UTA ACCOUNTING ENTRANCE EXAMS SCRIPT UPDATED
QUESTIONS AND ANSWERS GRADED A+
✔✔Lynn Lipincott invested land valued at $5,000 in her business. This transaction
would be recorded by: - ✔✔Land 5,000
Capital Stock 5,000
✔✔The trial balance: - ✔✔Provides a listing of the balance of each account in active
use.
✔✔Accrual Basis - ✔✔The accounting process whereby revenues are measured and
recorded as earned, while expenses are recorded as incurred.
✔✔Revenue Recognition - ✔✔The point at which revenue is recognized in the
accounting records; ordinarily the point of sale.
Two condition must be met 1) an exchange transaction (sale and delivery), and 2) the
earnings process being complete (Production).
✔✔Matching principle - ✔✔To associate expenses with revenues, and record them in
simultaneous accounting periods
✔✔For purposes of measuring business income, the life of a business is: - ✔✔divided
into discrete accounting periods.
✔✔Adjusting entries at the end of an accounting period would not be required for which
of the following - ✔✔Revenue that has been earned and recorded in the accounting
records.
✔✔(1 of 3) Blankenship Company pays its employees every Friday for work rendered
that week. The payroll is typically $10,000 per week. Which of the following journal
entries would Blankenship ordinarily record on the Friday payroll? - ✔✔Salary Expense
10,000
Cash. 10,000
✔✔(2 of 3) Blankenship Company pays its employees every Friday for work rendered
that week. The payroll is typically $10,000 per week. What journal entry would be
recorded (on Wednesday) if the end of the accounting period occurred on a Wednesday
(3 days x $2,000 per day = $6,000)? - ✔✔Salary Expense 6,000 (Increased with a
debit)
Salary Payable 6,000. (Increased with a credit)
✔✔(3 of 3) Blankenship Company pays its employees every Friday for work rendered
that week. The payroll is typically $10,000 per week. Blankenship's year-end occurred
, on Wednesday, at which time a correct adjusting entry was recorded. On the following
Friday, which of the following payroll journal entries should be recorded? - ✔✔Salary
Expense 4,000 (Thursday and Friday)
Salary Payable. 6,000 (Established at end of acct. period)
Cash. 10,000
✔✔The appropriate journal entry to record equipment depreciation expense would
consist of a debit to Depreciation Expense and a credit to which of the following
accounts? - ✔✔Accumulated Depreciation: Equipment
✔✔At the end of the current accounting period, Johnson Company failed to record
utilities consumed during the period. Johnson will be billed for the utilities during the
next accounting period. As a result, current period assets, liabilities, equity, and income,
respectively, are: - ✔✔Correct (assets), understated (liabilities), overstated (equity),
overstated (income)
The entry would involve a debit to Utilities Expense and a credit to Utilities Payable.
✔✔On November 1, 20X1, Limit Company purchase a one-year insurance policy for
$12,000. Limit Company debited Cash and Credited Prepaid Insurance for $12,000. At
the end of December, 20X1, $2,000 of insurance had expired. The entry to properly
state all accounts involved on December 31, 20X1, would be: - ✔✔Insurance Expense.
2,000
Prepaid Insurance. 22,000
Cash. 24,000
✔✔Accountants downplay the economic concept of profit and employ a more objective
____________ in computing net income. - ✔✔Transactions approach
✔✔The _________ is paramount to income, measurement, and holds that an
organization's life can be divided into discrete measurement intervals. - ✔✔Periodicity
assumption
✔✔An accounting year that covers a period of time other than January 1 through
December 31 is typically referred to as a __________ year. - ✔✔Fiscal
✔✔Accrual basis revenue is generally recognized at the time services are ______ or
when goods are ________ and __________to a customer - ✔✔rendered, sold,
delivered
✔✔The ____________ holds that expenses should be recorded in the same time period
as the revenues they helped to produce. - ✔✔Matching principle
QUESTIONS AND ANSWERS GRADED A+
✔✔Lynn Lipincott invested land valued at $5,000 in her business. This transaction
would be recorded by: - ✔✔Land 5,000
Capital Stock 5,000
✔✔The trial balance: - ✔✔Provides a listing of the balance of each account in active
use.
✔✔Accrual Basis - ✔✔The accounting process whereby revenues are measured and
recorded as earned, while expenses are recorded as incurred.
✔✔Revenue Recognition - ✔✔The point at which revenue is recognized in the
accounting records; ordinarily the point of sale.
Two condition must be met 1) an exchange transaction (sale and delivery), and 2) the
earnings process being complete (Production).
✔✔Matching principle - ✔✔To associate expenses with revenues, and record them in
simultaneous accounting periods
✔✔For purposes of measuring business income, the life of a business is: - ✔✔divided
into discrete accounting periods.
✔✔Adjusting entries at the end of an accounting period would not be required for which
of the following - ✔✔Revenue that has been earned and recorded in the accounting
records.
✔✔(1 of 3) Blankenship Company pays its employees every Friday for work rendered
that week. The payroll is typically $10,000 per week. Which of the following journal
entries would Blankenship ordinarily record on the Friday payroll? - ✔✔Salary Expense
10,000
Cash. 10,000
✔✔(2 of 3) Blankenship Company pays its employees every Friday for work rendered
that week. The payroll is typically $10,000 per week. What journal entry would be
recorded (on Wednesday) if the end of the accounting period occurred on a Wednesday
(3 days x $2,000 per day = $6,000)? - ✔✔Salary Expense 6,000 (Increased with a
debit)
Salary Payable 6,000. (Increased with a credit)
✔✔(3 of 3) Blankenship Company pays its employees every Friday for work rendered
that week. The payroll is typically $10,000 per week. Blankenship's year-end occurred
, on Wednesday, at which time a correct adjusting entry was recorded. On the following
Friday, which of the following payroll journal entries should be recorded? - ✔✔Salary
Expense 4,000 (Thursday and Friday)
Salary Payable. 6,000 (Established at end of acct. period)
Cash. 10,000
✔✔The appropriate journal entry to record equipment depreciation expense would
consist of a debit to Depreciation Expense and a credit to which of the following
accounts? - ✔✔Accumulated Depreciation: Equipment
✔✔At the end of the current accounting period, Johnson Company failed to record
utilities consumed during the period. Johnson will be billed for the utilities during the
next accounting period. As a result, current period assets, liabilities, equity, and income,
respectively, are: - ✔✔Correct (assets), understated (liabilities), overstated (equity),
overstated (income)
The entry would involve a debit to Utilities Expense and a credit to Utilities Payable.
✔✔On November 1, 20X1, Limit Company purchase a one-year insurance policy for
$12,000. Limit Company debited Cash and Credited Prepaid Insurance for $12,000. At
the end of December, 20X1, $2,000 of insurance had expired. The entry to properly
state all accounts involved on December 31, 20X1, would be: - ✔✔Insurance Expense.
2,000
Prepaid Insurance. 22,000
Cash. 24,000
✔✔Accountants downplay the economic concept of profit and employ a more objective
____________ in computing net income. - ✔✔Transactions approach
✔✔The _________ is paramount to income, measurement, and holds that an
organization's life can be divided into discrete measurement intervals. - ✔✔Periodicity
assumption
✔✔An accounting year that covers a period of time other than January 1 through
December 31 is typically referred to as a __________ year. - ✔✔Fiscal
✔✔Accrual basis revenue is generally recognized at the time services are ______ or
when goods are ________ and __________to a customer - ✔✔rendered, sold,
delivered
✔✔The ____________ holds that expenses should be recorded in the same time period
as the revenues they helped to produce. - ✔✔Matching principle
