Principles of Accounting Final exam
The Matching principle in accounting requires the matching of:
A: Revenue earned with the expenses incurred to produce revenue
B: Revenue earned with the liabilities used to produce the revenue
C: Revenue earned with the assets used to produce the revenue
D: Revenue earned with the assets used less the liabilities incurred. - ANS a
Which of the following best defines a fiscal year?
A: The final 12 month period in the life of a business
B: Any consecutive 12 month period that a business adopts as its accounting year
C: The first 12 month period in the life of a business
D: The 12 month period from January through December - ANS B
Total revenues of 6,500, total expenses of 3,500 and dividends of 500 were recorded for the
month. What as the net income for this time period?
A: 3,500
B: 3,000
C: 2,500
D: 6,000 - ANS B
Which of the following accounts does no to onto the income statement?
A: Sales Revenue
B: Rent expense
C: Insurance expense
D: unearned revenue - ANS D
The unadjusted trial balance for a prepaid rent shows a 12,000 balance. At the end of this
period, 7,000 rent has been used. The adjusted trial balance for prepaid rent shows what
balance?
A: 7,000 Debit
B: 5,000 Debit
C: 5,000 credit
D: 7,000 Credit - ANS B
A company bought a two year insurance policy on Aug. 1st for 150 per month. No adjustments
have been made since then. What is the adjusting entry of Dec. 31 of this year?
A: Debit prepaid insurance 150, Credit insurance expense 150
B: Debit insurance expense 750, credit prepaid insurance 750
C: Debit insurance expense 150, credit prepaid insurance 150
D: debit prepaid insurance 750, credit insurance expense 750 - ANS B
,On the unadjusted trial balance, which accounts should have have their balance listed in the
debit column?
A: Liabilities, revenue, common stock
B: Assets, dividends, and expenses
C: Assets, revenues, and dividends
D: Liabilities, revenues, and dividends - ANS B
Which of the following is a true statement regarding the unearned revenue account?
A: Unearned revenue is accrued as the business provides goods or services
B: unearned revenue is expensed as the business provides goods or services
C: Unearned revenue decreases as the business provides goods or services
D: unearned revenue increases as the business provides goods or services - ANS C
The account cash had a beginning balance of zero and the following changes: increase of 250,
decrease of 75, increase of 113, and a decrease of 35. The ending balance is a:
A: Credit balance of 253
B: Debit balance of 253
C: debit balance of 363
D: credit balance of 110 - ANS B
The general ledger is arranged in what order?
A: Chronological
B: normal credit balance accounts first
C: alphabetical order of the account names
D: account order - ANS D
Jill invested 25,000 in her business. the journal entry (for the business) would include a:
A: credit cash for 25,000 and a debit to common stock for 25,000
B: Debit cash for 25,000 and a credit to dividends for 25,000
C: debit to cash for 25,000 and a credit to common stock for 25,000
D: credit to cash for 25,000 and a debit to dividends for 25,000 - ANS C
What is the basic account equation?
A: Revenue minus expenses equal net income
B: Debits equal credits
C: Assets equal liabilities plus owners equity
D: Beginning retained earnings plus net income minus dividends equals ending retained
earnings - ANS C
Respectively, cash, rent expense, and accounts payable are:
A: All permanent accounts
B: permanent, temporary, and temporary accounts
C: permanent, temporary, and permanent accounts
, D: Temporary, permanent, and temporary accounts - ANS C
Total revenues of 6,500, total expenses of 3,500, and dividends of 500 were recorded for the
month. What was net income for this time period?
A: 6,000
B: 3,500
C: 3,000
D: 2,500 - ANS C
A T-account has a 759 credit balance. This account is most likely NOT:
A: Accounts payable
B: sales Revenue
C: accounts receivable
D: common stock - ANS C
At the beginning of the period, the supplies account has a balance of 500. At the end of the
period, the balance was 275. Assuming the company made no purchases, what is the adjusting
entry?
A: Debit suppliers expense 225, credit supplies 225
B: debit supplies 225, credit supplies expense 225
C: debit supplies expense 275, credit supplies 275
D: debit supplies 275, credit supplies expense 275 - ANS A
A transaction is first recorded in which of the following accounting records?
A: general ledger
B: Trial balance
C: General journal
D: income statement - ANS C
Expenses paid in advance such as rent and insurance are classified as prepaid expenses. Into
what account category are they placed?
A: liabilities
B: assets
C: Expenses
D: Revenues - ANS B
The order in which accounts appear in the chart of accounts is:
A: stockholders equity, expenses, revenue, liabilities, assets
B: assets, stockholders equity, revenues,expenses, liabilities
C: assets, liabilities, stockholders equity, revenues, expenses
D: liabilities, assets, revenues, stockholders equity, expenses - ANS C
The difference between total debts and total credits of an account is called a:
A: ruling
The Matching principle in accounting requires the matching of:
A: Revenue earned with the expenses incurred to produce revenue
B: Revenue earned with the liabilities used to produce the revenue
C: Revenue earned with the assets used to produce the revenue
D: Revenue earned with the assets used less the liabilities incurred. - ANS a
Which of the following best defines a fiscal year?
A: The final 12 month period in the life of a business
B: Any consecutive 12 month period that a business adopts as its accounting year
C: The first 12 month period in the life of a business
D: The 12 month period from January through December - ANS B
Total revenues of 6,500, total expenses of 3,500 and dividends of 500 were recorded for the
month. What as the net income for this time period?
A: 3,500
B: 3,000
C: 2,500
D: 6,000 - ANS B
Which of the following accounts does no to onto the income statement?
A: Sales Revenue
B: Rent expense
C: Insurance expense
D: unearned revenue - ANS D
The unadjusted trial balance for a prepaid rent shows a 12,000 balance. At the end of this
period, 7,000 rent has been used. The adjusted trial balance for prepaid rent shows what
balance?
A: 7,000 Debit
B: 5,000 Debit
C: 5,000 credit
D: 7,000 Credit - ANS B
A company bought a two year insurance policy on Aug. 1st for 150 per month. No adjustments
have been made since then. What is the adjusting entry of Dec. 31 of this year?
A: Debit prepaid insurance 150, Credit insurance expense 150
B: Debit insurance expense 750, credit prepaid insurance 750
C: Debit insurance expense 150, credit prepaid insurance 150
D: debit prepaid insurance 750, credit insurance expense 750 - ANS B
,On the unadjusted trial balance, which accounts should have have their balance listed in the
debit column?
A: Liabilities, revenue, common stock
B: Assets, dividends, and expenses
C: Assets, revenues, and dividends
D: Liabilities, revenues, and dividends - ANS B
Which of the following is a true statement regarding the unearned revenue account?
A: Unearned revenue is accrued as the business provides goods or services
B: unearned revenue is expensed as the business provides goods or services
C: Unearned revenue decreases as the business provides goods or services
D: unearned revenue increases as the business provides goods or services - ANS C
The account cash had a beginning balance of zero and the following changes: increase of 250,
decrease of 75, increase of 113, and a decrease of 35. The ending balance is a:
A: Credit balance of 253
B: Debit balance of 253
C: debit balance of 363
D: credit balance of 110 - ANS B
The general ledger is arranged in what order?
A: Chronological
B: normal credit balance accounts first
C: alphabetical order of the account names
D: account order - ANS D
Jill invested 25,000 in her business. the journal entry (for the business) would include a:
A: credit cash for 25,000 and a debit to common stock for 25,000
B: Debit cash for 25,000 and a credit to dividends for 25,000
C: debit to cash for 25,000 and a credit to common stock for 25,000
D: credit to cash for 25,000 and a debit to dividends for 25,000 - ANS C
What is the basic account equation?
A: Revenue minus expenses equal net income
B: Debits equal credits
C: Assets equal liabilities plus owners equity
D: Beginning retained earnings plus net income minus dividends equals ending retained
earnings - ANS C
Respectively, cash, rent expense, and accounts payable are:
A: All permanent accounts
B: permanent, temporary, and temporary accounts
C: permanent, temporary, and permanent accounts
, D: Temporary, permanent, and temporary accounts - ANS C
Total revenues of 6,500, total expenses of 3,500, and dividends of 500 were recorded for the
month. What was net income for this time period?
A: 6,000
B: 3,500
C: 3,000
D: 2,500 - ANS C
A T-account has a 759 credit balance. This account is most likely NOT:
A: Accounts payable
B: sales Revenue
C: accounts receivable
D: common stock - ANS C
At the beginning of the period, the supplies account has a balance of 500. At the end of the
period, the balance was 275. Assuming the company made no purchases, what is the adjusting
entry?
A: Debit suppliers expense 225, credit supplies 225
B: debit supplies 225, credit supplies expense 225
C: debit supplies expense 275, credit supplies 275
D: debit supplies 275, credit supplies expense 275 - ANS A
A transaction is first recorded in which of the following accounting records?
A: general ledger
B: Trial balance
C: General journal
D: income statement - ANS C
Expenses paid in advance such as rent and insurance are classified as prepaid expenses. Into
what account category are they placed?
A: liabilities
B: assets
C: Expenses
D: Revenues - ANS B
The order in which accounts appear in the chart of accounts is:
A: stockholders equity, expenses, revenue, liabilities, assets
B: assets, stockholders equity, revenues,expenses, liabilities
C: assets, liabilities, stockholders equity, revenues, expenses
D: liabilities, assets, revenues, stockholders equity, expenses - ANS C
The difference between total debts and total credits of an account is called a:
A: ruling
