SUA & AJE EXAM GUIDE
QUESTIONS AND ANSWERS
Which of the following matches relating to financial statements is inaccurate?
a. Balance Sheet: States the organization's financial position for a period of time.
b. Income Statement: States the organization's earnings for a period of time.
c. Statement of Cash Flows: State the organization's cash receipts and cash
disbursements for a period of time.
d. Statement of Owner's Equity: State the investments by and distributions to the
owner for a period of time.
e. All of the above matches are accurate. - ANSWER-A (at a specific time)
All transactions are first recorded in
a. The trial balance
b. The general journal
c. A T-account
d. The general ledger - ANSWER-B
The term post means to
a. Record a transaction in the general journal.
b. Prepare a trial balance.
c. Record the effect of transactions on the general ledger.
d. Cross-reference entries in the general ledger. - ANSWER-C
The Income Summary account
a. Appears on the balance sheet.
b. Appears on the income statement.
c. Appears on the statement of retained earnings.
d. Appears on the statement of cash flows.
e. Does not appear on any of the statements. - ANSWER-E
Southern Enterprises recently reported a gross profit of $50,000. Beginning and
ending inventories during
the period amounted to $32,000 and $41,000, respectively. If cost of goods sold
was 80% of net sales, the
company's net purchases must have been:
a. $41,000
b. $59,000
c. $191,000
d. $209,000 - ANSWER-D
, If a transaction during the year caused one asset to increase by $40,000, and
another asset to decrease by $30,000, which of the following events may have
caused these effects?
a. Merchandise inventory was purchased and paid for entirely with cash.
b. Cash was received in exchange for Land that was sold at a loss.
c. Equipment was purchased and paid for partly with Cash and with an Account
Payable for the difference.
d. Accounts Receivable were collected in Cash.
e. Merchandise inventory was sold on account. - ANSWER-C
Which of the following is not true of journals?
a. They are sometimes referred to as "books of original entry."
b. They are in chronological order.
c. They show the detail of transactions.
d. They are more likely than ledgers to be eliminated in a computerized system. -
ANSWER-D
First Company reported the following data:
Salaries payable, 1/1/x2 $ 5,000
Salaries paid during 19x2 40,000
Salaries expense for 19x2 42,000
The balance in the company's salaries payable account on December 31,
19x2,must have been:
a. $2,000
b. $3,000
c. $7,000
d. Not enough information to judge - ANSWER-C
On February 1, 19x2, Katz Co. purchased $700 of supplies. The Supplies Expense
Account was debited on that date. At the end of February, Katz desired to prepare
financial statements and discovered that only $300
of the supplies was still on hand. What adjusted entry should Katz record at the end
of February?
a. Supplies 400
Supplies expense 400
b. Supplies 300
Supplies expense 300
c. Supplies expense 400
Supplies 400
d. Supplies expense 300
Supplies 300 - ANSWER-B
In early May 19x4, Needlepoint Magazine sold a total of $600 of advertising to Best
Threads for ads to be run
QUESTIONS AND ANSWERS
Which of the following matches relating to financial statements is inaccurate?
a. Balance Sheet: States the organization's financial position for a period of time.
b. Income Statement: States the organization's earnings for a period of time.
c. Statement of Cash Flows: State the organization's cash receipts and cash
disbursements for a period of time.
d. Statement of Owner's Equity: State the investments by and distributions to the
owner for a period of time.
e. All of the above matches are accurate. - ANSWER-A (at a specific time)
All transactions are first recorded in
a. The trial balance
b. The general journal
c. A T-account
d. The general ledger - ANSWER-B
The term post means to
a. Record a transaction in the general journal.
b. Prepare a trial balance.
c. Record the effect of transactions on the general ledger.
d. Cross-reference entries in the general ledger. - ANSWER-C
The Income Summary account
a. Appears on the balance sheet.
b. Appears on the income statement.
c. Appears on the statement of retained earnings.
d. Appears on the statement of cash flows.
e. Does not appear on any of the statements. - ANSWER-E
Southern Enterprises recently reported a gross profit of $50,000. Beginning and
ending inventories during
the period amounted to $32,000 and $41,000, respectively. If cost of goods sold
was 80% of net sales, the
company's net purchases must have been:
a. $41,000
b. $59,000
c. $191,000
d. $209,000 - ANSWER-D
, If a transaction during the year caused one asset to increase by $40,000, and
another asset to decrease by $30,000, which of the following events may have
caused these effects?
a. Merchandise inventory was purchased and paid for entirely with cash.
b. Cash was received in exchange for Land that was sold at a loss.
c. Equipment was purchased and paid for partly with Cash and with an Account
Payable for the difference.
d. Accounts Receivable were collected in Cash.
e. Merchandise inventory was sold on account. - ANSWER-C
Which of the following is not true of journals?
a. They are sometimes referred to as "books of original entry."
b. They are in chronological order.
c. They show the detail of transactions.
d. They are more likely than ledgers to be eliminated in a computerized system. -
ANSWER-D
First Company reported the following data:
Salaries payable, 1/1/x2 $ 5,000
Salaries paid during 19x2 40,000
Salaries expense for 19x2 42,000
The balance in the company's salaries payable account on December 31,
19x2,must have been:
a. $2,000
b. $3,000
c. $7,000
d. Not enough information to judge - ANSWER-C
On February 1, 19x2, Katz Co. purchased $700 of supplies. The Supplies Expense
Account was debited on that date. At the end of February, Katz desired to prepare
financial statements and discovered that only $300
of the supplies was still on hand. What adjusted entry should Katz record at the end
of February?
a. Supplies 400
Supplies expense 400
b. Supplies 300
Supplies expense 300
c. Supplies expense 400
Supplies 400
d. Supplies expense 300
Supplies 300 - ANSWER-B
In early May 19x4, Needlepoint Magazine sold a total of $600 of advertising to Best
Threads for ads to be run
