Accounting Questions Review

Which of these is a fixed asset? a. cash b. goodwill c. equipment d. trademark e. inventory

Which financial statement would include a listing of a company's assets? a. Statement of Other Comprehensive Income b. Statement of Cash Flows c. Profit and Loss Statement d. Statement of Owner's Equity e. Balance Sheet

A store accidentally priced an item at $20 instead of $30 and honored the mispricing. Where should the store attribute the $10 difference? a. cost of goods sold b. sales c. operating expenses d. returns and allowances e. profit (loss)

A landscaping company charges its customers a portion of their fee before they complete any work. Which account would be credited from this transaction? a. accounts payable b. revenue c. cash d. unearned revenue e. accounts receivable

study accounting credits and debits

Mr. Decker invested $20,000 in cash in his new business. How does the company record the investment? a. debit Cash and credit Retained Earnings b. credit Cash and debit Investments c. credit Cash and debit Owner's Equity d. credit Cash and debit Retained Earnings e. debit Cash and credit Owner's Equity

Which statement is true of an invoice with terms of 2/10 net 30? a. Payment is required within 2 days, else an additional 10% interest must be paid within 30 days. b. Payment is required within 10 days, else an additional 2% interest must be paid within 30 days. c. A 2% discount is applied if paid within 30 days, else the full amount must be paid within 10 months. d. A 10% discount is applied if paid within 2 days, else the full amount must be paid within 30 days. e. A 2% discount is applied if paid within 10 days, else the full amount must be paid within 30 days.

A company sells goods to a customer who will pay the full amount in 30 days. How should the company record the sale? a. debit Accounts Payable and credit Sales b. debit Accounts Receivable and credit Sales c. debit Cash and credit Sales d. debit Sales and credit Accounts Receivable e. debit Sales and credit Cash

Which transaction would be reported on a company's Statement of Changes in Equity? a. Disposal of fixed assets b. Dividend distribution to shareholders c. Dividend income from investments d. Purchase of fixed assets e. Loan funding from the bank

What's the correct entry for a $100 purchase of supplies on credit? a. Debit Accounts Payable: $100 Credit Cash: $100 b. Debit Accounts Payable: $100 Credit Supplies: $100 c. Debit Cash: $100 Credit Supplies: $100 d. Debit Accounts Receivable: $100 Credit Cash: $100 e. Debit Supplies: $100 Credit Accounts Payable: $100

Your company purchased a twelve-month insurance policy for $36,000 in January. What's the entry to record the monthly insurance expense in March? a. Debit Insurance Expense $3,000 Credit Accrued Liabilities $3,000 b. Debit Insurance Expense $3,000 Credit Prepaid Insurance $3,000 c. Debit Accrued Payables $3,000 Credit Insurance Expense $3,000 d. Debit Prepaid Insurance $3,000 Credit Insurance Expense $3,000 e. Debit Insurance Expense $3,000 Credit Cash $3,000

The bank statement balance is $45 lower than the general ledger bank balance. On the bank statement, there is a line item for bank charges and fees of $45. How should the adjustment be recorded in the general ledger? a. Debit Bank Fees Expense $45 Credit Bank Account $45 b. Debit Bank Account $45 Credit Bank Fees Expense $45 c. Debit Retained Earnings $45 Credit Bank Account $45 d. Debit Bank Account $45 Credit Retained Earnings $45 e. Debit Bank Fees Expense $45 Credit Retained Earnings $45

review question 12, 14, and 15

An Interest Expense of $125 has incorrectly been debited to Utilities Expense. Which journal entry is required to correct the original journal entry? a. credit Interest Expense $125 and debit Utilities Expense $125 b. debit Interest Expense $125 and credit Suspense Account $125 c. debit Interest Expense $125 and credit Utilities Expense $125 d. debit Utilities Expense $125 and credit Suspense Account $125 e. credit Interest Expense $125 and debit Suspense Account $125

Which account typically carries a credit balance? a. Utilities Expense b. Accumulated Depreciation c. Cash d. Inventory e. Accounts Receivable

An asset is classified as goodwill on the balance sheet when a company purchases an asset at greater than fair-market value. According to GAAP, you can adjust goodwill when _______. a. a new asset is purchased b. stock prices go down c. an asset is sold d. stock prices go up e. goodwill is impaired

Your company was recently served with a lawsuit. The outcome of the litigation will not be determined for several months, but it could result in a materially large settlement to be paid by your corporation. According to GAAP, what action should you take? a. Ensure information regarding the lawsuit is not revealed b. Provide a disclosure on financial statements regarding the pending litigation c. Take no action, because it may be dismissed d. Provide a statement to employees and stockholders e. Wait for the outcome of the lawsuit to address stakeholders

Which is the FIRST item miscategorized? Balance Sheet Liabilities a. Accounts Payable b. Prepaid expenses c. Accounts Receivable d. Accrued expenses e. Unearned revenue f. Long-term debt

Which is the SECOND item miscategorized? Balance Sheet Liabilities a. Accounts Payable b. Prepaid expenses c. Accounts Receivable d. Accrued expenses e. Unearned revenue f. Long-term debt

Based on the information provided, how would you calculate the annual net income? Annual Activities Service Income: $50,000 Accounts Receivable: $2,000 Advertising Expense: $1,000 Licenses Expense: $500 Supplies Expense: $5,000 Telephone Expense: $3,000 a. Service Income - (Accounts Receivable + Advertising + Licenses + Supplies + Telephone) b. Service Income - Accounts Receivable c. Service Income (Advertising + Licenses + Supplies + Telephone) d. (Service Income + Accounts Receivable) - (Advertising + Licenses + Supplies + Telephone) e. Service Income

review questions 6

On January 1, your company sold a 1-year subscription for $1,200. The subscription term was from January 1 to December 31. How would you calculate Unearned Revenue on March 31? a. $1,200 b. $100 x 6 c. $1,200 / 12 d. $100 * 9 e. $1,200 / 3

A company is selling used office equipment for $12,000 - They purchased it 2 years ago for $50,000 - It was expected to have a useful life of 5 years - They use straight line depreciation What is the gain or loss on the sale? a. -$28,000 b. -$18,000 c. $30,000 d. $38,000 e. $45,200

According to the trial balance, what is the working capital? Trial Balance Cash $10,000 Accounts Receivable $2,000 Inventory $3,000 Accounts Payable (AP) $2,000 Accrued Expenses (AE) $3,000 Revenue $15,000 a. (Cash + AR + Inventory) - (AE + AP) b. (Cash + AR + Inventory) - AE c. Cash + AR + Revenue d. Cash + AR + Inventory e. Revenue - AE

According to the Ending Inventory Report, how would you calculate the Cost of Sales? Ending Inventory Report Administrative Salaries $100,000 Amortization Expense $20,000 Beginning Inventory $75,000 Ending Inventory $60,000 Office Supplies Expense $25,000 Purchases $125,000 Travel and Entertainment Expense $5,000 a. $75,000 - $60,000 b. $75,000 + $125,000 - $60,000 - $20,000 c. $125,000 - $20,000 d. $75,000 + $125,000 - $60,000 e. $75,000 + $125,000 - $60,000 + $20,000