Question 1

Match the term with its definition.(There are more definitions than terms. )
-Accounting Equation

Accepted Answer

A) The abbreviation for an item posted on the left side of a T-account. 
B) A balance sheet that has not yet been publicly released. 
C) A transaction that is triggered automatically merely by the passage of time. 
D) When a company becomes included in the Fortune 500. 
E) The account credited when cash is received in exchange for stock issued.
F)The value of a company's public relations campaign.
G)An event that has no effect on the balance sheet and is not recorded in the financial statements.
H)A balance sheet that has assets and liabilities categorized as current vs.noncurrent.
I)Amounts owed to suppliers for goods or services bought on credit.
J)The abbreviation for an item posted on the right side of a T-account.
K)An exchange or event that has a direct impact on a company's financial statements.
L)Liabilities divided by assets.
M)Another name for stockholders' equity or shareholders' equity.
N)A method of recording a transaction in debit/credit format.
O)The expression that assets must equal liabilities plus stockholders' equity. 
A) The abbreviation for an item posted on the left side of a T-account. 
B) A balance sheet that has not yet been publicly released. 
C) A transaction that is triggered automatically merely by the passage of time. 
D) When a company becomes included in the Fortune 500. 
E) The account credited when cash is received in exchange for stock issued.
F)The value of a company's public relations campaign.
G)An event that has no effect on the balance sheet and is not recorded in the financial statements.
H)A balance sheet that has assets and liabilities categorized as current vs.noncurrent.
I)Amounts owed to suppliers for goods or services bought on credit.
J)The abbreviation for an item posted on the right side of a T-account.
K)An exchange or event that has a direct impact on a company's financial statements.
L)Liabilities divided by assets.
M)Another name for stockholders' equity or shareholders' equity.
N)A method of recording a transaction in debit/credit format.
O)The expression that assets must equal liabilities plus stockholders' equity.

Question 2

A debit would make which of the following accounts increase?

Accepted Answer

A) Common Stock 
B) Inventory 
C) Notes Payable 
D) Retained Earnings 
A) Common Stock 
B) Inventory 
C) Notes Payable 
D) Retained Earnings

Question 3

A company purchased equipment for use in the business at a cost of $36,000,one-fourth was paid in cash,and the company signed a note for the balance.The journal entry to record this transaction will include a:

Accepted Answer

A) debit to Notes Payable of $27,000. 
B) debit to Cash of $36,000. 
C) credit to Notes Payable of $27,000. 
D) debit to Equipment of $9,000. 
A) debit to Notes Payable of $27,000. 
B) debit to Cash of $36,000. 
C) credit to Notes Payable of $27,000. 
D) debit to Equipment of $9,000.

Question 4

Constable Co.reported the following information at December 31,Year 1: $\begin{array}{lr}
\text { Accounts Payable } & \$, 750 \
\text { Accounts Receivable } & 14,025 \
\text { Cash } & 35,235 \
\text { Common Stock } & 135,000 \
\text { Equipment } & 74,250 \
\text { Inventory } & 46,800 \
\text { Notes Payable due December 31, Year 3 } & 3,750 \
\text { Retained Earnings, December 31, Year 1 } & 21,135 \
\text { Wages Payable } & 3,675
\end{array}$ What is the amount of current liabilities on the classified balance sheet?

Accepted Answer

A) $14,175 
B) $10,425 
C) $170,310 
D) $6,750 
A) $14,175 
B) $10,425 
C) $170,310 
D) $6,750

Question 5

T-account:   Partial list of account balances at the end of the year:
$\begin{array}{lr}
\text { Cash } & \$ 28,000 \
\text { Accounts Receivable } & \text { Unknown } \
\text { Equipment } & 35,600 \
\text { Accounts Payable } & 5,900
\end{array}$ Which of the following is an accurate description of the economic events involving Accounts Receivable as documented in the T-account above?

Accepted Answer

A) Sales to customers on account exceeded the payments received from customers on account. 
B) Payments received from customers on account exceeded the sales made to customers on account. 
C) The company paid off its debt more than it incurred new debt. 
D) The company incurred more debt than it paid off. 
A) Sales to customers on account exceeded the payments received from customers on account. 
B) Payments received from customers on account exceeded the sales made to customers on account. 
C) The company paid off its debt more than it incurred new debt. 
D) The company incurred more debt than it paid off.

Question 6

For each of the following,indicate how the event would most likely be categorized.
-A company sells $2 million in goods for immediate payment.

Accepted Answer

A) NT - No Transaction 
B) EE - External Exchange 
C) IE - Internal Event 
A) NT - No Transaction 
B) EE - External Exchange 
C) IE - Internal Event

Question 7

T-account:   Partial list of account balances at the end of the year:
$\begin{array}{lr}
\text { Cash } & \$ 28,000 \
\text { Accounts Receivable } & \text { Unknown } \
\text { Equipment } & 35,600 \
\text { Accounts Payable } & 5,900
\end{array}$ The amount of total current assets that will be reported on the company's balance sheet at the end of the year is:

Accepted Answer

A) $362,600. 
B) $368,500. 
C) $139,500. 
D) $327,000. 
A) $362,600. 
B) $368,500. 
C) $139,500. 
D) $327,000.

Question 8

Every transaction increases at least one account and decreases at least one account.

Accepted Answer

A) True 
 B)False

Question 9

Which line items would be classified as noncurrent on a classified balance sheet?

Accepted Answer

A) Cash;Supplies;Accounts Payable 
B) Equipment;Other Assets;Notes Payable 
C) Supplies;Equipment;Notes Payable 
D) Accounts Receivable;Equipment;Other Assets 
A) Cash;Supplies;Accounts Payable 
B) Equipment;Other Assets;Notes Payable 
C) Supplies;Equipment;Notes Payable 
D) Accounts Receivable;Equipment;Other Assets

Question 10

Match each account name with the category that it would be included under in a classified balance sheet.
-Supplies

Accepted Answer

A) NCA - Noncurrent Asset 
B) CL - Current Liability 
C) SE - Stockholders' Equity 
D) CA - Current Asset 
A) NCA - Noncurrent Asset 
B) CL - Current Liability 
C) SE - Stockholders' Equity 
D) CA - Current Asset

Question 11

During its first year of operations,a company entered into the following transactions: Borrowed $20,000 from the bank by signing a promissory note.
Issued stock to owners for $40,000.
Purchased $4,000 of supplies on account.
Paid $1,600 to suppliers as payment on account for the supplies purchased.
What is the amount of total assets at the end of the year?

Accepted Answer

A) $64,000 
B) $22,400 
C) $60,000 
D) $62,400 
A) $64,000 
B) $22,400 
C) $60,000 
D) $62,400

Question 12

Accounts increase on the same side as they appear in the accounting equation: A = L + SE.

Accepted Answer

A) True 
 B)False

Question 13

Match the term with its definition.(There are more definitions than terms. )
-Journal Entry

Accepted Answer

A) A summary of account names and numbers. 
B) A simplified version of an account in the General Ledger. 
C) Compares balance sheet items from two different time periods. 
D) When a dollar value is assigned to an item recorded in the accounting system. 
E) A journal entry that lowers the balance of the account.
F)An amount that is posted on the left side of a T-account or ledger.
G)The concept that a company must keep separate accounts by time period.
H)An amount that is posted on the right side of a T-account or ledger.
I)Assets are initially recorded at the amount paid to acquire them.
J)When journal entries are recorded in the appropriate T-account or ledger.
K)When a company's balance sheet has been verified by an outside auditor.
L)The principle that a company should use the least optimistic measure,when uncertainty exists.
M)The concept that any transaction must have at least two effects on the accounting equation.
N)The mechanism used to record each transaction in the General Journal. 
A) A summary of account names and numbers. 
B) A simplified version of an account in the General Ledger. 
C) Compares balance sheet items from two different time periods. 
D) When a dollar value is assigned to an item recorded in the accounting system. 
E) A journal entry that lowers the balance of the account.
F)An amount that is posted on the left side of a T-account or ledger.
G)The concept that a company must keep separate accounts by time period.
H)An amount that is posted on the right side of a T-account or ledger.
I)Assets are initially recorded at the amount paid to acquire them.
J)When journal entries are recorded in the appropriate T-account or ledger.
K)When a company's balance sheet has been verified by an outside auditor.
L)The principle that a company should use the least optimistic measure,when uncertainty exists.
M)The concept that any transaction must have at least two effects on the accounting equation.
N)The mechanism used to record each transaction in the General Journal.

Question 14

Which of the following is a financing activity?

Accepted Answer

A) The business receives land and gives a check for $1,000. 
B) The business receives $1,000 cash and in exchange gives a promissory note. 
C) The business promises to hire an employee on the 15th of the month. 
D) The business orders supplies and promises to pay for them at the end of the month. 
A) The business receives land and gives a check for $1,000. 
B) The business receives $1,000 cash and in exchange gives a promissory note. 
C) The business promises to hire an employee on the 15th of the month. 
D) The business orders supplies and promises to pay for them at the end of the month.

Question 15

Transactions are first entered in the:

Accepted Answer

A) ledger. 
B) journal. 
C) T-accounts. 
D) chart of accounts. 
A) ledger. 
B) journal. 
C) T-accounts. 
D) chart of accounts.

Question 16

When a business issues stock,what does it give to its owners?

Accepted Answer

A) Note Payable 
B) Common Stock 
C) Retained Earnings 
D) Cash 
A) Note Payable 
B) Common Stock 
C) Retained Earnings 
D) Cash

Question 17

Selected accounts for Moonbills Corporation appear below.
Required:
For each account,indicate the following:
Part a.P1P1_0.95In the first column at the right,indicate the nature of each account,using the following abbreviations: Asset - A,Liability - L,Stockholders' Equity - SE.P1P1_E
Part b.In the second column,indicate the normal balance by inserting dr (for debit)or cr (for credit).

Accepted Answer

The answer of Selected accounts for Moonbills Corporation appear below.
Required:
For...

Question 18

Listed below are components of several transactions.Indicate whether a debit (dr)or credit (cr)would be required to record the component of the transaction.
-Increase in Inventory.

Accepted Answer

A) cr 
B) dr 
A) cr 
B) dr

Question 19

Match the term with its definition.(There are more definitions than terms. )
-Duality Of Effects

Accepted Answer

A) A summary of account names and numbers. 
B) A simplified version of an account in the General Ledger. 
C) Compares balance sheet items from two different time periods. 
D) When a dollar value is assigned to an item recorded in the accounting system. 
E) A journal entry that lowers the balance of the account.
F)An amount that is posted on the left side of a T-account or ledger.
G)The concept that a company must keep separate accounts by time period.
H)An amount that is posted on the right side of a T-account or ledger.
I)Assets are initially recorded at the amount paid to acquire them.
J)When journal entries are recorded in the appropriate T-account or ledger.
K)When a company's balance sheet has been verified by an outside auditor.
L)The principle that a company should use the least optimistic measure,when uncertainty exists.
M)The concept that any transaction must have at least two effects on the accounting equation.
N)The mechanism used to record each transaction in the General Journal. 
A) A summary of account names and numbers. 
B) A simplified version of an account in the General Ledger. 
C) Compares balance sheet items from two different time periods. 
D) When a dollar value is assigned to an item recorded in the accounting system. 
E) A journal entry that lowers the balance of the account.
F)An amount that is posted on the left side of a T-account or ledger.
G)The concept that a company must keep separate accounts by time period.
H)An amount that is posted on the right side of a T-account or ledger.
I)Assets are initially recorded at the amount paid to acquire them.
J)When journal entries are recorded in the appropriate T-account or ledger.
K)When a company's balance sheet has been verified by an outside auditor.
L)The principle that a company should use the least optimistic measure,when uncertainty exists.
M)The concept that any transaction must have at least two effects on the accounting equation.
N)The mechanism used to record each transaction in the General Journal.

Question 20

The Sweet Smell of Success Fragrance Company borrowed $60,000 from the bank to be paid back in five years and used all of the money to purchase land for a new store.Sweet Smell's balance sheet would show this as:

Accepted Answer

A) $60,000 under Land and $60,000 under Notes Payable (long-term). 
B) $60,000 under Depreciation Expense and $60,000 under Notes Payable (long-term). 
C) $60,000 under Land and $60,000 under Notes Receivable (long-term). 
D) $60,000 under Other Assets and $60,000 under Other Liabilities. 
A) $60,000 under Land and $60,000 under Notes Payable (long-term). 
B) $60,000 under Depreciation Expense and $60,000 under Notes Payable (long-term). 
C) $60,000 under Land and $60,000 under Notes Receivable (long-term). 
D) $60,000 under Other Assets and $60,000 under Other Liabilities.

Match the term with its definition.(There are more definitions than terms. ) -Accounting Equation

A debit would make which of the following accounts increase?

A company purchased equipment for use in the business at a cost of $36,000,one-fourth was paid in cash,and the company signed a note for the balance.The journal entry to record this transaction will include a:

For each of the following,indicate how the event would most likely be categorized. -A company sells $2 million in goods for immediate payment.

Every transaction increases at least one account and decreases at least one account.

Which line items would be classified as noncurrent on a classified balance sheet?

Match each account name with the category that it would be included under in a classified balance sheet. -Supplies

Accounts increase on the same side as they appear in the accounting equation: A = L + SE.

Match the term with its definition.(There are more definitions than terms. ) -Journal Entry

Which of the following is a financing activity?

Transactions are first entered in the:

When a business issues stock,what does it give to its owners?

Listed below are components of several transactions.Indicate whether a debit (dr)or credit (cr)would be required to record the component of the transaction. -Increase in Inventory.

Match the term with its definition.(There are more definitions than terms. ) -Duality Of Effects

The Sweet Smell of Success Fragrance Company borrowed $60,000 from the bank to be paid back in five years and used all of the money to purchase land for a new store.Sweet Smell's balance sheet would show this as:

Business Decisions and Financial Accounting

The Income Statement

Adjustments,Financial Statements,and Financial Results

Fraud,Internal Control,and Cash

Merchandising Operations and the Multistep Income Statement

Inventory and Cost of Goods Sold

Receivables,Bad Debt Expense,and Interest Revenue

Long-Lived Tangible and Intangible Assets

Liabilities

Stockholders Equity

Statement of Cash Flows

Measuring and Evaluating Financial Performance

Filters

Exam 2: The Balance Sheet

Match the term with its definition.(There are more definitions than terms. ) -Accounting Equation

A debit would make which of the following accounts increase?

A company purchased equipment for use in the business at a cost of $36,000,one-fourth was paid in cash,and the company signed a note for the balance.The journal entry to record this transaction will include a:

T-account: Partial list of account balances at the end of the year: Cash \ 28,000 Accounts Receivable Unknown Equipment 35,600 Accounts Payable 5,900 Which of the following is an accurate description of the economic events involving Accounts Receivable as documented in the T-account above?

For each of the following,indicate how the event would most likely be categorized. -A company sells $2 million in goods for immediate payment.

T-account: Partial list of account balances at the end of the year: Cash \ 28,000 Accounts Receivable Unknown Equipment 35,600 Accounts Payable 5,900 The amount of total current assets that will be reported on the company's balance sheet at the end of the year is:

Every transaction increases at least one account and decreases at least one account.

Which line items would be classified as noncurrent on a classified balance sheet?

Match each account name with the category that it would be included under in a classified balance sheet. -Supplies

Accounts increase on the same side as they appear in the accounting equation: A = L + SE.

Match the term with its definition.(There are more definitions than terms. ) -Journal Entry

Which of the following is a financing activity?

Transactions are first entered in the:

When a business issues stock,what does it give to its owners?

Listed below are components of several transactions.Indicate whether a debit (dr)or credit (cr)would be required to record the component of the transaction. -Increase in Inventory.

Match the term with its definition.(There are more definitions than terms. ) -Duality Of Effects

The Sweet Smell of Success Fragrance Company borrowed $60,000 from the bank to be paid back in five years and used all of the money to purchase land for a new store.Sweet Smell's balance sheet would show this as:

Business Decisions and Financial Accounting

The Income Statement

Adjustments,Financial Statements,and Financial Results

Fraud,Internal Control,and Cash

Merchandising Operations and the Multistep Income Statement

Inventory and Cost of Goods Sold

Receivables,Bad Debt Expense,and Interest Revenue

Long-Lived Tangible and Intangible Assets

Liabilities

Stockholders Equity

Statement of Cash Flows

Measuring and Evaluating Financial Performance

Filters