Question 1

Which of the following would be listed as a current liability?

Accepted Answer

A)   Cash in the bank.
B)   Notes payable due in two years.
C)   Supplies.
D)   Accounts payable.E) C) and D)
F) B) and D)

Question 2

Which of the following is true?

Accepted Answer

A)   Assets have debit balances and liabilities have credit balances.
B)   Assets and liabilities have credit balances.
C)   Assets have credit balances and liabilities have debit balances.
D)   Assets and liabilities have debit balances.E) B) and C)
F) A) and D)

Question 3

What is the amount of Total Assets on the Balance Sheet?

Accepted Answer

A)   $240,116
B)   $259,323
C)   $442,924
D)   $234,604E) A) and C)
F) A) and B)

Question 4

What is the total amount of current liabilities?

Accepted Answer

A)   $649,540
B)   $824,310
C)   $305,950
D)   $799,540E) C) and D)
F) A) and B)

Question 5

What is the amount of current liabilities on the classified balance sheet?

Accepted Answer

A)   $9,450
B)   $6,950
C)   $7,000
D)   $4,500E) B) and C)
F) A) and D)

Question 6

Which account would be increased by a debit?

Accepted Answer

A)   Retained earnings
B)   Accounts receivable
C)   Contributed capital
D)   Notes payableE) All of the above
F) B) and C)

Question 7

Typical cash flows from investing activities include:

Accepted Answer

A)   Payments to purchase property and equipment.
B)   Repayment of loans.
C)   Proceeds from issuing notes payable.
D)   Receipts from cash sales.E) A) and B)
F) A) and C)

Question 8

The MegaBuck movie studio's name has become famous for adventure movies. Another studio once offered to buy the name for $20 million, but MegaBuck turned down the offer. The MegaBuck balance sheet will show:

Accepted Answer

A)   The company's name under Other Assets, valued at $20 million.
B)   The company's name under Other Assets, valued conservatively at $10 million.
C)   The company's name under Accounts Receivable, valued at $20 million.
D)   The company's name will not be shown as an asset on the balance sheet. Only measurable exchanges are recorded.E) A) and B)
F) C) and D)

Question 9

Which of the following is not a recordable transaction?

Accepted Answer

A)   Issued shares of stock to investors in exchange for cash contributions of $4,000.
B)   Ordered inventory from suppliers for $3,000.
C)   Sold equipment to another company for $3,000 and accepted a note from the company promising payment in 6 months.
D)   Borrowed money from the bank by signing a promissory note for $2,000.E) C) and D)
F) None of the above

Question 10

If a company borrows money from a bank and signs an agreement to repay the loan several years from now, in which account would the company report the amount borrowed?

Accepted Answer

A)   Contributed Capital.
B)   Accounts Payable.
C)   Notes Payable.
D)   Bonds Payable.E) A) and B)
F) None of the above

Question 11

A company uses $100,000 in cash to pay off $100,000 in notes payable. This would result in a:

Accepted Answer

A)   $100,000 credit to Cash and a $100,000 debit to Notes Payable.
B)   $100,000 credit to Cash and a $100,000 credit to Notes Payable.
C)   $100,000 debit to Cash and a $100,000 credit to Notes Payable.
D)   $100,000 debit to Cash and a $100,000 debit to Notes Payable.E) A) and C)
F) All of the above

Question 12

Which of the following describes the classification and normal balance of the retained earnings account?

Accepted Answer

A)   Asset, debit
B)   Stockholders' equity, credit
C)   Liability, credit
D)   Stockholders' equity, debitE) None of the above
F) A) and B)

Question 13

Any item on a balance sheet labeled payable is a liability of that company.
Current Assets are listed on the balance sheet in order of how fast they are used up or can be turned into cash.
The basic accounting equation must always balance.

Accepted Answer

A)   None
B)   One
C)   Two
D)   ThreeE) B) and C)
F) None of the above

Question 14

How many of the following statements regarding posting and classification are true?
Posting journal entries involves copying the dollar amounts from the journal into the ledger.
If a $100 debit is erroneously posted to an account as a $100 credit, the accounts will be out of balance by
$100.
If a $5,000 liability is misclassified as stockholders' equity then the accounting equation will still balance.

Accepted Answer

A)   None
B)   One
C)   TwoD) B) and C)
E) A) and B)

Question 15

The characteristic shared by all liabilities is that they:

Accepted Answer

A)   provide a future economic benefit.
B)   result in an inflow of resources to the company.
C)   always end in the word "payable."
D)   obligate the company to do something in the future.E) A) and C)
F) None of the above

Question 16

The standard formatting for a journal entry lists the dollar amounts for:

Accepted Answer

A)   credits to the right of the dollar amounts for debits.
B)   debits and credits aligned equally to the right.
C)   debits to the right of the dollar amounts for credits.
D)   debits and credits aligned equally to the left.E) C) and D)
F) None of the above

Question 17

Your company buys a $2 million warehouse paying $300,000 in cash and issuing $1.7 million in promissory notes. This will be posted as:

Accepted Answer

A)   $2 million credited and $300,000 debited to assets; $1.7 million debited to liabilities.
B)   $2 million debited to assets and $2 million credited to liabilities.
C)   $2 million debited and $300,000 credited to assets; $1.7 million credited to liabilities.
D)   $2 million credited to assets and $2 million debited to liabilities.E) B) and C)
F) A) and D)

Question 18

A company issues $20 million in new stock. The company later uses this money to acquire a building. How many accounts will be affected by these transactions and which particular account names are most likely to be used to record the effects of these transactions?

Accepted Answer

A)   3 accounts affected: Contributed Capital, Cash, and Building.
B)   4 accounts affected: Contributed Capital, Cash, Liabilities, and Building.
C)   3 accounts affected: Cash, Property, Plant and Equipment, and Contributed Capital.
D)   3 accounts affected: Contributed Capital, Investments, and Cash.E) All of the above
F) C) and D)

Question 19

The list of names and reference numbers that the company will use when accounting for transactions is called the Chart of Accounts.

Accepted Answer

A) True 
 B)False

Question 20

If a company receives $20,000 cash on accounts receivable and uses the cash to pay $20,000 on accounts payable then:

Accepted Answer

A)   assets would increase by $20,000 while liabilities would decrease by $20,000.
B)   liabilities would decrease by $20,000 while stockholders' equity would increase by $20,000.
C)   assets would decrease by $20,000 while liabilities would decrease by $20,000.
D)   liabilities would decrease by $20,000 while stockholders' equity would decrease by $20,000.E) C) and D)
F) None of the above

Exam 2: Reporting Investing and Financing Results on the Balance Sheet

Which of the following is not a recordable transaction?

Correct Answer
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Correct Answer
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Which of the following would be listed as a current liability?

Correct Answer
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Which of the following describes the classification and normal balance of the retained earnings account?

Correct Answer
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A company uses $100,000 in cash to pay off $100,000 in notes payable. This would result in a:

Correct Answer
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If a company receives $20,000 cash on accounts receivable and uses the cash to pay $20,000 on accounts payable then:

Correct Answer
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A company issues $20 million in new stock. The company later uses this money to acquire a building. How many accounts will be affected by these transactions and which particular account names are most likely to be used to record the effects of these transactions?

Correct Answer
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If a company borrows money from a bank and signs an agreement to repay the loan several years from now, in which account would the company report the amount borrowed?

Correct Answer
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The standard formatting for a journal entry lists the dollar amounts for:

Correct Answer
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Any item on a balance sheet labeled payable is a liability of that company. Current Assets are listed on the balance sheet in order of how fast they are used up or can be turned into cash. The basic accounting equation must always balance.

Correct Answer
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Which of the following is true?

Correct Answer
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The list of names and reference numbers that the company will use when accounting for transactions is called the Chart of Accounts.

Correct Answer
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Typical cash flows from investing activities include:

Correct Answer
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Your company buys a $2 million warehouse paying $300,000 in cash and issuing $1.7 million in promissory notes. This will be posted as:

Correct Answer
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What is the amount of Total Assets on the Balance Sheet?

Correct Answer
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The MegaBuck movie studio's name has become famous for adventure movies. Another studio once offered to buy the name for $20 million, but MegaBuck turned down the offer. The MegaBuck balance sheet will show:

Correct Answer
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The characteristic shared by all liabilities is that they:

Correct Answer
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Which account would be increased by a debit?

Correct Answer
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What is the total amount of current liabilities?

Correct Answer
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What is the amount of current liabilities on the classified balance sheet?

Correct Answer
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Exam 2: Reporting Investing and Financing Results on the Balance Sheet

Which of the following is not a recordable transaction?

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Which of the following would be listed as a current liability?

Correct AnswerverifiedShow Answer

Which of the following describes the classification and normal balance of the retained earnings account?

Correct AnswerverifiedShow Answer

A company uses $100,000 in cash to pay off $100,000 in notes payable. This would result in a:

Correct AnswerverifiedShow Answer

If a company receives $20,000 cash on accounts receivable and uses the cash to pay $20,000 on accounts payable then:

Correct AnswerverifiedShow Answer

A company issues $20 million in new stock. The company later uses this money to acquire a building. How many accounts will be affected by these transactions and which particular account names are most likely to be used to record the effects of these transactions?

Correct AnswerverifiedShow Answer

If a company borrows money from a bank and signs an agreement to repay the loan several years from now, in which account would the company report the amount borrowed?

Correct AnswerverifiedShow Answer

The standard formatting for a journal entry lists the dollar amounts for:

Correct AnswerverifiedShow Answer

Any item on a balance sheet labeled payable is a liability of that company. Current Assets are listed on the balance sheet in order of how fast they are used up or can be turned into cash. The basic accounting equation must always balance.

Correct AnswerverifiedShow Answer

Which of the following is true?

Correct AnswerverifiedShow Answer

The list of names and reference numbers that the company will use when accounting for transactions is called the Chart of Accounts.

Correct AnswerverifiedShow Answer

Typical cash flows from investing activities include:

Correct AnswerverifiedShow Answer

Your company buys a $2 million warehouse paying $300,000 in cash and issuing $1.7 million in promissory notes. This will be posted as:

Correct AnswerverifiedShow Answer

What is the amount of Total Assets on the Balance Sheet?

Correct AnswerverifiedShow Answer

The MegaBuck movie studio's name has become famous for adventure movies. Another studio once offered to buy the name for $20 million, but MegaBuck turned down the offer. The MegaBuck balance sheet will show:

Correct AnswerverifiedShow Answer

The characteristic shared by all liabilities is that they:

Correct AnswerverifiedShow Answer

Which account would be increased by a debit?

Correct AnswerverifiedShow Answer

What is the total amount of current liabilities?

Correct AnswerverifiedShow Answer

What is the amount of current liabilities on the classified balance sheet?

Correct AnswerverifiedShow Answer

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