UTA Accounting Entrance Exam
The accounting profession can be divided into three major categories; specifically, the practice of public
accounting, private accounting, and governmental accounting. A somewhat unique and important
service of public accountants is: - Correct Answers Auditing
The primary private sector that oversees external financial reporting standards is the: - Correct Answers
Financial Accounting Standards Board
Which of the following equations properly represents a derivation of the fundamental accounting
equation? - Correct Answers Assets - liabilities = owner's equity.
Wilson Company owns land which cost $100,000. If a "quick sale" of the land was necessary to generate
cash, the company feels it would receive only $80,000. The company continues to report the asset on
the balance sheet at $100,000. This is justified under which of the following concepts? - Correct
Answers The historical-cost principle AND the value is tied to objective and verifiable past transactions.
Retained earnings will change over time because of several factors. Which of the following factors would
explain an increase in retained earnings? - Correct Answers Net income
Which of these would be accounted for as an expense? - Correct Answers Payment of the current
period's rent.
Which of the following transactions would have no impact on stockholders' equity? - Correct Answers
Purchases of land from the proceeds of a bank loan.
Which of the following would not be included on a balance sheet? - Correct Answers Sales.
_______ is the excess of a company's revenues over expenses for a given time period. - Correct Answers
Income
The general ledger is comprised of numerous individual asset, liability, equity, revenue, and expense -
Correct Answers Accounts.
,A liability account should be increased with a _______ and decreased with a _____ - Correct Answers
Credit, Debit
The normal balance of an expense account is a _____ balance. - Correct Answers debit
The normal balances of accounts correspond to the fundamental _______ - Correct Answers Accounting
equation
Evidence of transactions is often provided by receipt of issuance of accounting forms known as - Correct
Answers Source Documents
In any transaction, total debits must - Correct Answers Equal total credits.
To record the payment of a previously established account payable requires a _________ to the
Accounts Payable account. - Correct Answers Debit
RELIC - Correct Answers Revenue, Equity, and Liabilities are Increased with Credits
DEAD - Correct Answers Debits increase Expenses, Assets, and Dividends.
Of the following account types, which would be increased by a debit? - Correct Answers Assets and
expenses
Which of these statements is correct? - Correct Answers The general ledger is posted from transactions
recorded in the general journal.
General journal is a chronological record of transactoins.
Journalization - Correct Answers The process of converting transactions and events into debit/credit
format.
, Failure to record the receipt of a utility bill for services already received will result in: - Correct Answers
An overstatement of equity.
The journal entry would involve a debit to expense and a credit to liability. Failing to record this entry
would understate expenses and liabilities and in turn overstate owners' equity.
The proper journal entry to record Ransom Company's billing of clients for $500 of services rendered is: -
Correct Answers Accounts Receivable 500
Service Revenue 500
The proper journal entry to record $1,000 of Dividends paid by Myer's Corporation is: - Correct Answers
Dividends 1,000
Cash 1,000
Lynn Lipincott invested land valued at $5,000 in her business. This transaction would be recorded by: -
Correct Answers Land 5,000
Capital Stock 5,000
The trial balance: - Correct Answers Provides a listing of the balance of each account in active use.
Accrual Basis - Correct Answers The accounting process whereby revenues are measured and recorded
as earned, while expenses are recorded as incurred.
Revenue Recognition - Correct Answers 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 - Correct Answers To associate expenses with revenues, and record them in
simultaneous accounting periods
The accounting profession can be divided into three major categories; specifically, the practice of public
accounting, private accounting, and governmental accounting. A somewhat unique and important
service of public accountants is: - Correct Answers Auditing
The primary private sector that oversees external financial reporting standards is the: - Correct Answers
Financial Accounting Standards Board
Which of the following equations properly represents a derivation of the fundamental accounting
equation? - Correct Answers Assets - liabilities = owner's equity.
Wilson Company owns land which cost $100,000. If a "quick sale" of the land was necessary to generate
cash, the company feels it would receive only $80,000. The company continues to report the asset on
the balance sheet at $100,000. This is justified under which of the following concepts? - Correct
Answers The historical-cost principle AND the value is tied to objective and verifiable past transactions.
Retained earnings will change over time because of several factors. Which of the following factors would
explain an increase in retained earnings? - Correct Answers Net income
Which of these would be accounted for as an expense? - Correct Answers Payment of the current
period's rent.
Which of the following transactions would have no impact on stockholders' equity? - Correct Answers
Purchases of land from the proceeds of a bank loan.
Which of the following would not be included on a balance sheet? - Correct Answers Sales.
_______ is the excess of a company's revenues over expenses for a given time period. - Correct Answers
Income
The general ledger is comprised of numerous individual asset, liability, equity, revenue, and expense -
Correct Answers Accounts.
,A liability account should be increased with a _______ and decreased with a _____ - Correct Answers
Credit, Debit
The normal balance of an expense account is a _____ balance. - Correct Answers debit
The normal balances of accounts correspond to the fundamental _______ - Correct Answers Accounting
equation
Evidence of transactions is often provided by receipt of issuance of accounting forms known as - Correct
Answers Source Documents
In any transaction, total debits must - Correct Answers Equal total credits.
To record the payment of a previously established account payable requires a _________ to the
Accounts Payable account. - Correct Answers Debit
RELIC - Correct Answers Revenue, Equity, and Liabilities are Increased with Credits
DEAD - Correct Answers Debits increase Expenses, Assets, and Dividends.
Of the following account types, which would be increased by a debit? - Correct Answers Assets and
expenses
Which of these statements is correct? - Correct Answers The general ledger is posted from transactions
recorded in the general journal.
General journal is a chronological record of transactoins.
Journalization - Correct Answers The process of converting transactions and events into debit/credit
format.
, Failure to record the receipt of a utility bill for services already received will result in: - Correct Answers
An overstatement of equity.
The journal entry would involve a debit to expense and a credit to liability. Failing to record this entry
would understate expenses and liabilities and in turn overstate owners' equity.
The proper journal entry to record Ransom Company's billing of clients for $500 of services rendered is: -
Correct Answers Accounts Receivable 500
Service Revenue 500
The proper journal entry to record $1,000 of Dividends paid by Myer's Corporation is: - Correct Answers
Dividends 1,000
Cash 1,000
Lynn Lipincott invested land valued at $5,000 in her business. This transaction would be recorded by: -
Correct Answers Land 5,000
Capital Stock 5,000
The trial balance: - Correct Answers Provides a listing of the balance of each account in active use.
Accrual Basis - Correct Answers The accounting process whereby revenues are measured and recorded
as earned, while expenses are recorded as incurred.
Revenue Recognition - Correct Answers 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 - Correct Answers To associate expenses with revenues, and record them in
simultaneous accounting periods
