. posting. 15. Jack Yates withdraws $300 cash from his business for personal use. The entry for this transaction will include a debit of $300 to a. Jack Yates, Drawing. b. Jack Yates, Capital. c. Owner's Salary Expense. d. Salaries Expense. 16. The revenue recognition principle dictates that revenue should be recognized in the accounting records a. when cash is received. b. when it is earned. c. at the end of the month. d. in the period that income taxes are paid. 17. The matching principle matches a. customers with businesses. b. expenses with revenues. c. assets with liabilities. d. creditors with businesses. 18. Jim's Tune-up Shop follows the revenue recognition principle. Jim services a car on July 31. The customer picks up the vehicle on August 1 and mails the payment to Jim on August 5. Jim receives the check in the mail on August 6. When should Jim show that the revenue was earned? a. July 31 b. August 1 c. August 5 d. August 6 19. Adjusting entries can be classified as a. postponements and advances. b. accruals and prepayments. c. prepayments and postponements. d. accruals and advances.20. Quirk Company purchased office supplies costing $4,000 and debited Office Supplies for the full amount. At the end of the accounting period, a physical count of office supplies revealed $1,600 still on hand. The appropriate adjusting journal entry to be made at the end of the period would be a. Debit Office Supplies Expense, $1,600; Credit Office Supplies, $1,600. b. Debit Office Supplies, $2,400; Credit Office Supplies Expense, $2,400. c. Debit Office Supplies Expense, $2,400; Credit Office Supplies, $2,400. d. Debit Office Supplies, $1,600; Credit Office Supplies Expense, $1,600. 21. Accumulated Depreciation is a. an expense account. b. an owner's equity account. c. a liability account. d. a contra asset account. 22. Hardy Company purchased a computer for $2,400 on December 1. It is estimated that annual depreciation on the computer will be $480. If financial statements are to be prepared on December 31, the company should make the following adjusting entry: a. Debit Depreciation Expense, $480; Credit Accumulated Depreciation, $480. b. Debit Depreciation Expense, $40; Credit Accumulated Depreciation, $40. c. Debit Depreciation Expense, $1,920; Credit Accumulated Depreciation, $1,920. d. Debit Office Equipment, $2,400; Credit Accumulated Depreciation, $2,400. 23. Meyer Realty Company received a check for $21,000 on July 1 which represents a 6-month advance payment of rent on a building it rents to a client. Unearned Rent was credited for the full $21,000. Financial statements will be prepared on July 31. Meyer Realty should make the following adjusting entry on July 31: a. Debit Unearned Rent, $3,500; Credit Rental Revenue, $3,500. b. Debit Rental Revenue, $3,500; Credit Unearned Rent, $3,500. c. Debit Unearned Rent, $21,000; Credit Rental Revenue, $21,000. d. Debit Cash, $21,000; Credit Rental Revenue, $21,000. 24. Depreciation is the process of a. valuing an asset at its fair market value. b. increasing the value of an asset over its useful life in a rational and systematic manner. c. allocating the cost of an asset to expense over its useful life in a rational and systematic manner. d. writing down an asset to its real value each accounting period. 25. In computing depreciation, the number of years of useful life of the asset is a. known with certainty. b. an estimate. c. always fixed at 5 years. d. always fixed at 3 years. 26. The difference between the cost of a depreciable asset and its related accumulated depreciation is referred to as the a. market value of the asset. b. blue book value of the asset. c. book value of the asset. d. depreciated difference of the asset. 27. Unearned revenue is classified as a. an asset account. b. a revenue account. c. a contra-revenue account. d. a liability. 28. White Laundry Company purchased $6,500 worth of laundry supplies on June 2 and recorded the purchase as an asset. On June 30, an inventory of the laundry supplies indicated only $3,000 on hand. The adjusting entry that should be made by the company on June 30 is a. Debit Laundry Supplies Expense, $3,000; Credit Laundry Supplies, $3,000. b. Debit Laundry Supplies Expense, $3,500; Credit Laundry Supplies, $3,000. c. Debit Laundry Supplies, $3,500; Credit Laundry Supplies Expense, $3,500. d. Debit Laundry Supplies Expense, $3,500; Credit Laundry Supplies, $3,500. 29. Closing entries are necessary for a. permanent accounts only. b. temporary accounts only. c. both permanent and temporary accounts. d. permanent or real accounts only. 30. A post-closing trial balance is prepared a. after closing entries have been journalized and posted. b. before closing entries have been journalized and posted. c. after closing entries have been journalized but before the entries are posted. d. before closing entries have been journalized but after the entries are posted. 31. A post-closing trial balance will show a. only permanent account balances. b. only temporary account balances. c. zero balances for all accounts. d. the amount of net income (or loss) for the period. 32. A current asset is a. the last asset purchased by a business. b. an asset which is currently being used to produce a product or service. c. usually found as a separate classification in the income statement. d. expected to be realized in cash, sold or consumed within one year of the balance sheet or the company's operating cycle, whichever is longer. 33. An intangible asset a. derives its value from the rights and privileges it provides the owner. b. is worthless because it has no physical substance. c. is converted into a tangible asset during the operating cycle. d. cannot be classified on the balance sheet because it lacks physical substance. 34. 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. 35. Sales revenue less cost of goods sold is called a. gross profit. b. net profit. c. net income. d. marginal income. 36. After gross profit is calculated, operating expenses are deducted to determine a. gross margin. b. net income. c. gross profit on sales. d. net margin. 37. In a perpetual inventory system, cost of goods sold is recorded a. on a daily basis. b. on a monthly basis. c. on an annual basis. d. with each sale. 38. Under a perpetual inventory system, acquisition of merchandise for resale is debited to the a. Merchandise Inventory account. b. Purchases account. c. Supplies account. d. Cost of Goods Sold account. 39. Bryan Company purchased merchandise from Cates Company with freight terms of FOB shipping point. The freight costs will be paid by the a. seller. b. buyer. c. transportation company. d. buyer and the seller. 40. Flynn Company purchased merchandise inventory with an invoice price of $3,000 and credit terms of 2/10, n/30. What is the net cost of the goods if Flynn Company pays within the discount period? a. $3,000. b. $2,940. c. $2,700. d. $2,760. 41. The Sales Returns and Allowances account is classified as a(n) a. asset account. b. contra asset account. c. expense account. d. contra revenue account. 42. The journal entry to record a credit sale is a. Cash Sales b. Cash Service Revenue c. Accounts Receivable Service Revenue d. Accounts Receivable Sales 43. Gross profit for a merchandiser is net sales minus a. operating expenses. b. cost of goods sold. c. sales discounts. d. cost of goods available for sale. 44. Net sales is sales less a. sales discounts. b. sales returns. c. sales returns and allowances. d. sales discounts and sales returns and allowances. 45. Vic's Used Cars uses the specific identification method of costing inventory. During March, Vic purchased three cars for $4,000, $5,000, and $6,500, respectively. During March, two cars are sold for $6,000 each. Vic determines that at March 31, the $6,500 car is still on hand. What is Vic's gross profit for March? a. $3,500. b. $3,000. c. $500. d. $5,500. 46. Which of the following is not a common cost flow assumption used in costing inventory? a. First-in, first-out b. Middle-in, first-out c. Last-in, first-out d. Average cost 47. Rudolf Diesel Company's inventory records show the following data: Units Unit Cost ————— ————————— Inventory, January 1 5,000 $9.00 Purchases: June 18 4,500 8.00 November 8 3,000 7.00 A physical inventory on December 31 shows 4,000 units on hand. Under the FIFO method, the December 31 inventory is a. $28,000. b. $29,000. c. $32,000. d. $36,000. 48. A check returned by the bank marked "NSF" means a. no service fee. b. no signature found. c. not satisfactorily filled-out. d. not sufficient funds. 49. On a bank reconciliation, deposits in transit are a. added to the bank balance. b. deducted from the bank balance. c. added to the book balance. d. deducted from the book balance. 50. In preparing a bank reconciliation, outstanding checks are a. added to the balance per bank. b. deducted from the balance per books. c. added to the balance per books. d. deducted from the balance per bank. 51. The term "receivables" refers to a. amounts due from individuals or companies. b. merchandise to be collected from individuals or companies. c. cash to be paid to creditors. d. cash to be paid to debtors. 52. When the allowance method is used to account for uncollectible accounts, Bad Debts Expense is debited when a. a sale is made. b. an account becomes bad and is written off. c. management estimates the amount of uncollectibles. d. a customer's account becomes past-due. 53. An aging of a company's accounts receivable indicates that $6,000 are estimated to be uncollectible. If Allowance for Doubtful Accounts has a $1,100 credit balance, the adjustment to record bad debts for the period will require a a. debit to Bad Debts Expense for $6,000. b. debit to Allowance for Doubtful Accounts for $4,900. c. debit to Bad Debts Expense for $4,900. d. credit to Allowance for Doubtful Accounts for $6,000. 54. To record estimated uncollectible accounts using the allowance method, the adjusting entry would be a a. debit to Accounts Receivable and a credit to Allowance for Doubtful Accounts. b. debit to Bad Debts Expense and a credit to Allowance for Doubtful Accounts. c. debit to Allowance for Doubtful Accounts and a credit to Accounts Receivable. d. debit to Loss on Credit Sales and a credit to Accounts Receivable. 55. On February 1, 2005, Dickens Company sells merchandise on account to Livingston Company for $5,000. The entry to record this transaction by Dickens Company is a. Sales .................................. 5,000 Accounts Payable .................... 5,000 b. Cash ................................... 5,000 Sales ............................... 5,000 c. Accounts Receivable .................... 5,000 Sales ............................... 5,000 d. Notes Receivable ....................... 5,000 Accounts Receivable ................. 5,000 56. A company purchased land for $70,000 cash. Real estate brokers' commission was $5,000 and $7,000 was spent for demolishing an old building on the land before construction of a new building could start. Under the cost principle, the cost of land would be recorded at a. $77,000. b. $70,000. c. $75,000. d. $82,000. 57. A company purchased factory equipment on April 1, 2005 for $48,000. It is estimated that the equipment will have a $6,000 salvage value at the end of its 10-year useful life. Using the straight-line method of depreciation, the amount to be recorded as depreciation expense at December 31, 2005 is a. $4,800. b. $4,200. c. $3,150. d. $3,600. 58. A factory machine was purchased for $60,000 on January 1, 2005. It was estimated that it would have a $12,000 salvage value at the end of its 5-year useful life. It was also estimated that the machine would be run 40,000 hours in the 5 years. If the actual number of machine hours ran in 2005 was 4,000 hours and the company uses the units-of-activity method of depreciation, the amount of depreciation expense for 2005 would be a. $6,000. b. $9,600. c. $12,000. d. $4,800. 59. Which depreciation method is most frequently used in businesses today? a. Straight-line b. Declining-balance c. Units-of-activity d. Double-declining-balance 60. Intangible assets are the rights and privileges that result from ownership of long-lived assets that a. must be generated internally. b. are depletable natural resources. c. have been exchanged at a gain. d. do not have physical substance. 61. The entry to record patent amortization usually includes a credit to a. Amortization Expense. b. Accumulated Amortization. c. Accumulated Depreciation. d. Patents. 62. Cost allocation of an intangible asset is referred to as a. amortization. b. depletion. c. accretion. d. capitalization. 63. Depreciable cost is the a. book value of an asset less its salvage value. b. cost of an asset less its salvage value. c. cost of an asset less accumulated depreciation. d. book value of an asset. 64. The person who signs a check is referred to as the a. Creditor b. Drawee c. Drawer d. Payee 65. Which of the following employees would likely receive a salary instead of wages? a. Store clerk b. Factory employee c. Sales manager d. Manual laborer 66. The total compensation earned by an employee is called a. take-home pay. b. net pay. c. net earnings. d. gross earnings. 67. Sue Stein's regular rate of pay is $15 per hour with one and one-half times her regular rate for any hours which exceed 40 hours per week. She worked 48 hours last week. Therefore, her gross wages were a. $720. b. $600. c. $780. d. $1,080. 68. A system in which people are free to produce the goods and services they choose is called a _______________munistFree enterpriseProprietorshipSocialist 69. People who transform ideas for products or services into real-world businesses are called ______________.EmployeesEntrepreneursLaborersStockholder70. Information needed for journalizing the adjusting entries is obtained from a. the general ledger account Balance Columns. b. the Income Statement. c. the Work Sheet’s Adjustments Columns. d. the Balance Sheet.71. A business that buys finished products and resells them is known as a _____________ business. Manufacturing Merchandising Not-for-profit Service72. A real estate office, a medical center, and a repair shop are examples Of ______________ businesses. Manufacturing Merchandising Not-for-profit Service73. A business owned by one person is called a ______________. a. Corporation b. Free enterprise c. Partnership d. Sole proprietorship74. A business in which the owner(s) have limited liability is a ____. a. Corporation b. Free enterprise c. Partnership d. Sole proprietorship75. Legal permission for a corporation to operate in a state is given in the form Of a _______. Charter DBA Partner agreement Permission slip76. Which of the following is NOT an advantage to being an entrepreneur? a. You are your own Boss. b. You create and control your work schedule. c. You select the people who work with you. d. You will be able to work a few hours. 77. Accounting, which focuses on reporting information to internal users, is referred to as ______________ accounting. Actuarial Cost Financial Managerial78. The accounting assumption which states that a business exists independently Of its owner’s personal holdings is known as _______. Accounting period Business entity Going concern Matching79. Which of the following is an example of a liability account? a. Income Summary b. Land c. Payroll Tax Expense d. Salaries Payable80. Which of the following is a temporary account? a. Accounts Payable b. Cash in Bank c. Fees d. J. Jones, Capital81. A company’s list of all of their accounts and their assigned account numbers is called a _________________. Chart of accounts Journal Ledger T account82. The information needed for closing all revenue accounts is obtained from the work sheet’s Trail Balance Debit Column. Income Statement Debit Column. Income Statement Credit Column. Balance Sheet Credit Column.83. After closing entries are posted, the owner’s capital account balance should be the same asCapital shown on the balance sheet.Revenue for the fiscal income for the fiscal period.Total assets.84. The Supplies amount in work sheet’s Trial Balance Debit column represent the cost of supplies Available during a fiscal period. Used during a fiscal period. Bought during a fiscal period. At the beginning of a fiscal period.85. The two accounts used in adjusting supplies are a. Supplies and Supplies Expense. b. Income Summary and Supplies. c. Income Summary and Supplies Expense. d. Merchandise Inventory and Supplies.86. Supplies used during a fiscal period are classified as a. Capital. b. An Expense. c. A Liability. d. An Asset.87. The portion of the insurance premiums that has expired during a fiscal period is classified as Capital A Liability An expense An Asset88. After the supplies adjusting entry has been posted, the supplies account balance represents the value of supplies Inventory at the beginning of the fiscal period. Bought during the fiscal period. Used during the fiscal period. Inventory at the end of the fiscal period.89. Allowance for Uncollectible Accounts is a. An asset account. b. A contra asset account c. A liability account. d. A contra sales account.90. Revenue from sales on account should be recorded a. At the sale time of sale. b. When payment is made. c. When the merchandise is delivered. d. Weekly.91. Taxes such as FICA tax, federal unemployment tax, and state unemployment tax as a group are frequently referred to as City taxes. Payroll taxes. Income taxes. Sales taxes.92. Payroll information for each employee is recorded in a payroll register a. At the end of each day. b. At the end of each week. c. At the end of each month. d. At the end of each pay period.93. The total of the Net Pay column of the payroll register is credited to a. An asset account. b. A liability account. c. A revenue account. d. An expense account.94. FICA taxes are paid by a. Employers only. b. Employees only. c. More by the employer than the employee. d. Equally by both the employer and the employee.95. Information needed to determine an employee’s FICA tax withholding for a pay period is Wages, FICA tax rate. Wages, year-to-date earnings, FICA tax rate. Wages, number of withholding allowances, FICA tax rate. Wages, FICA tax rate, employee age.96. An employee’s total earnings are figured by a. Total hours X total rate. b. Regular hours X regular rate, plus overtime hours X overtime rate. c. Regular hours X regular rate, plus overtime hours X 1.5 overtime rate. d. Regular hours X overtime rate.97. Total employee’s deductions include a. FICA tax, income tax. b. FICA tax, unemployment tax. c. Income tax, unemployment tax. d. FICA tax, income tax, unemployment tax.98. If depreciation expense is not recorded, net income will a. Be understated. b. Be overstated. c. Not be affected. d. Equal to assets.99. The petty cash account is classified as a. An asset. b. A liability. c. An expense. d. A revenue.100. Information needed for journalizing the adjusting entries is obtained from the General ledger account Balance columns. Income Statement. Work Sheet’s Adjustments columns. Balance Sheet. ANSWER KEY1.B26.C51.A76.D2.A27.D52.C77.D3.D28.D53.C78.B4.B29.B54.B79.D5.D30.A55.C80.C6.D31.A56.D81.A7.D32.D57.C82.C8.C33.A58.D83.A9.D34.D59.A84.A10.C35.A60.D85.A11.B36.B61.D86.B12.C37.D62.A87.C13.D38.A63.B88.D14.D39.B64.D89.B15.A40.B65.C90.A16.B41.D66.D91.B17.B42.D67.C92.D18.A43.B68.B93.A19.B44.D69.B94.D20.C45.B70.C95.B21.D46.B71.B96.B22.B47.B72.D97.A23.A48.D73.D98.B24.C49.A74.A99.A25.B50.D75.A100.C ................
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