31) A calendar year is:

A) any month period that a business chooses for its accounting year.

B) the month period beginning with January.

C) the period for when a interim financial statement would be completed.

D) All of these answers are correct.

32) Interim statements are prepared to:

A) notify management of the company’s current financial position.

B) notify investors of the company’s current financial position.

C) allow management to make changes to the business before processing year-end financial statements.

D) All of the above are correct.

 

33) A transaction completed by Norton Company caused a $4,000 increase in both the total assets and the total liabilities. This transaction could have been:

A) purchase of office equipment for $12,000, paying $8,000 cash, with the rest on account.

B) investment by the owner of an additional $4,000.

C) purchase of office equipment, paying $4,000 cash, and $8,000 on account.

D) None of these answers are correct.

 

34) Conner Sales’ total assets and total liabilities increased $400. The transaction could have been:

A) purchase of supplies for cash, $400.

B) purchase of supplies for $600 with a down payment of $200 and the remainder on account.

C) paid the rent for the month, $700.

D) None of these answers are correct.

 

35) Which of the following accounts would be debited in a proper journal entry?

A) Accounts Payable when it is increased

B) Accounts Receivable when it is increased

C) Cash when it is decreased

D) Capital when it is increased

36) The trial balance lists the accounts:

A) alphabetically.

B) in the same order as in the ledger.

C) all debits first and then credits.

D) all credits first and then debits.

 

37) As Withdrawals increase:

A) owner’s equity decreases.

B) owner’s equity increases.

C) Cash increases.

D) expense increases.

 

38) If Accounts Payable has been debited, it is most likely that:

A) the company made a payment to a creditor.

B) a customer made a payment.

C) the company made a purchase on account.

D) None of these are possible.

 

39) If Accounts Payable has been credited, it is most likely that:

A) a collection from a customer was made.

B) a service was provided to a cash customer.

C) the company made a purchase on account.

D) None of these are possible.

40) The journal entry to record an investment by the owner would most commonly include:

A) a debit to Cash and a credit to Fees Earned.

B) a debit to Capital and a credit to Cash.

C) a debit to Fees Earned and a credit to Capital.

D) a debit to Cash and a credit to Capital.

 

 

 



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