Introduction To Financial Accounting Midterm || || || || ||
1 Review Exam with answers
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which of the following is NOT a step in the Accounting Process?
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A. Identification
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B. Verification
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C. Recording
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D. Communication - ✔✔b. verification
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the historical cost principal states that - ✔✔assets should be recorded at their cost
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which of the following events is NOT recorded in the accounting records?
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A. equipment is purchased on account
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B. an employee is terminated
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C. a cash investment is made into the business
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D. the company pays a cash dividend - ✔✔B. an employee is terminated
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on the last day of the period, Alan Cesska company buys $900 machine on credit. this transaction
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will affect the:
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A. income statement only
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B. balance sheet only
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C. income statement, retained earnings statement only
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D. income statement, retained earnings statement, and balance sheet - ✔✔b. balance sheet only
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payment on account payable affects the components of the accounting equation in the following
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way: - ✔✔decrease to assets decrease to liabilities
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, Accounts that normally have debit balances are - ✔✔Assets, dividends, and expenses
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accounts that normally have credit balances are: - ✔✔Liabilities, revenue, and owner's capital
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Before posting a payment of $5,000, the Accounts Payable of Chola Corporation has a normal
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balance of $29,000. The balance after posting this transaction was - ✔✔$24,000
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A trial balance will not balance if - ✔✔a $100000 cash dividend is debited to Dividends for
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$100000 and credited to Cash for $10000. || || || || || ||
Posting - ✔✔transfers journal entries to ledger accounts
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which of the following statements about accrual basis of accounting is false?
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A. events that change a company's financial statements are recorded in the periods in which the
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events occur ||
B. revenue is recognized in the period in which services are performed
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C. this basis is in accord with GAAP
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D. revenue is recorded only when cash is received and expense is recorded only when cash is paid
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- ✔✔D. revenue is recorded only when cash is received and expense is recorded only when cash
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is paid ||
Kevin Corp. purchases a one year insurance Policy for his office building on January 1st 2020 for
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$12000. On January 31st, Kevin Corp. is preparing financial statements for the month of January.
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what will be the adjusting entry? - ✔✔debit insurance expense 1000 and credit prepaid insurance
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1000
Bob Corp. Borrows $500,000 due in three years. If the annual interest rate is 3%, what is the
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adjusting entry to record interest on the Note for the month of June? - ✔✔debit interest expense
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$1250 and credit interest payable $1250
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1 Review Exam with answers
|| || || ||
which of the following is NOT a step in the Accounting Process?
|| || || || || || || || || || ||
A. Identification
||
B. Verification
||
C. Recording
||
D. Communication - ✔✔b. verification
|| || || ||
the historical cost principal states that - ✔✔assets should be recorded at their cost
|| || || || || || || || || || || || ||
which of the following events is NOT recorded in the accounting records?
|| || || || || || || || || || ||
A. equipment is purchased on account
|| || || || ||
B. an employee is terminated
|| || || ||
C. a cash investment is made into the business
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D. the company pays a cash dividend - ✔✔B. an employee is terminated
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on the last day of the period, Alan Cesska company buys $900 machine on credit. this transaction
|| || || || || || || || || || || || || || || || ||
will affect the:
|| ||
A. income statement only
|| || ||
B. balance sheet only
|| || ||
C. income statement, retained earnings statement only
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D. income statement, retained earnings statement, and balance sheet - ✔✔b. balance sheet only
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payment on account payable affects the components of the accounting equation in the following
|| || || || || || || || || || || || || ||
way: - ✔✔decrease to assets decrease to liabilities
|| || || || || || ||
, Accounts that normally have debit balances are - ✔✔Assets, dividends, and expenses
|| || || || || || || || || || ||
accounts that normally have credit balances are: - ✔✔Liabilities, revenue, and owner's capital
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Before posting a payment of $5,000, the Accounts Payable of Chola Corporation has a normal
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balance of $29,000. The balance after posting this transaction was - ✔✔$24,000
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A trial balance will not balance if - ✔✔a $100000 cash dividend is debited to Dividends for
|| || || || || || || || || || || || || || || || ||
$100000 and credited to Cash for $10000. || || || || || ||
Posting - ✔✔transfers journal entries to ledger accounts
|| || || || || || ||
which of the following statements about accrual basis of accounting is false?
|| || || || || || || || || || ||
A. events that change a company's financial statements are recorded in the periods in which the
|| || || || || || || || || || || || || || || ||
events occur ||
B. revenue is recognized in the period in which services are performed
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C. this basis is in accord with GAAP
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D. revenue is recorded only when cash is received and expense is recorded only when cash is paid
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- ✔✔D. revenue is recorded only when cash is received and expense is recorded only when cash
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is paid ||
Kevin Corp. purchases a one year insurance Policy for his office building on January 1st 2020 for
|| || || || || || || || || || || || || || || || ||
$12000. On January 31st, Kevin Corp. is preparing financial statements for the month of January.
|| || || || || || || || || || || || || || ||
what will be the adjusting entry? - ✔✔debit insurance expense 1000 and credit prepaid insurance
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1000
Bob Corp. Borrows $500,000 due in three years. If the annual interest rate is 3%, what is the
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adjusting entry to record interest on the Note for the month of June? - ✔✔debit interest expense
|| || || || || || || || || || || || || || || || ||
$1250 and credit interest payable $1250
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