AC2760- Financial Accounting MGMT

MULTIPLE CHOICE. Choose the one alternative that best completes the statement or answers the question. 1) Scott's Camera Shop started the year with total assets of $80,000 and total liabilities of $40,000. During the year, the business earned revenues of $120,000 and incurred expenses of $70,000. Scott made no additional capital contributions during the year, but did make withdrawals of $60,000. What is the amount of owner's equity at the end of the year? A) $120,000 B) $70,000 C) $60,000 D) $30,000 2) The total assets and the total liabilities of Samantha Financial Services, are shown below. There were no capital contributions and withdrawals during the year. Assets Liabilities Beginning of year $425,000 $280,000 End of year 500,000 325,000 What was the amount of net income for the year? A) $45,000 B) $30,000 C) $75,000 D) $120,000 3) A business makes a payment of $1,400 on a note payable, consisting of a $200 interest payment and a $1,200 principal payment. Which of the following journal entries would be recorded? A) Notes Payable is credited for $1,200; Cash is credited for $200; and Interest Expense is debited for $1,400. B) Cash is credited for $1,200; Interest Expense is credited for $200; and Notes Payable is debited for $1,400. C) Notes Payable is credited for $1,400; Cash is debited for $1,200; and Interest Expense is debited for $200. D) Cash is credited for $1,400; Notes payable is debited for $1,200; and Interest Expense is debited for $200. 4) The following are the current month's balances for Toys Galore, before preparing the trial balance. Accounts Payable $8,000 Revenue 10,000 Cash 5,000 Expenses 1,750 Furniture 12,000 Accounts Receivable 14,000 Jones, Capital ??? Notes Payable 6,500 What amount should be shown for Jones, Capital on the trial balance? A) $8,250 B) $14,500 C) $31,000 D) $16,500 5) Robert Rogers owns a computer that is used in his consultancy services. As per the matching principle, the related account that should appear on the balance sheet as of December 31, 2014 is: A) Accumulated Depreciation. B) Depreciation Expense. C) Equipment Expense. D) Service Revenue. 6) Ursula Tax Planning Service has the following plant assets: Communications equipment: Cost, $6,720 with useful life of 8 years; Furniture: Cost, $18,000 with useful life of 12 years; and Computer: Cost, $12,000 with useful life of 4 years. Assume the salvage value of all the assets is zero and the straight-line method is used. Ursula's monthly depreciation journal entry will include a: A) credit to Accumulated Depreciation of $445. B) debit to Accumulated Depreciation of $445. C) credit to Depreciation Expense of $5,340. D) debit to Depreciation Expense of $5,340. 7) Which of the following accounts will be included in a post-closing trial balance?