ACCT 301 Quiz 1 answers
ACCT 301 Quiz 1
ACCT 301 Quiz 1 Question Which of the following statements is most applicable to the business entity concept?
- the owner is part of the business entity
- an entity is organized according to state or federal statutes
- an entity is organized according to the rules set by the FASB
- the entity is an individual economic unit for which data are recorded, analyzed, and reported
2 . Elli Catering Services previously bought equipment with an estimated market value of $45,000 and is now offering it for sale at $65,000. The Trang Restaurant Group acquired it for $10,000 in cash and a note payable of $40,000 due in 30 days. The amount used in Trang’s accounting records to record this acquisition is
- If Chesapeake Company’s total liabilities decreased by $25,000 during a period of time and owner’s equity increased by $30,000 during the same period, the amount and direction (increase or decrease) of the period’s change in total assets is
- $65,000 increase
- $5,000 decrease
- $5,000 increase
- $65,000 decrease
- Brielle Financial Services paid $9,000 to a creditor in payment of an amount owed. The effect of the transaction on the accounting equation was to
- increase one asset, decrease another asset
- increase an asset, increase a liability
- decrease an asset, decrease a liability
- increase an asset, increase owner’s equity
- When revenue is earned it
- increases assets, increases owner’s equity.
- increases assets, decreases owner’s equity
- increases one asset, decreases another asset
- decreases assets, increases liabilities
6 An account is said to have a debit balance if
- the amount of the debits exceeds the amount of the credits
- there are more entries on the debit side than on the credit side
- its normal balance is debit without regard to the amounts or number of entries on the debit side
- the last entry of the accounting period was posted on the debit side
7 . According to the rules of debits and credits :
- decrease Prepaid Rent with a credit and the normal balance is a credit
- increase Unearned Revenue with a credit and the normal balance is a debit
- increase Supplies Expense with a debit and the normal balance is a debit
- decrease Cash with a debit and the normal balance is a credit
8 . When the accountant at Nottingham Auto makes a payment on an Account payable she will
- debit Cash; credit Accounts Payable
- debit Accounts Receivable; credit Cash
- debit Cash; credit Supplies Expense
- debit Accounts Payable; credit Cash
- Which of the following entries records the investment of cash by Jakob, owner of a proprietorship?
- debit Jakob, Capital; credit Accounts Receivable
- debit Cash; credit Jakob, Capital
- debit Jakob, Drawing; credit Cash
- debit Cash; credit Jakob, Drawing
- Which of the following entries records the receipt of a utility bill from Baltimore Water Works ?
- debit Utilities Expense; credit Accounts Payable
- debit Utilities Payable; credit Accounts Receivable
- debit Accounts Payable; credit Cash
- debit Accounts Payable; credit Utilities Payable
- The primary difference between deferred and accrued expenses is that deferred expenses have
- been incurred and accrued expenses have not
- not been incurred and accrued expenses have been incurred
- been recorded and accrued expenses have not been incurred
- not been recorded and accrued expenses have been incurred
- The balance in the prepaid rent account before adjustment at the end of the year is $15,000, which represents three months’ rent paid on December 1. The adjusting entry required on December 31 is
- debit Rent Expense, $5,000; credit Prepaid Rent, $5,000
- debit Prepaid Rent, $10,000; credit Rent Expense, $5,000
- debit Rent Expense, $10,000; credit Prepaid Rent, $5,000
- debit Prepaid Rent, $5,000; credit Rent Expense, $5,000
- Maryland Medical LLC has a balance in the office supplies account on June 1 of $5,200, purchased supplies during June for $2,500, and the supplies on hand at June 30 were $2,000. The adjusting entry will be in the amount of
14 . Which of the following statements is true if the usual adjusting entry to Prepaid Insurance to record expired insurance was omitted.
- Total assets at the end of the year will be understated.
- Owner’s equity at the end of the year will be understated.
- Net income for the year will be overstated.
- Insurance Expense will be overstated.
- Sadie Literary Services pays weekly salaries of $20,000 on Friday for a five-day week ending on that day. The adjusting entry necessary at the end of the fiscal period ending on Thursday is
- debit Salaries Payable, $16,000; credit Cash, $16,000
- debit Salary Expense, $16,000; credit Drawing, $16,000
- debit Salary Expense, $16,000; credit Salaries Payable, $16,000
- debit Drawing, $16,000; credit Cash, $16,000
16 . A summary of selected ledger accounts appear below for Morgana’s Video Editing Services for the 2014 calendar year end.
Net income for the period is
- Select one of the following accounts that will be closed to the Capital account at the end of the fiscal year?
- Rent Expense
- Fees Earned
- Income Summary
- Depreciation Expense
- The post-closing trial balance includes
- Shamina Venkat, Drawing
- Supplies Expense
- Fees Earned
- Unearned Rent
- The following accounts were taken from the Adjusted Trial Balance columns of the work sheet for Vatsala Bakery LLC:
|Accumulated Depreciation||$ 2,000|
Net income for the period for Vatsala is
- Alaska Snow Removal is reporting Net Income of $90,000. However, adjusting entries have not been made at the end of the period for supplies expense of $2,700 and accrued salaries of $1,300. Net income, as corrected, for Alaska is
- What is the proper adjusting entry at June 30, the end of the fiscal year, based on a prepaid insurance account balance before adjustment, $15,500, and unexpired amounts per analysis of policies, $4,500?
- debit Insurance Expense, $4,500; credit Prepaid Insurance, $4,500
- debit Insurance Expense, $15,500; credit Prepaid Insurance, $15,500
- debit Prepaid Insurance, $11,500; credit Insurance Expense, $11,500
- debit Insurance Expense, $11,000; credit Prepaid Insurance, $11,000
- On November 1 of the current year, the assets and liabilities of Ram Mysore, are as follows: Cash, $10,000; Accounts Receivable, $8,200; Supplies, $1,050; Land, $25,000; Accounts Payable, $6,530. What is the amount of owner’s equity (Ram Mysore’s capital) as of November 1 of the current year?
- Sue Krebs is the sole owner and operator of Immigrant Relocator Services. As of the end of its accounting period, December 31, 2005, Immigrant Relocator Services has assets of $925,000 and liabilities of $285,000. During 2006, Sue Krebs invested an additional $50,000 and withdrew $30,000 from the business. What is the amount of net income during 2006 for Immigrant Relocator Services , assuming that as of December 31, 2006, assets were $980,000, and liabilities were $255,000?
24.If beginning capital was $65,000, ending capital is $43,000, and the owner’s withdrawals were $16,000, the amount of net income or net loss was
- net income of $37,000
- net income of $8,000
- net loss of $22,000
- net loss of $6,000
- Which of the following entries records the receipt of cash for two months’ rent? The cash was received in advance of providing the service.
- Prepaid Rent, debit; Rent Revenue, credit.
- Cash, debit; Unearned Rent, credit.
- Cash, debit; Prepaid Rent, credit.
d. Cash, debit; Rent Expense credit.
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