Copy and Edit

Accounting - Unit 1: Grade 11 Review

Description

Grade 12 Accounting Midterm Prep
Claudia Voin
Quiz by Claudia Voin, updated more than 1 year ago
Claudia Voin
Created by Claudia Voin over 9 years ago
1968
5
0

Resource summary

Question 1

Question
Debt refers to
Answer
  • an asset
  • the right side of an account
  • a liability
  • the left side of an account

Question 2

Question
Which of the following items is not an asset?
Answer
  • A/R
  • cash
  • A/P
  • supplies

Question 3

Question
The common characteristic possessed by all assets is?
Answer
  • long life
  • great monetary value
  • tangible nature
  • future economic benefit

Question 4

Question
Liabilities...
Answer
  • are future economic benefits
  • are existing debts and obligations
  • possess service potential
  • are things of value used by the business in its operation

Question 5

Question
Owner's Equity , in a proprietorship, can be described as
Answer
  • creditorship claims on total assets
  • ownership claim on total assets
  • benefactor's claim on total assets
  • debtor claim on total assets

Question 6

Question
Notes Payable are classified as
Answer
  • an asset
  • owner's equity
  • revenue
  • a liability

Question 7

Question
The basic accounting EQN is written as
Answer
  • Assets + Liabilities = Owner's Equity
  • Assets = Liabilities + Owner's Equity
  • Assets = Revenues - Expenses
  • Assets + Owner's Equity = Liabilities

Question 8

Question
A way to write the expanded accounting EQN is
Answer
  • Assets + Expenses + Withdrawals = Owner's Capital + Revenue
  • Assets = Liabilities + Owner's Capital + Revenue - Expenses - Withdrawals
  • Assets + Owner's Capital = Liabilities + Revenue - Expenses - Withdrawals
  • Assets + Revenue = Liabilities + Owner's Capital + Expenses - Withdrawals

Question 9

Question
What is a ledger?
Answer
  • a list of all assets
  • accounts grouped together in book or computerized form
  • a list of all liabilities
  • the debit side of an account

Question 10

Question
If total liabilities = $75 000 and OE = $150 000, total assets =
Answer
  • 75 000
  • 150 000
  • 250 000
  • 225 000

Question 11

Question
An activity that changes the value of a firm's assets, liabilities, or owner's equity is referred to as
Answer
  • a service business
  • an income statement
  • a net loss
  • a transaction

Question 12

Question
If the assets of a business increase by $16 000 during an accounting period and OE increases by $4 000, what is the amount and direction of the change in liabilities for the period?
Answer
  • + $12 000
  • - $12 000
  • + $20 000
  • = $16 000

Question 13

Question
If an individual asset, in a proprietorship, is increased then
Answer
  • there must be an equal decrease in a specific liability
  • there must be an equal decrease in OE
  • there must be an equal decrease in another asset
  • none of these is possible

Question 14

Question
Net income occurs when
Answer
  • A > L
  • R = E
  • R > E
  • R < E

Question 15

Question
If the OE account increases from the beginning of the year to the end of the year, then
Answer
  • NI is less than other drawings
  • a NL is less than owner drawings
  • additional owner investments are less than NL
  • NI is greater than owner drawings

Question 16

Question
Before the following transaction, Sam's Landscaping has $25 000 in assets, $15 000 in liabilities, and $10 000 in OE. Sam borrows $10 000 from the bank. What effect will this have on the accounting EQN?
Answer
  • assets will increase by $10 000 and liabilities will decrease by $10 000
  • liabilities will decrease by $10 000 and OE will increase by $10 000
  • assets will increase by $10 000 and liabilities will increase by $10 000
  • assets will decrease by $10 000 and OE will decrease by $10 000

Question 17

Question
An accountant has debited an asset account for $1 000 and credited a liability account for $500. What can be done to complete the recording of the transaction?
Answer
  • nothing further must be done
  • debit an OE account for $500
  • debit another asset account for $500
  • credit a different asset account for $500

Question 18

Question
Eric paid $500 for repairs on the truck he uses in his landscaping business. The effect on the accounting EQN would include a(n)
Answer
  • increase to OE
  • decrease to liabilities
  • decrease to assets
  • increase to revenue

Question 19

Question
James received a cheque for $1 000 from one of his clients for work he had performed in a prior accounting period. How should James record the receipt for this cheque?
Answer
  • increase cash $1 000, decrease A/P $1 000
  • increase cash $1 000, decrease service revenue $1 000
  • increase cash $1 000, increase capital $1 000
  • increase cash $1 000, decrease A/R $1 000

Question 20

Question
The purchase of supplies on credit
Answer
  • decreases liabilities
  • has no effect on the accounting EQN
  • decreases assets
  • increases liabilities

Question 21

Question
Which of the following activities increases OE?
Answer
  • performance of services for client on credit
  • withdrawal of cash for personal
  • payment of office rent
  • purchase of supplies on credit

Question 22

Question
The three basic financial statements are
Answer
  • income statement, bank statement, balance sheet
  • income statement, statement of owner's equity, balance sheet
  • bank statement, invoice, and revenue statement
  • statement of owner's equity, balance sheet, worksheet

Question 23

Question
A listing of a firm's assets, liabilities, and OE at a specific point in time is known as
Answer
  • a statement of OE
  • a balance sheet
  • the accounting EQN
  • an income statement

Question 24

Question
Which of the following is not true of the terms debit and credit?
Answer
  • they can be abbreviated as DR and CR
  • they can be interpreted as increase or decrease
  • they can be used to describe the balance of an account
  • they can be interpreted to mean left or right

Question 25

Question
Which statement is true regarding the rules for debits and credits?
Answer
  • debits are always positive, credits always negative
  • debits on the right, credits on the left
  • a debit will decrease an asset
  • a credit will be recorded on the right side of an account

Question 26

Question
What is the change to the balance in OE when revenues were $1 500, expenses were $800, and withdrawals were $400?
Answer
  • an increase of $1 500
  • a decrease of $400
  • an increase of 300
  • an increase of $700

Question 27

Question
Tom invoices his customer $1 200 for services. The correct entry to record this transaction is
Answer
  • debit A/R $1 200 and credit deferred payments $1 200
  • debit cash $1 200 and credit service revenue $1 200
  • debit A/R $1 200 and service revenue $1 200
  • none of the above are correct

Question 28

Question
Which of the following is true?
Answer
  • when we receive cash, we credit the cash account
  • when we receive cash, we debit the revenue account
  • when we pay a bill, we debit the cash account
  • when we pay a bill, we credit the cash account

Question 29

Question
A TB is a list of all
Answer
  • business liabilities
  • ledger accounts and their balances
  • revenues and expenses
  • business assets

Question 30

Question
The normal balance of liabilities and OE is, respectively
Answer
  • credit and credit
  • debit and debit
  • debit and credit
  • credit and debit

Question 31

Question
An account will be said to have a credit balance if
Answer
  • the normal balance is a credit
  • there are more credit transactions than debit
  • the sum of the credit transactions is greater than that of the debit
  • the account is an OE account

Question 32

Question
A/R had a normal balance of $8 500 at the beginning of the month. During the month, the account had debit postings of $8 500 and credit postings of $10 000. The balance of A/R at the end of the month is a
Answer
  • $8 500 credit balance
  • $10 000 credit balance
  • $7 000 debit balance
  • $10 000 debit balance

Question 33

Question
The following accounts have normal balances as shown below. What is the TB total for debits and credits? A/P - 1 500, A/R - 2 000, Capital - 4 000, Cash - 1 000, Equip - 5 000, Notes Payable - 3 500, Withdrawals - 1 000
Answer
  • 8 000 debit and 8 000 credit
  • 10 000 debit and 10 000 credit
  • 9 000 debit and 9 000 credit
  • 8 000 debit and 10 000 credit

Question 34

Question
What is the purpose of a TB?
Answer
  • to verify that all transactions are correct
  • to show net income
  • to show that all transactions have been recorded
  • to verify equality of debits and credits

Question 35

Question
The book of original entry is the
Answer
  • four-column account
  • journal
  • ledger
  • TB

Question 36

Question
The owner of a business purchases equipment by making a down payment with the balance owed on account. This transaction is recorded by debiting the
Answer
  • equip account and crediting the cash and A/P accounts
  • equip account and the A/P account and crediting the cash account
  • cash account and the equip account and crediting the A/P account
  • cash account and the A/P account and crediting the equip account

Question 37

Question
When a business transaction requires entries to more than one debit or more than one credit, it is called a
Answer
  • complex entry
  • compound entry
  • standard entry
  • double entry

Question 38

Question
Thomas' Dry Wall completed work on a house. Thomas received $3 500 when he finished the job and will receive the balance of $1 500 in 30 days. The correct journal entry to record this event is
Answer
  • debit cash $3 500 and credit service revenue $3 500
  • debit A/R $5 000 and credit cash $3 500 and service revenue $1 500
  • debit cash $3 500 and credit A/R $1 500 and service revenue $5 000
  • debit cash $3 500 and A/R $1 500 and credit service revenue $5 000

Question 39

Question
The journal entry to record the payment of Ralph's Plumbing and Repair electric bill of $175 for the month is
Answer
  • debit cash $175 and credit A/P $175
  • debit cash $175 and credit utilities expense $175
  • debit utilities expense $175 and credit cash $175
  • none of the above are correct

Question 40

Question
A term used for transferring information from the journal to the ledger is
Answer
  • transference
  • transposing
  • posting
  • referencing

Question 41

Question
When the new balance of an account is calculated
Answer
  • a debit posting is added if the account has a credit balance
  • a credit posting is subtracted if the account has a credit balance
  • a debit posting is subtracted if the account has a debit balance
  • a debit posting is subtracted if the account has a credit balance

Question 42

Question
What is a transposition error?
Answer
  • a math error involving an incorrectly placed decimal point
  • a recording error involving an incorrectly place decimal point
  • a posting error involving an incorrectly placed decimal point
  • a posting error involving a reversal of digits

Question 43

Question
An awareness of the normal balance of accounts would help you spot which of the following as an error in recording?
Answer
  • a debit balance in the drawings account
  • a credit balance in an expense account
  • a credit balance in a liability account
  • a credit balance in a revenue account

Question 44

Question
Which of the following errors will cause a TB to not balance?
Answer
  • journalizing a transaction twice
  • failure to record a transaction
  • failure to post part of an entry to the ledger
  • posting a transaction twice

Question 45

Question
Which of the following entries would cause a TB not to balance
Answer
  • a debit to cash for $360 and credit to equip for $360
  • a debit to cash for $400 and credit to A/P for $400
  • a debit to A/P for $560 and credit to A/P for $560
  • a debit to salaries expense for $780 and credit to salaries payable for $870

Question 46

Question
A TB would only help in detecting which of the following errors
Answer
  • a transaction not journalized
  • an entry posted twice
  • an entry using incorrect accounts
  • a transposition error when transferring the debit side of a journal entry to the ledger

Question 47

Question
Linda prepared the Tb and found that total debits were $19 000 and total credits were $21 500. Which of the following errors would cause the TB to be out of balance?
Answer
  • the payment of rent was recorded as a debit to cash for $2 500 and credit to rent expense for $2 500
  • the purchase of equip on account was recorded as a debit to equip for $2 500 and a credit to cash for $2 500
  • the receipt of a customer's payment was recorded as a credit to A/R for $1 250 ad a credit to cash for $1 250
  • the purchase of supplies was recorded as a debit to supplies expense for $1 250 and a credit to supplies for $1 250

Question 48

Question
If a purchase of supplies on account for $100 is journalized correctly but posted as a debit to the supplies account for $1 000 and a credit to A/P for $100, what effects will the error have?
Answer
  • the TB will be out of balance, but A/P account will be correct
  • the TB will be in balance
  • the TB will be in balance, and the supplies account will be correct
  • the TB will be out of balance, and both supplies account and the A/P account will be incorrect

Question 49

Question
The payment of a $450 invoice for utilities was recorded as a debit to rent expense for $540 and a credit to cash for $540. The entry to correct this mistake is
Answer
  • debit rent expense $90, credit cash $90
  • debit utilities expense $540, credit rent expense $540
  • debit cash $540, credit utilities expense $450 and rent expense $90
  • debit cash $90 and utilities expense $450, and credit rent expense $540

Question 50

Question
Trent received a $350 payment from one of his customers and incorrectly recorded this amount as a debit for $530 to cash and a credit to A/P for $530. The entry that will correct the error is
Answer
  • debit A/P $180, credit cash $180
  • debit A/R $530, credit sales $530
  • debit A/P 530, credit A/R $350 and cash $180
  • debit cash $350 and credit A/R $350

Question 51

Question
A business organized as a corporation
Answer
  • is not a separate legal entity in most provinces
  • requires that shareholders are personally liable for debts of the business
  • is owned by its shareholders
  • terminates when one of the owners dies

Question 52

Question
A partnership form of business organization
Answer
  • is a separate legal entity
  • is a common form of organization for professional businesses
  • enjoys an unlimited life
  • has limited liability

Question 53

Question
Which of the following is not an advantage of the corporate business form?
Answer
  • limited liability of shareholders
  • transferability of ownership
  • unlimited personal liability for shareholders
  • unlimited life

Question 54

Question
The accounting EQN for a corporation may be expressed as
Answer
  • Assets = Liabilities + Shareholders' Equity
  • Assets = Liabilities + Partners' Equity
  • Assets = Liabilities + Owner's Equity
  • all of the above

Question 55

Question
Accumulated earnings in a corporation are reported in
Answer
  • capital
  • share capital
  • retained earnings
  • dividends
Show full summary Hide full summary

Want to create your own Quizzes for free with GoConqr? Learn more.

Similar

CPA Exam Topics and breakdown
joemontin
CPA Exam Flashcards
joemontin
CPA Exam Sample Questions Pt. 1
nedtuohy
Accounting Definitions
Tess Morris
Accounting I - Objective 2 Keller
Kathleen Keller
Exam Bank 2
Valek
Specific Order Costing
Natalie Gray
COSTING SYSTMES
Francia o
Glossary of Accounting Terms
racheloucks
Unit 4 The Accounting Cycle
a.j.hemphill
Chapter One: Introduction to Accounting
charlotte.power9
Browse Library