ACG CORE EXAMS SET 2025/2026 QUESTIONS AND
SOLUTION RATED A+
✔✔Following is a list of account balances of Lincoln Lawn Services as of December 31,
after the first year of operations.
Accounts Receivable 6,000
Accounts Payable 5,000
Salaries Expense 7,000
Repairs Expense 900
Truck 11,000
Equipment 12,000
Notes Payable 26,100
Cash 20,000
Supplies Expense 200
Service Revenue 32,000
Gasoline Expense 7,200
Salaries Payable 1,200
Calculate the net income.
A. $49,000
B. $31,100
C. $16,700
D. $17,900 - ✔✔C. $16,700
Net Income = Revenue - Expenses
16,700 = 32,000 - 7,000 - 900 - 200 - 7,200
✔✔Following is a list of account balances of Nabers Delivery Services as of December
31, after the first year of operations.
Accounts Receivable 5,000
Accounts Payable 5,000
Salaries Expense 4,000
Repairs Expense 600
Truck 9,000
Equipment 10,000
Notes Payable 8,500
Cash 11,500
Supplies Expense 1,400
Service Revenue 31,000
Gasoline Expense 3,200
Salaries Payable 200
,What is the amount of total liabilities at the end of the year?
A. $22,900
B. $13,700
C. $13,500
D. $19,700 - ✔✔B. $13,700
Liabilities = Accounts Payable + Notes Payable + Salaries Payable
13,700 = 5,000 + 8,500 +200
✔✔A business purchases equipment by paying $6,276 in cash and issuing a note
payable of $19,177. Which of the following occurs?
A. Cash is credited for $6,276, Equipment is credited for $25,453, and Notes Payable is
debited for $19,177.
B. Cash is debited for $6,276, Equipment is credited for $19,177, and Notes Payable is
debited for $12,901.
C. Cash is debited for $6,276, Equipment is debited for $19,177, and Notes Payable is
credited for $25,453.
D. Cash is credited for $6,276, Equipment is debited for $25,453, and Notes Payable is
credited for $19,177. - ✔✔D. Cash is credited for $6,276, Equipment is debited for
$25,453, and Notes Payable is credited for $19,177.
✔✔Which of the following journal entries would be recorded if a business purchased
$800 of office supplies on account?
A. Accounts Payable 800
Office Supplies 800
B. Office Supplies 800
Cash 800
C. Cash 800
Office Supplies 800
D. Office Supplies 800
Accounts Payable 800 - ✔✔D. Office Supplies 800
Accounts Payable 800
✔✔Which of the following journal entries would be recorded if a corporation issued
common stock and received $3,000?
A. Cash 3,000
Service Revenue 3,000
, B. Cash 3,000
Unearned Revenue 3,000
C. Cash 3,000
Common Stock 3,000
D. Common Stock 3,000
Cash 3,000 - ✔✔C. Cash 3,000
Common Stock 3,000
✔✔Watson Foods, Inc. reported the following transactions for September 2019.
a) The business received $22,000 cash and issued common stock. It was credited to
Common Stock.
b) The business purchased office equipment for $9,000 for which $3,500 cash was paid
and the balance was put on a note payable.
c) Paid insurance expense of $1,800 cash.
d) Paid the September utility bill for $900 cash.
e) Paid $2,000 cash for September rent.
f) The business had sales of $10,000 in September. Of these sales, 60% were cash
sales, and the balance was credit sales.
g) The business paid $7,000 cash for office furniture.
What are the total liabilities at the end of September, 2019?
A. $1,800
B. $10,000
C.$9,000
D.$5,500 - ✔✔D. $5,500
Liabilities = Note Payable
5,500 = (9,000 - 3,500)
✔✔A business has the following transactions:
- The business received $16,000 cash and issued common stock to stockholders.
- The business purchases $700 of office supplies on account.
- The business purchases $2,000 of furniture on account.
- The business performs services to various clients totaling $13,000 on account.
- The business pays out $3,000 for salaries expense and $3,500 for rent expense.
- The business pays $700 to a supplier for the office supplies purchased earlier.
- The business collects $1,000 from one of its clients for services rendered earlier in the
month.
SOLUTION RATED A+
✔✔Following is a list of account balances of Lincoln Lawn Services as of December 31,
after the first year of operations.
Accounts Receivable 6,000
Accounts Payable 5,000
Salaries Expense 7,000
Repairs Expense 900
Truck 11,000
Equipment 12,000
Notes Payable 26,100
Cash 20,000
Supplies Expense 200
Service Revenue 32,000
Gasoline Expense 7,200
Salaries Payable 1,200
Calculate the net income.
A. $49,000
B. $31,100
C. $16,700
D. $17,900 - ✔✔C. $16,700
Net Income = Revenue - Expenses
16,700 = 32,000 - 7,000 - 900 - 200 - 7,200
✔✔Following is a list of account balances of Nabers Delivery Services as of December
31, after the first year of operations.
Accounts Receivable 5,000
Accounts Payable 5,000
Salaries Expense 4,000
Repairs Expense 600
Truck 9,000
Equipment 10,000
Notes Payable 8,500
Cash 11,500
Supplies Expense 1,400
Service Revenue 31,000
Gasoline Expense 3,200
Salaries Payable 200
,What is the amount of total liabilities at the end of the year?
A. $22,900
B. $13,700
C. $13,500
D. $19,700 - ✔✔B. $13,700
Liabilities = Accounts Payable + Notes Payable + Salaries Payable
13,700 = 5,000 + 8,500 +200
✔✔A business purchases equipment by paying $6,276 in cash and issuing a note
payable of $19,177. Which of the following occurs?
A. Cash is credited for $6,276, Equipment is credited for $25,453, and Notes Payable is
debited for $19,177.
B. Cash is debited for $6,276, Equipment is credited for $19,177, and Notes Payable is
debited for $12,901.
C. Cash is debited for $6,276, Equipment is debited for $19,177, and Notes Payable is
credited for $25,453.
D. Cash is credited for $6,276, Equipment is debited for $25,453, and Notes Payable is
credited for $19,177. - ✔✔D. Cash is credited for $6,276, Equipment is debited for
$25,453, and Notes Payable is credited for $19,177.
✔✔Which of the following journal entries would be recorded if a business purchased
$800 of office supplies on account?
A. Accounts Payable 800
Office Supplies 800
B. Office Supplies 800
Cash 800
C. Cash 800
Office Supplies 800
D. Office Supplies 800
Accounts Payable 800 - ✔✔D. Office Supplies 800
Accounts Payable 800
✔✔Which of the following journal entries would be recorded if a corporation issued
common stock and received $3,000?
A. Cash 3,000
Service Revenue 3,000
, B. Cash 3,000
Unearned Revenue 3,000
C. Cash 3,000
Common Stock 3,000
D. Common Stock 3,000
Cash 3,000 - ✔✔C. Cash 3,000
Common Stock 3,000
✔✔Watson Foods, Inc. reported the following transactions for September 2019.
a) The business received $22,000 cash and issued common stock. It was credited to
Common Stock.
b) The business purchased office equipment for $9,000 for which $3,500 cash was paid
and the balance was put on a note payable.
c) Paid insurance expense of $1,800 cash.
d) Paid the September utility bill for $900 cash.
e) Paid $2,000 cash for September rent.
f) The business had sales of $10,000 in September. Of these sales, 60% were cash
sales, and the balance was credit sales.
g) The business paid $7,000 cash for office furniture.
What are the total liabilities at the end of September, 2019?
A. $1,800
B. $10,000
C.$9,000
D.$5,500 - ✔✔D. $5,500
Liabilities = Note Payable
5,500 = (9,000 - 3,500)
✔✔A business has the following transactions:
- The business received $16,000 cash and issued common stock to stockholders.
- The business purchases $700 of office supplies on account.
- The business purchases $2,000 of furniture on account.
- The business performs services to various clients totaling $13,000 on account.
- The business pays out $3,000 for salaries expense and $3,500 for rent expense.
- The business pays $700 to a supplier for the office supplies purchased earlier.
- The business collects $1,000 from one of its clients for services rendered earlier in the
month.
