Scribd
Upload
100 views5 pages

Aka Balance Sheet

This document contains 20 multiple choice questions testing accounting concepts related to financial statements, the accrual basis of accounting, and adjusting entries. Key topics covered include the components of the balance sheet and income statement, GAAP, the purpose of financial reporting, forms of business organization, accounts, and adjusting entries for various transactions like salaries, supplies, interest, and unrecorded revenue.

Uploaded by

maj thuan
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd
100 views5 pages

Aka Balance Sheet

This document contains 20 multiple choice questions testing accounting concepts related to financial statements, the accrual basis of accounting, and adjusting entries. Key topics covered include the components of the balance sheet and income statement, GAAP, the purpose of financial reporting, forms of business organization, accounts, and adjusting entries for various transactions like salaries, supplies, interest, and unrecorded revenue.

Uploaded by

maj thuan
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd
You are on page 1/ 5

1.

Which of the following relate to financial position in a set of financial statements (aka
Balance sheet)?
a. Assets, liabilities and equity
b. Assets, liabilities, income and expenses
c. Income and expenses
d. Income, expenses and liabilities

2. Which of the following is not a component of a Statement of Financial Position/(aka Balance


sheet)?
a. Cost of goods sold (only in Income statement)
b. Retained Earnings
c. Non-current assets
d. Liability

3. GAAP stands for:


a. Generally accepted accounting principles
b. Globally accepted accounting practice
c. Generally allowable accounting principles
d. Generally allowable accounting practice

4. Which of the following statements about the primary purpose of financial reporting is the
most correct
a. Provides information that can help with decision making
b. Financial statements are mostly provided for internal users.
c. Enables accountability since managers would have to account for resources used.
d. Identifies a range of existing and potential users to make decisions

5. Which is not one of the three forms of business organization?


a. Creditorship.
b. Sole proprietorship.
c. Partnership.
d. Company

6. Generally accepted accounting principles are:


a. A set of standards and rules that are recognized as a general guide for financial reporting.
b. Usually established by the Internal Revenue Service.
c. The guidelines used to resolve ethical dilemmas.
d. Fundamental truths that can be derived from the laws of nature

7. As of December 31, 20X0, George Corporation has assets of $4,500 and stockholders’ equity
of $2,500. What are the liabilities for George Corporation as of December 31, 20X0?
a $2,000
b $1,000
c $2,500
d $1,500
A = L + OE
4,500 = L + 2,500 => L = 2,000
8. The financial statements for Anphabet Corporation contained the following information.
Accounts receivable $ 10,000
Sales revenue 85,000 Cash 25,000
Salaries expense 25,000 Rent expense 15,000
What was Anphabet’s net income?
a. 45,000
b. 80,000
c. 70,000
d. 55,000
Net income = Revenue – Expense
 Net income = 85,000 – 25,000 – 15,000 = 45,000
9. Which statement about an account is true?
a. An account is an individual accounting record of increases and decreases in specific asset,
liability, and stockholders’ equity items.
b. In its simplest form, an account consists of two parts
c. There are separate accounts for specific assets and liabilities but only one account for
stockholders’ equity items.
d. The left side of an account is the credit or decrease side

11. Which of the following events is not recorded in the accounting records?
a. An employee is fired (because it is not an economic transaction)
b. Equipment is purchased on account
c. A cash investment is made into the business.
d. Company pays dividend to stockholders

12. Which one of these statements about the accrual basis of accounting is false?
a. Companies record revenue only when they receive cash, and record expense only when they
pay out cash. (this is cash basis)
b. Companies recognize revenue in the period in which it is earned.
c. This basis is in accord with generally accepted accounting principles.
d. Companies record events that change their financial statements in the period in which events
occur, even if cash was not exchanged.

13-16. During 2010, its first year of operations as a delivery service, Picture Corp. entered
into the following transactions.
13. Stockholders invested $20,000 by transfer into bank account of business.
a. Dr Bank 20,000, Cr Capital 20,000
b. Dr Cash 20,000, Cr Capital 20,000
c. Dr Capital 20,000, Cr Bank 20,000
d. Dr Capital 20,000, Cr Cash 20,000

14. Borrowed $45,000 by issuing bonds. (no more)


a. Dr Cash 45,000 Cr Bond payable 25,000
b. Dr Bond payable 45,000 Cr Cash 25,000
c. Dr Cash 45,000 Cr Bond receivable 25,000
d. Dr Bond receivable 45,000 Cr Cash 25,000

15. Purchased delivery trucks for $60,000 on credit.


a. Dr Truck 60,000, Cr Truck paybable 60,000
b. Dr Truck payable 60,000, Cr Truck 60,000
c. Dr Truck 60,000, Cr Cash 60,000
d. Dr Cash 60,000, Cr Truck 60,000

16. Received $16,000 from customers for goods sold last period. (goods sold in the past)
a. Dr Cash 16,000, Cr Trade receivable 16,000 (Trade receivable goes down )
b. Dr services revenues 16,000, Cr Cash 16,000
c. Dr Cash 16,000, Cr services revenues 16,000
d. Dr Trade receivable 16,000, Cr Cash 16,000

17. John earned a salary of $800 for the last week of October. He will be paid on November 1.
The adjusting entry for John’s employer at November 30 is:
a. Dr Salaries Expense 800, Cr Salaries Payable 800
b. No entry is required.
c. Dr Salaries Expense 800, Cr Cash 800
d. Dr Salaries Payable 800, Cr Cash 800

18. The trial balance shows Supplies $1,350 and Supplies Expense $0. If $600 of supplies are on
hand at the end of the period, the adjusting entry is:
a. Dr Supplies Expense 750, Cr Supplies 750 
b. Dr Supplies 750, Cr Supplies Expense 750
c. Dr Supplies 600, Cr Supplies Expense 600
d. Dr Supplies Expense 600, Cr Supplies 600
1,350 – 600 = 750
19. Micro Computer Services Inc. began operations on August 1, 2010. On August 1 the
company borrowed $30,000 from a local bank on a 15-year loan. The annual interest rate is 10%.
The adjusting entry at August 31, 2010: (no more)
a. Dr Interest expense 250, Cr Interest payable 250
b. Dr Interest payable 250, Cr Interest expense 250
c. Dr Interest expense 250, Cr Cash 250
d. Dr Cash 250, Cr Interest expense 250

20. Micro Computer Services Inc. began operations on August 1, 2010. Revenue earned but
unrecorded for August totaled $1,100. The adjusting entry at August 31, 2010:
a. Dr Accounts receivable  1,100, Cr Revenues  1,100
b. Dr Cr Revenues 1,100, Accounts receivable 1,100
c. Dr Revenues 1,100, Cr Cash 250
d. Dr Cash 250, Cr Revenues 1,100

You might also like