UTA Accounting Entrance Exam UPDATED
ACTUAL Exam Questions and CORRECT
Answers
Jones Dairy purchased a new milking machine for $40,000 cash. To record the transaction on
Jones' books, you would: - CORRECT ANSWER - debit an asset account and credit an
asset account.
Rent Expense typically would have: - CORRECT ANSWER - a debit balance.
If the beginning balance in the Machinery account is $35,000, and if the ending balance in the
Machinery account is $57,000, then: - CORRECT ANSWER - purchases and sales of
machinery cannot be determined from the information given.
A double-entry system of accounting requires that each transaction or event be recorded: -
CORRECT ANSWER - in at least two different accounts.
The trial balance should be prepared: - CORRECT ANSWER - Before financial statements
are prepared.
At the end of an accounting period when accounts are ready to be closed, which of the following
activities must be performed? - CORRECT ANSWER - Make closing entries and prepare
post closing trial balance
The Prepaid Insurance account has an account balance of $3,000. At the end of an accounting
period, the controller has decided that $2,000 of the balance has expired. Which of the following
adjusting entries should be made? - CORRECT ANSWER - D: Insurance Expense 2,000
C : Prepaid Insurance 2,000
Gross profit is calculated by: - CORRECT ANSWER - subtracting cost of goods sold from
net sales.
, The operating expense section of an income statement for a wholesaler would not include: -
CORRECT ANSWER - cost of goods sold.
Cramer Corp. reported the following for 2004: total assets, $90,000; total liabilities, $35,000;
contributed capital (i.e., total paid in capital), $40,000. Therefore, retained earnings was: -
CORRECT ANSWER - $15,000
Which of the following would not be considered a current asset? - CORRECT ANSWER -
All of the above are current assets.
Which of the following would appropriately be included in the Cash account on a balance sheet?
- CORRECT ANSWER - Unrestricted foreign currency
In preparing a typical bank reconciliation, how would outstanding checks be handled? -
CORRECT ANSWER - Subtracted from "balance per bank."
During 2004, ABC Company had $750,000 of net credit sales. Accounts Receivable had a
December 31, 2004, balance of $250,000. No amounts have been added to the Allowance for
Doubtful Accounts during 2004. Before adjustment on December 31, 2004, the Allowance for
Doubtful Accounts had a credit balance of $2,000. ABC estimates that 3% of net credit sales will
become uncollectible. What will be the adjusted balance in Allowance for Doubtful Accounts at
December 31? - CORRECT ANSWER - $24,500
During 2004, Allied Associates had $750,000 of net credit sales. Accounts Receivable had a
December 31, 2004, balance of $250,000. No amounts have been added to the Allowance for
Doubtful Accounts during 2004. Before adjustment on December 31, 2004, the Allowance for
Doubtful Accounts had a credit balance of $2,000. Allied estimates that 6% of receivables will
become uncollectible. What will be the adjusted balance in Allowance for Doubtful Accounts at
December 31? - CORRECT ANSWER - $15,000
Assume that Jones Company purchased $100 of inventory on credit. If Jones Company uses the
Periodic Inventory system the journal entry to record this purchase would be: - CORRECT
ANSWER - D : Purchases 100
ACTUAL Exam Questions and CORRECT
Answers
Jones Dairy purchased a new milking machine for $40,000 cash. To record the transaction on
Jones' books, you would: - CORRECT ANSWER - debit an asset account and credit an
asset account.
Rent Expense typically would have: - CORRECT ANSWER - a debit balance.
If the beginning balance in the Machinery account is $35,000, and if the ending balance in the
Machinery account is $57,000, then: - CORRECT ANSWER - purchases and sales of
machinery cannot be determined from the information given.
A double-entry system of accounting requires that each transaction or event be recorded: -
CORRECT ANSWER - in at least two different accounts.
The trial balance should be prepared: - CORRECT ANSWER - Before financial statements
are prepared.
At the end of an accounting period when accounts are ready to be closed, which of the following
activities must be performed? - CORRECT ANSWER - Make closing entries and prepare
post closing trial balance
The Prepaid Insurance account has an account balance of $3,000. At the end of an accounting
period, the controller has decided that $2,000 of the balance has expired. Which of the following
adjusting entries should be made? - CORRECT ANSWER - D: Insurance Expense 2,000
C : Prepaid Insurance 2,000
Gross profit is calculated by: - CORRECT ANSWER - subtracting cost of goods sold from
net sales.
, The operating expense section of an income statement for a wholesaler would not include: -
CORRECT ANSWER - cost of goods sold.
Cramer Corp. reported the following for 2004: total assets, $90,000; total liabilities, $35,000;
contributed capital (i.e., total paid in capital), $40,000. Therefore, retained earnings was: -
CORRECT ANSWER - $15,000
Which of the following would not be considered a current asset? - CORRECT ANSWER -
All of the above are current assets.
Which of the following would appropriately be included in the Cash account on a balance sheet?
- CORRECT ANSWER - Unrestricted foreign currency
In preparing a typical bank reconciliation, how would outstanding checks be handled? -
CORRECT ANSWER - Subtracted from "balance per bank."
During 2004, ABC Company had $750,000 of net credit sales. Accounts Receivable had a
December 31, 2004, balance of $250,000. No amounts have been added to the Allowance for
Doubtful Accounts during 2004. Before adjustment on December 31, 2004, the Allowance for
Doubtful Accounts had a credit balance of $2,000. ABC estimates that 3% of net credit sales will
become uncollectible. What will be the adjusted balance in Allowance for Doubtful Accounts at
December 31? - CORRECT ANSWER - $24,500
During 2004, Allied Associates had $750,000 of net credit sales. Accounts Receivable had a
December 31, 2004, balance of $250,000. No amounts have been added to the Allowance for
Doubtful Accounts during 2004. Before adjustment on December 31, 2004, the Allowance for
Doubtful Accounts had a credit balance of $2,000. Allied estimates that 6% of receivables will
become uncollectible. What will be the adjusted balance in Allowance for Doubtful Accounts at
December 31? - CORRECT ANSWER - $15,000
Assume that Jones Company purchased $100 of inventory on credit. If Jones Company uses the
Periodic Inventory system the journal entry to record this purchase would be: - CORRECT
ANSWER - D : Purchases 100
