Acc 290 Final

1) Which financial statement is used to determine cash generated from operations?

C. Statement of cash flows

2) In terms of sequence, in what order must the four basic financial statements be prepared?

A. Balance sheet, income statement, statement of cash flows, and capital statement

3) In classifying transactions, which of the following is true in regard to assets?

A. Normal balances and increases are debits.

4) An increase in an expense account must be

C. either debited or credited, depending on the circumstances

5) ABC Corporation issues 100 shares of $1 par common stock at $5 per share, which of the following is the correct journal entry?

C.

Cash $500

Paid-in Capital, Excess of Par $400

Common Stock $100

6) In the first month of operations, the total of the debit entries to the cash account amounted to $1,400 and the total of the credit entries to the cash account amounted to $600. The cash account has a

C. $800 debit balance

7) Which ledger contains control accounts?

B. General ledger

8) Smith is a customer of ABC Corporation. Smith typically purchases merchandise from ABC on account. Which ledger would ABC use to keep track of the details of Smith's account?

A. Accounts receivable subsidiary ledger

9) Under the cash basis of accounting,

C. cash must be received before revenue is recognized

10) Under the accrual basis of accounting,

C. events that change a company's financial statements are recognized in the period they occur rather than in the period in which the cash is paid or received

11) The Vintage Laundry Company purchased $6,500 worth of laundry supplies on June 2 and recorded the purchase as an asset. On June 30, an inventory of the laundry supplies indicated only $2,000 on hand. The adjusting entry that should be made by the company on June 30 is

D. debit Laundry Supplies Expense, $4,500; credit Laundry Supplies, $4,500

12) Greese Company purchased office supplies costing $4,000 and debited Office Supplies for the full amount. At the end of the accounting period, a physical count of office supplies revealed $1,100 still on hand. The appropriate adjusting journal entry to be made at the end of the period would be

C. debit Office Supplies Expense, $2,900; credit Office Supplies, $2,900

13) Based on the account balance below, what is the total of the debit and credit columns of the adjusted trial balance?

Service revenue $3,300 Equipment $6,400

Cash 1,525 Prepaid insurance 1,225

Unearned revenue 5,320 Depreciation expense 640

Salary 1,050 Accum. depreciation 1,280

Common stock 390 Retained earnings 550

B. $9,150

$10,840

14) An adjusted trial balance

B. proves the equality of the total debit balances and total credit balances of ledger accounts after all adjustments have been made

15) Given the following adjusted trial balance, net income for the year is:

Debit Credit

Cash $781

Accounts receivable 1,049

Inventory 1,562

Prepaid rent 43

Property, plant & equipment 150

Accumulated depreciation 26

Accounts payable 41

Unearned revenue 61

Common stock 103

Retained earnings 3,305

Service revenue 134

Interest revenue 28

Salary expense 80

Travel expense 33

Total $3,698 $3,698

D. $49

16) Given the following adjusted trial balance, what will be the totals for the debit and credit columns of the post-closing trial balance?

Debit Credit

Cash $1,562

Accounts receivable 2,098

Inventory 3,124