ACC 101 Midterm Practice Exam # 1

Question 1

Question

Stockholders’ equity is affected by the ____________________

Answer

a. Purchase of an asset for cash
b. Payment of a liability
c. Collection of accounts receivable
d. Declaration and payment of a dividend

Question 2

Question

2. Which of the following accounts has a normal debit balance?

Answer

a. Utilities Expense
b. Retained Earnings
c. Design Revenue
d. Accounts Payable

Question 3

Question

3. Platt Realty Corporation had the following balance sheet accounts and balances: Accounts Payable $6,000 Common Stock ? Accounts Receivable ? Equipment $7,000 Building 1,000 Land 7,000 Cash 3,000 Retained Earnings 2,000 If the balance in the Accounts Receivable was $17,000, what would be the total liabilities and stockholders’ equity?

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Screen_Shot_2014-01-27_at_9.18.38_PM (image/png)

Answer

a. $17,000
b. $27,000
c. $32,000
d. $35,000

Question 4

Question

4. Which of the following accounts is decreased with a credit

Answer

a. Salaries Payable
b. Unearned Management Fees
c. Accounts Receivable
d. Retained Earnings

Question 5

Question

5. Dexter Company accepts an advance fee of $500 for services to be performed next year. The entry to record this transaction would include a:

Answer

a. Debit to Accounts Receivable
b. Credit to Unearned Service Fees
c. Credit to Cash
d. Credit to Service Fees Earned

Question 6

Question

The primary purpose of the trial balance is to test the:

Answer

a. Equality of debit and credit entries in the journal
b. Recording of transactions
c. Equality of debit and credit balances in the ledger
d. Analysis of transactions.

Question 7

Question

7. Which of the following accounts probably would need to be adjusted at year end?

Answer

a. Supplies
b. Land
c. Dividends
d. Notes Payable

Question 8

Question

8. Which of the following is most likely to appear on the balance sheet as a current asset?

Answer

Buildings
Merchandise Inventory
Accumulated Depreciation
Common Stock

Question 9

Question

9. If Accounts Receivable has debit posting of $29,000, credit postings of $22,000, and a normal ending balance of $24,000, which of the following was its beginning balance?

Answer

$17,000 debit
$31,000 credit
$31,000 debit
$17,000 credit

Question 10

Question

10. A $4,000 machine is purchased by paying $1,000 cash and issuing a promissory note for the remainder. The entry should include a:

Answer

Credit to Notes Payable
Debit to Cash
Credit to Notes Receivable
d. Credit to Machinery

Question 11

Question

11. After all closing entries have been posted, which of the following accounts is most likely to have a non zero balance?

Answer

Income Summary
Service Revenue
Wages Payable
Interest Expense

Question 12

Question

12. Which of the following transactions is most likely not to result in an adjusting entry at the end of the period?

Answer

Purchase of a two year insurance policy
Payment of this month’s rent
Purchase of office equipment
Performance of a service for which payment was received in advance.

Question 13

Question

13. When a company receives an electric bill but does not pay it right away it should

Answer

Debit Utilities Expense and credit Accounts Receivable
Make no entry until the bill is paid
Debit Utilities Expense and credit Accounts Payable
Debit Accounts Payable and credit Utilities Expense

Question 14

Question

14. The entry for the expiration of prepaid advertising, originally recorded as an asset, consists of a debit to

Answer

Advertising Expense and a credit to Prepaid Advertising
Prepaid Advertising and a credit to Cash
Advertising expense and a credit to Cash
Prepaid Advertising and a credit to Advertising Expense

Question 15

Question

15. Which of the following could not possibly be a closing entry?

Answer

Debit Income Summary and credit Dividends
Debit Income Summary and credit Retained Earnings
Debit Retained Earnings and credit Dividends
Debit Retained Earnings and credit Income Summary

Question 16

Question

16. Current assets divided by current liabilities is known as the

Answer

Profit margin
Current ratio
Working capital
Asset turnover

Question 17

Question

17. Gross margin equals the difference between net sales and:

Answer

Net income
Cost of goods sold plus operating expenses
Operating expenses
Cost of goods sold

Question 18

Question

Cailor Corporation provides food services to universities. Its account balances (all normal) are provided below in alphabetical order for the month ended July 31, 2007. The Cailor Corporation, Retained Earnings account balance represents the balance as of June 30, 2007; all other account balances are as of July 31, 2007. ------------------------------------------------------------------

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Answer

A) Income Statement B)Statement of Retained Earnings c) Balance Sheet (unclassified)
Do Above Work

Question 19

Question

Depreciation Expense appears on the Balance Sheet

Answer

True
False

Question 20

Question

Buildings appear on the balance sheet as a current asset?

Answer

True
False

Question 21

Question

Merchandise Inventory appears on the balance sheet as a current asset.

Answer

True
False

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ACC 101 Midterm Practice Exam # 1

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Resource summary

Question 1

Question 2

Question 3

Question 4

Question 5

Question 6

Question 7

Question 8

Question 9

Question 10

Question 11

Question 12

Question 13

Question 14

Question 15

Question 16

Question 17

Question 18

Question 19

Question 20

Question 21

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