ACCT 2010 Exam 1 Practice with
Complete Solutions
Which statement covers a period of time?
a. Balance sheet
b. Income statement
c. Statement of cash flows
d. Both B and C are correct - ANS-d. Both B and C are correct (income statement and
statement of cash flows)
Which financial statement covers a period of time?
A. Balance sheet
B. Income statement
C. Statement of Cash Flows
D. Both B and C are correct - ANS-A. Balance sheet
Which financial statement is prepared first?
A. Balance sheet
B. Income statement
C. Statement of Retained Earnings
D. Statement of Cash Flows
E. Both A and D are correct - ANS-B. Income statement
Which financial statement reports dividends?
A. Balance sheet
B. Income statement
C. Statement of Retained Earnings
D. Statement of Cash Flows
E. Both A and D are correct - ANS-C. Statement of Retained Earnings
During the year C Co.'s retained earnings increased from $10,000 to $15,000. C Co.
had revenues of $40,000 and dividends of $3,000. How much expense did C Co. incur
during the year?
A. $0
B. $35,000
C. $32,000
D. $29,000 - ANS-C. $32,000
During the year C Co.'s retained earnings increased from $20,000 to $25,000. C Co.
had dividends of $4,000 and expenses of $70,000. How much Net Income did C Co.
have during the year?
, A. $1,000
B. $5,000
C. $9,000
D. $13,000 - ANS-C. $9,000
During the year C Co.'s retained earnings increased from $38,000 to $50,000. C Co.
had revenues of $180,000 and expenses of $162,000. How much dividends did C Co.
pay during the year?
A. $0
B. $6,000
C. $12,000
D. $7,000 - ANS-B. $6,000
Which of the following trial balances is prepared after all transactions have been
recorded?
a. Unadjusted trial balance.
b. Pre-adjusted trial balance.
c. Adjusted trial balance.
d. Post-closing trial balance. - ANS-a. Unadjusted trial balance.
Which of the following is true?
a. Dividends paid by a corporation are an expense
b. Dividends increase cash
c. Dividends reduce retained earnings
d. Dividends reduce net income - ANS-c. Dividends reduce retained earnings
AHV Co. is a consulting firm. The entry to record consulting fees earned but not yet
received is
a. debit accounts receivable and credit revenue
b. debit cash and credit revenue
c. debit revenue and credit cash
d. debit accounts receivable and credit deferred revenue - ANS-a. debit accounts
receivable and credit revenue
ESV Co. is a consulting firm. The entry to record consulting fees received but not yet
earned is
a. debit accounts receivable and credit revenue
b. debit cash and credit revenue
c. debit cash and credit deferred revenue
d. debit deferred revenue and credit revenue - ANS-c. debit cash and credit deferred
revenue
When services are sold, how does the selling price of the services sold affect the
financial statements?
a. assets and retained earnings increase
Complete Solutions
Which statement covers a period of time?
a. Balance sheet
b. Income statement
c. Statement of cash flows
d. Both B and C are correct - ANS-d. Both B and C are correct (income statement and
statement of cash flows)
Which financial statement covers a period of time?
A. Balance sheet
B. Income statement
C. Statement of Cash Flows
D. Both B and C are correct - ANS-A. Balance sheet
Which financial statement is prepared first?
A. Balance sheet
B. Income statement
C. Statement of Retained Earnings
D. Statement of Cash Flows
E. Both A and D are correct - ANS-B. Income statement
Which financial statement reports dividends?
A. Balance sheet
B. Income statement
C. Statement of Retained Earnings
D. Statement of Cash Flows
E. Both A and D are correct - ANS-C. Statement of Retained Earnings
During the year C Co.'s retained earnings increased from $10,000 to $15,000. C Co.
had revenues of $40,000 and dividends of $3,000. How much expense did C Co. incur
during the year?
A. $0
B. $35,000
C. $32,000
D. $29,000 - ANS-C. $32,000
During the year C Co.'s retained earnings increased from $20,000 to $25,000. C Co.
had dividends of $4,000 and expenses of $70,000. How much Net Income did C Co.
have during the year?
, A. $1,000
B. $5,000
C. $9,000
D. $13,000 - ANS-C. $9,000
During the year C Co.'s retained earnings increased from $38,000 to $50,000. C Co.
had revenues of $180,000 and expenses of $162,000. How much dividends did C Co.
pay during the year?
A. $0
B. $6,000
C. $12,000
D. $7,000 - ANS-B. $6,000
Which of the following trial balances is prepared after all transactions have been
recorded?
a. Unadjusted trial balance.
b. Pre-adjusted trial balance.
c. Adjusted trial balance.
d. Post-closing trial balance. - ANS-a. Unadjusted trial balance.
Which of the following is true?
a. Dividends paid by a corporation are an expense
b. Dividends increase cash
c. Dividends reduce retained earnings
d. Dividends reduce net income - ANS-c. Dividends reduce retained earnings
AHV Co. is a consulting firm. The entry to record consulting fees earned but not yet
received is
a. debit accounts receivable and credit revenue
b. debit cash and credit revenue
c. debit revenue and credit cash
d. debit accounts receivable and credit deferred revenue - ANS-a. debit accounts
receivable and credit revenue
ESV Co. is a consulting firm. The entry to record consulting fees received but not yet
earned is
a. debit accounts receivable and credit revenue
b. debit cash and credit revenue
c. debit cash and credit deferred revenue
d. debit deferred revenue and credit revenue - ANS-c. debit cash and credit deferred
revenue
When services are sold, how does the selling price of the services sold affect the
financial statements?
a. assets and retained earnings increase
