ACC 311 Exam 1 Questions And
Answers | Guaranteed Pass
Which of the following transactions results in a decrease in both total assets and net
income?
A. Accrual of salaries expense at year-end
B. Collecting cash from an account receivable
C. Recognizing revenue which was previously recorded as unearned revenue
D. Paying cash to satisfy an accounts payable
E. Adjustment of prepaid rent account which was used during the period CORRECT
ANSWERS Adjustment of prepaid rent account which was used during the period
Determine total gross profit for the firm during the year 2016:
Beginning inventory: $125,000
Ending inventory: $250,000
2016 total revenue: $1,400,000
Inventory purchases: $1,225,000
2016 COGS: $1,100,000
A/R balance increased $800,000
A. $125,000
B. $175,000
C. $300,000
D. $1,100,000
E. None of the above CORRECT ANSWERS $300,000
What is the effect on the financial statements when a company fails to adjust the
unearned revenue account for revenues at year-end?
A. net income and assets are understated
B. revenues and liabilities are understated
C. revenues are understated, stockholders' equity is overstated
, D. net income is understated, liabilities are overstated
E. retained earnings are overstated CORRECT ANSWERS net income is understated
and liabilities are overstated
Madrid Company:
2014 revenues: $77,500
2014 net income: $33,900
Dividends declared and paid during 2014: $5,700
Total assets at December 31, 2014: $217,000
Total stockholders' equity at December 31, 2014: $123,000
Retained earnings at December 31, 2014: $83,000
Which is correct?
A. 2014 expenses were $37,900
B. total liabilities at 12/31/14: $11,000
C. retained earnings increased $28,200 during 2014
D. common stock at 12/31/14: $206,000
E. none of the above CORRECT ANSWERS Retained earnings increased $28,200
during 2014
On May 1, 2014, Adams Co. borrowed $100,000 by signing one-year, 9% note payable.
Principal and interest will be paid 05/01/15. How much interest expense should be
reported on income statement for year ended 12/31/15?
A. 9,000
B. 3,000
C. 6,000
D. 4,500
E. 0 CORRECT ANSWERS $3,000
PxRxT
100,00 x .09 x 4 (mo)
Answers | Guaranteed Pass
Which of the following transactions results in a decrease in both total assets and net
income?
A. Accrual of salaries expense at year-end
B. Collecting cash from an account receivable
C. Recognizing revenue which was previously recorded as unearned revenue
D. Paying cash to satisfy an accounts payable
E. Adjustment of prepaid rent account which was used during the period CORRECT
ANSWERS Adjustment of prepaid rent account which was used during the period
Determine total gross profit for the firm during the year 2016:
Beginning inventory: $125,000
Ending inventory: $250,000
2016 total revenue: $1,400,000
Inventory purchases: $1,225,000
2016 COGS: $1,100,000
A/R balance increased $800,000
A. $125,000
B. $175,000
C. $300,000
D. $1,100,000
E. None of the above CORRECT ANSWERS $300,000
What is the effect on the financial statements when a company fails to adjust the
unearned revenue account for revenues at year-end?
A. net income and assets are understated
B. revenues and liabilities are understated
C. revenues are understated, stockholders' equity is overstated
, D. net income is understated, liabilities are overstated
E. retained earnings are overstated CORRECT ANSWERS net income is understated
and liabilities are overstated
Madrid Company:
2014 revenues: $77,500
2014 net income: $33,900
Dividends declared and paid during 2014: $5,700
Total assets at December 31, 2014: $217,000
Total stockholders' equity at December 31, 2014: $123,000
Retained earnings at December 31, 2014: $83,000
Which is correct?
A. 2014 expenses were $37,900
B. total liabilities at 12/31/14: $11,000
C. retained earnings increased $28,200 during 2014
D. common stock at 12/31/14: $206,000
E. none of the above CORRECT ANSWERS Retained earnings increased $28,200
during 2014
On May 1, 2014, Adams Co. borrowed $100,000 by signing one-year, 9% note payable.
Principal and interest will be paid 05/01/15. How much interest expense should be
reported on income statement for year ended 12/31/15?
A. 9,000
B. 3,000
C. 6,000
D. 4,500
E. 0 CORRECT ANSWERS $3,000
PxRxT
100,00 x .09 x 4 (mo)
