Question 1

Revenue, expense, asset, liability and owners' equity accounts normally have either a debit or a credit balance. Which of the following is incorrect?

Accepted Answer

A)  Liability - credit 
B)  Revenue - debit 
C)  Asset - debit 
D)  Expense - debit 
E)  Owners' Equity - Credit 
A)  Liability - credit 
B)  Revenue - debit 
C)  Asset - debit 
D)  Expense - debit 
E)  Owners' Equity - Credit

Question 2

In the current year the Budget Hotel earned $100,000 profit. Its assets increased by $120,000 and its liabilities increased by $40,000. What was the value of the owners' contribution to capital or dividend declared and paid during the year?

Accepted Answer

A)  Dividend declared and paid of $20,000. 
B)  Contribution of $20,000. 
C)  Dividend declared and paid of $10,000. 
D)  Contribution of $10,000. 
E)  None of the above. 
A)  Dividend declared and paid of $20,000. 
B)  Contribution of $20,000. 
C)  Dividend declared and paid of $10,000. 
D)  Contribution of $10,000. 
E)  None of the above.

Question 3

Last year, assets of Adventure Tours increased by $7,000 and the company's liabilities decreased by $3,000. During this time the owners' equity balance in the company must have:

Accepted Answer

A)  Increased by $4,000 
B)  Decreased by $4,000 
C)  Increased by $10,000 
D)  Decreased by $10,000 
E)  None of the above 
A)  Increased by $4,000 
B)  Decreased by $4,000 
C)  Increased by $10,000 
D)  Decreased by $10,000 
E)  None of the above

Question 4

For the current financial year a hotel had $350,000 in its retained earnings account at the beginning of the year. During the year it earned $80,000 in profit and paid $32,000 in dividends to its owners. The balance sheet at the end of the current financial year should reflect a retained earnings balance of:

Accepted Answer

A)  $430,000. 
B)  $318,000. 
C)  $398,000. 
D)  $48,000. 
E)  $80,000. 
A)  $430,000. 
B)  $318,000. 
C)  $398,000. 
D)  $48,000. 
E)  $80,000.

Question 5

On the 15th February a hotel sold four cases of wine at a conference function for $2,160 cash. The four cases cost the hotel $1,000 on the 1st February. The set of accounting entries that would be recorded when the cases were sold on the 15th February are:

Accepted Answer

A)  Debit revenue $2,160; Credit cash $2,160
Debit Inventory $1,000; Credit cost of goods sold $1,000 
B)  Debit Inventory $1,000; Credit cash $1,000
Debit cash $2,160; Credit revenue $2,160 
C)  Debit inventory $1,000; Credit cash $1,000
Debit cost of goods sold $1,000; Credit inventory $1,000 
D)  Debit cash $2,160; Credit revenue $2,160
Debit cost of goods sold $1,000; Credit inventory $1,000 
E)  Debit inventory $1,000; Credit cash $1,000
Debit cash $1,000; Credit revenue $1,000 
A)  Debit revenue $2,160; Credit cash $2,160
Debit Inventory $1,000; Credit cost of goods sold $1,000 
B)  Debit Inventory $1,000; Credit cash $1,000
Debit cash $2,160; Credit revenue $2,160 
C)  Debit inventory $1,000; Credit cash $1,000
Debit cost of goods sold $1,000; Credit inventory $1,000 
D)  Debit cash $2,160; Credit revenue $2,160
Debit cost of goods sold $1,000; Credit inventory $1,000 
E)  Debit inventory $1,000; Credit cash $1,000
Debit cash $1,000; Credit revenue $1,000

Question 6

The Smith Show Events company took up a $100,000 bank loan last month. The entry to record this transaction involves:

Accepted Answer

A)  Debiting 'expenses' and crediting 'cash' 
B)  Debiting 'cash' and crediting 'expenses' 
C)  Debiting 'cash' and crediting 'loan payable' 
D)  Debiting 'loan payable' and crediting 'money borrowed' 
E)  None of the above. 
A)  Debiting 'expenses' and crediting 'cash' 
B)  Debiting 'cash' and crediting 'expenses' 
C)  Debiting 'cash' and crediting 'loan payable' 
D)  Debiting 'loan payable' and crediting 'money borrowed' 
E)  None of the above.

Question 7

Journal entries:

Accepted Answer

A)  Are presented in account number sequence. 
B)  Provide a chronological record of all transactions. 
C)  Are presented in account alphabetical sequence. 
D)  Use a "T-account" layout. 
E)  None of the above are true. 
A)  Are presented in account number sequence. 
B)  Provide a chronological record of all transactions. 
C)  Are presented in account alphabetical sequence. 
D)  Use a "T-account" layout. 
E)  None of the above are true.

Question 8

Last year, assets of the Adventure Tours company increased by $2,800 and the company's liabilities decreased by $1,200. During this time the owners' equity balance in the company must have:

Accepted Answer

A)  Increased by $1,600 
B)  Decreased by $1,600 
C)  Increased by $4,000 
D)  Decreased by $4,000 
E)  None of the above 
A)  Increased by $1,600 
B)  Decreased by $1,600 
C)  Increased by $4,000 
D)  Decreased by $4,000 
E)  None of the above

Question 9

In a hotel, which of the following is not normally treated as a current asset?

Accepted Answer

A)  Prepaid insurance. 
B)  Inventory of linen. 
C)  Marketable securities. 
D)  Beer held in bar fridge. 
E)  Cash at bank. 
A)  Prepaid insurance. 
B)  Inventory of linen. 
C)  Marketable securities. 
D)  Beer held in bar fridge. 
E)  Cash at bank.

Revenue, expense, asset, liability and owners' equity accounts normally have either a debit or a credit balance. Which of the following is incorrect?

In the current year the Budget Hotel earned $100,000 profit. Its assets increased by $120,000 and its liabilities increased by $40,000. What was the value of the owners' contribution to capital or dividend declared and paid during the year?

Last year, assets of Adventure Tours increased by $7,000 and the company's liabilities decreased by $3,000. During this time the owners' equity balance in the company must have:

On the 15^th February a hotel sold four cases of wine at a conference function for $2,160 cash. The four cases cost the hotel $1,000 on the 1^st February. The set of accounting entries that would be recorded when the cases were sold on the 15^th February are:

The Smith Show Events company took up a $100,000 bank loan last month. The entry to record this transaction involves:

Journal entries:

Last year, assets of the Adventure Tours company increased by $2,800 and the company's liabilities decreased by $1,200. During this time the owners' equity balance in the company must have:

In a hotel, which of the following is not normally treated as a current asset?

Introduction: Hospitality Decision Makers Use of Accounting

Analysing Transactions and Preparing Year End Financial Statements

Adjusting and Closing Entries

Financial Statement Analysis

Internal Control

Cost Management Issues

Cost-Volume-Profit Analysis

Budgeting and Responsibility Accounting

Flexible Budgeting and Variance Analysis

Performance Measurement

Cost Information and Pricing

Working Capital Management

Investment Decision Making

Other Managerial Finance Issues

Revenue Management

Filters

Exam 3: Double Entry Accounting

Revenue, expense, asset, liability and owners' equity accounts normally have either a debit or a credit balance. Which of the following is incorrect?

In the current year the Budget Hotel earned $100,000 profit. Its assets increased by $120,000 and its liabilities increased by $40,000. What was the value of the owners' contribution to capital or dividend declared and paid during the year?

Last year, assets of Adventure Tours increased by $7,000 and the company's liabilities decreased by $3,000. During this time the owners' equity balance in the company must have:

On the 15th February a hotel sold four cases of wine at a conference function for $2,160 cash. The four cases cost the hotel $1,000 on the 1st February. The set of accounting entries that would be recorded when the cases were sold on the 15th February are:

The Smith Show Events company took up a $100,000 bank loan last month. The entry to record this transaction involves:

Journal entries:

Last year, assets of the Adventure Tours company increased by $2,800 and the company's liabilities decreased by $1,200. During this time the owners' equity balance in the company must have:

In a hotel, which of the following is not normally treated as a current asset?

Introduction: Hospitality Decision Makers Use of Accounting

Analysing Transactions and Preparing Year End Financial Statements

Adjusting and Closing Entries

Financial Statement Analysis

Internal Control

Cost Management Issues

Cost-Volume-Profit Analysis

Budgeting and Responsibility Accounting

Flexible Budgeting and Variance Analysis

Performance Measurement

Cost Information and Pricing

Working Capital Management

Investment Decision Making

Other Managerial Finance Issues

Revenue Management

Filters

On the 15^th February a hotel sold four cases of wine at a conference function for $2,160 cash. The four cases cost the hotel $1,000 on the 1^st February. The set of accounting entries that would be recorded when the cases were sold on the 15^th February are: