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1. Allowance for Doubtful Accounts is: a. subtracted from Accounts Receivable in the Assets section of the balance sheet. b. deducted from Sales in the Revenue section of the income statement. c. listed in the Operating Expenses section of the income statement. d. listed in the Liabilities section of the balance sheet.

2. The adjusting entry for uncollectible accounts requires a debit to_____ and a credit to _____. a. Allowance for Doubtful Accounts; Accounts Receivable b. Uncollectible Accounts Expense; Allowance for Doubtful Accounts c. Cncollectible Accounts Expense; Accounts Receivable d. Allowance for Doubtful Accounts; Uncollectible Accounts Expense

3. The adjusting entry to record accrued interest on a note payable requires a debit to _____and a credit to _____. a. Interest Income; otes Payable b. Interest Payable; Interest Expense c. Interest Expense; Cash d. Interest Expense; Interest Payable

4. On July 1, 2010, a firm purchased a l-year insurance policy for $1,800 and paid the full premium in advance. The insurance expense associated with this policy for 2010 is: a. $600. b. $1,050. C. $900. d. $1,800.

5. On January 2, 2011, a firm purchased equipment for $8,500. Depreciation expense for 2011, given the straight-line method, a 5-year useful life, and a salvage value of $1,500, is: a. $1,500. b. $1,700. c. $1,200. d. $1,400.

6. Accrued expenses are: a. paid for and recorded in one period but not fully lIsed until a later period. b. used in one period but not paid for until a later period. c. paid for, recorded, and used in one period. d. budgeted but not paid for or used during the period.

7. On November 1, 2010, a firm accepted a 4-month, lO-percent note for $900 from a customer with an overdue balance. The accrued interest recorded for this note for the year ended December 31, 2010, is: a. $90. b. $75. c. $30. d. $15.

8. With the accrual basis of accounting, it is appropriate to recognize revenue from il credit sale: a. on the date of the sale. b. on the date the account is collected in full. c. each time a payment on an account balance is received. d. either on the date of the sale or when the amount of the sale is collected.

9. The net income for an accounting period appears on the worksheet in the: a. Income Statement Debit column only. b. Income Statement Credit column only. c. Income Statement Credit and the Balance Sheet Debit columns. d. Income Statement Debit and the Balance Sheet Credit columns.

10. The ending merchandise inventory is recorded on the worksheet in the: a. Income Statement Credit and the Balance Sheet Debit columns. b. Income Statement Credit column only. c. Balance Sheet Debit column only. d. Income Statement Debit column only.

11. Gross profit on sales is calculated by subtracting: a. sales returns and allowances from sales. b. cost of goods sold from net sales. c. ending inventory from the total merchandise available for sale. d. total expenses from sales.

12. An income statement that lists all revenues in one section and all expenses in another section is known as a income statement. a. classified b. multiple-step c. single-step d. categorized

13. The beginning capital balance shown on a statement of owner's equity is $43,000. Net income for the period is $18,000. The owner withdrew $22,000 cash from the business and made no additional investments during the period. The owner's capital balance at the end of the period is: a. $39,000. b. $47,000. c. $61,000. d. $83,000.

14. Which of the following is NOT a current asset? a. Accounts Receivable b. Prepaid Insurance c. Merchandise Inventory d. Equipment

15. Prepaid expenses appear in the: a. Operating Expenses section of the income statement. b. Other Expenses section of the income statement. c. Current Assets section of the balance sheet. d. Current Liabilities section of the balance sheet.

16. Which of the following accounts is NOT dosed? a. Capital b. Depreciation Expense c. Sales d. All of the accounts listed above are closed.

17. Which of the following groups of accounts will have zero balances after the closing process is completed? a. Allowance for Doubtful Accounts and Uncollectible Accounts Expense b. Purchases and Purchases Returns and Allowances c. Merchandise Inventory and Sales d. Depreciation Expense and Accumulated Depreciation-Equipment

18. Which of the following accounts will appear on the post-dosing trial balance? a. Miscellaneous Income b. Payroll Taxes Expense c. Medicare Tax Payable d. Sales

19. The current ratio is calculated by dividing: a. current assets by current liabilities. b. current liabilities by current assets. c. total assets by total current assets. d. current assets by total assets.

20. In the general journal, reversing entries are dated as of: a. the last day of the old fiscal period. b. the first day of the new fiscal period. c. any day during the month of the new fiscal period. d. any time before the end of the fiscal period.

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