A01 Introduction To Accounting

A01 Introduction to Accounting
A01J Assignment 4
Directions: Be sure to save an electronic copy of your answer before submitting it to Ashworth
College for grading. Unless otherwise stated, answer in complete sentences, and be sure to use
correct English, spelling and grammar. Sources must be cited in APA format. Your response should
be four (4) double-spaced pages; refer to the "Assignment Format" page located on the Course Home
page for specific format requirements.
Part A (20 points)
Prepare in proper form journal entries for the following transactions. Omit explanations.
October
2 Owner made a cash investment into the company $5,000
8 Bought supplies on account $100.
10 Paid salaries, $700
15 Paid for supplies purchased on October 8
21 Received company telephone bill, to be paid later, $30
Part B (5 points each for a possible total of 50 points)
Record the following selected transactions for January in a two-column journal, identifying each
entry by letter:
(a) Earned $7,000 fees; customer will pay later.
(b) Purchased equipment for $45,000, paying $20,000 in cash and the remainder on credit
(c) Paid $3,000 for rent for January.
(d) Purchased $2,500 of supplies on account.
(e) A. Allen $1,000 investment in the company.
(f) Received $7,000 in cash for fees earned previously.
(g) Paid $1,200 to creditors on account.

(h) Paid wages of $6,250.
(i) Received $7,150 from customers on account.
(j) A. Allen withdrawal of $1,750.
Part C
(1) (10 points) From the following items in the income statement columns of the worksheet
of Friend's Tutoring at December 31, prepare the closing entries without explanation,
assuming that a $1,000 withdrawal was made during the period.
Income Statement
Account Debit Credit
Tutoring Fees 3,450
Wages Expense 700
Rent Expense 600
Supplies Expense 450
Insurance Expense 250 _____
2,000 3,450
Net Income 1,450 _____
$3,450 $3,450
(2) (5 points each for a possible total of 20 points) A summary of selected ledger accounts
appear below for S. Ball for the current calendar year.
Answer the following questions.
a. What was the total amount of withdrawals for the year?
b. What was the net income?
c. What was the total revenue?
d. What were the total expenses?
A01J Assignment 4
ASSIGNMENT 04

Part A (30 points)
Record the following transactions in the basic accounting equation:
a. Brian invests $10,000 cash to begin an accounting service.
b. The company buys office furniture for cash, $600.
c. The company buys additional office furniture on account, $300.
d. The company makes a payment on the office furniture, $200.
Brian's Accounting Service

ASSETS = LIABILITIES + OWNER'S
EQUITY
Cash + Office Furniture = Accounts Payable + Brian's Capital
a.
b.
c.
d.
Part B (40 points)
The following is a list of accounts and their balances for Benson Company for the month ended June
30, 20xx. Prepare a trial balance in good form.
Cash $1,370 Benson, Withdrawals $ 500
Accounts Payable 770 Accounts Receivable 1,600
Office Equipment 900 Service Fees 2,730
Benson, Capital 1,500 Salaries Expense 630
Part C (30 points)
The following transactions occurred during June for Campus Cycle Shop. Record the transactions
below in the T accounts. Place the letter of the transaction next to the entry. Foot and calculate the
ending balances of the T accounts where appropriate.
a. Tyler invested $6,500 in the bike service from his personal savings account.
b. Bought office equipment for cash, $900.
c. Performed bike service for a customer on account, $1,000.
d. Company cell phone bill received, but not paid, $80.
e. Collected $500 from customer in transaction c.
f. Tyler withdrew $300 for personal use.

A01J Assignment-08.
ASSIGNMENT 08

Part A (20 points)
Prepare in proper form journal entries for the following transactions. Omit explanations.
October
2 Owner made a cash investment into the company $5,000
8 Bought supplies on account $100.
10 Paid salaries, $700
15 Paid for supplies purchased on October 8
21 Received company telephone bill, to be paid later, $30
Part B (5 points each for a possible total of 50 points)
Record the following selected transactions for January in a two-column journal, identifying each
entry by letter:
(a) Earned $7,000 fees; customer will pay later.
(b) Purchased equipment for $45,000, paying $20,000 in cash and the remainder on credit
(c) Paid $3,000 for rent for January.
(d) Purchased $2,500 of supplies on account.
(e) A. Allen $1,000 investment in the company.

(f) Received $7,000 in cash for fees earned previously.
(g) Paid $1,200 to creditors on account.
(h) Paid wages of $6,250.
(i) Received $7,150 from customers on account.
(j) A. Allen withdrawal of $1,750.
Part C
(1) (10 points) From the following items in the income statement columns of the worksheet of
Friend's Tutoring at December 31, prepare the closing entries without explanation, assuming that a
$1,000 withdrawal was made during the period.
Income Statement
Account Debit Credit
Tutoring Fees 3,450
Wages Expense 700
Rent Expense 600
Supplies Expense 450
Insurance Expense 250 _____
2,000 3,450
Net Income 1,450 _____
$3,450 $3,450
(2) (5 points each for a possible total of 20 points) A summary of selected ledger accounts
appear below for S. Ball for the current calendar year.
Answer the following questions.
a. What was the total amount of withdrawals for the year?
b. What was the net income?
c. What was the total revenue?
d. What were the total expenses?
A01 Week-1 Discussion

Define, compare and contrast sole proprietorships, partnerships, and corporations?
(260 words with 1 reference)
A01 Online Exam 1_02 Score 100 Percent

Question 1
Accounting provides information to __________.
A. managers
B. government
C. investors
D. All of these answers are correct.
Question 2
Which is an advantage of a sole proprietorship form of business?
A. There is limited personal risk.
B. The business can continue indefinitely.
C. The owner makes all the decisions.
Question 3
A corporation __________.
A. can continue indefinitely
B. is owned by stockholders
C. has limited risk to stockholders
Question 4
The Sarbanes-Oxley Act was passed to __________.
A. prevent fraud at public companies
B. replace all of the old accounting procedures with new ones
C. improve the accuracy of the company's financial reporting
D. Both A and C are correct.
Question 5
The purchase of supplies for cash would affect which account category?
A. assets
B. liabilities
C. capital
D. expense
Question 6
The type of business organization that can continue indefinitely is known as a __________.
A. sole proprietorship
B. partnership
C. corporation
D. None of the above answers are correct.
Question 7
Bonnie's Baskets purchases $4,000 worth of office equipment on account. This causes
A. Cash and Capital to decrease.
B. Office Equipment and Accounts Payable to increase.
C. Office Equipment to decrease and Accounts Payable to increase.
D. Accounts Payable to increase and Capital to decrease.
Question 8
Logan's Motor Sports buys $30,000 of equipment on credit. Which of the following is a true
statement?
A. Total assets increase.
B. Total assets are unchanged.
C. Total liabilities decrease.
D. Total liabilities are unchanged.
Question 9
Katie's Vegetarian Restaurant, with total assets of $90,000, borrows $15,000 from the bank. Which of
the following is a true statement upon borrowing the money?
A. Total assets are now $105,000.
B. Total assets are now $80,000.
C. Total assets are now $15,000.
D. Total assets are now $75,000.
Question 10
The claims of creditors against the assets are __________.
A. expenses
B. revenues
C. liabilities
D. owner's equity
Question 11
Bob purchased a new computer for the company on account. The transaction will __________.
A. increase Computer; increase Capital
B. decrease Cash; increase Accounts Payable
C. decrease Cash; increase Computer
D. increase Computer; increase Accounts Payable
Question 12
If total assets are $30,000 and total liabilities are $18,000, Capital must equal __________.
A. $12,000
B. $28,000
C. $8,000
D. $20,000
Question 13
A partnership is a business that is __________.
A. easy to form
B. ends with the death of a partner
C. owned by more than one person
Question 14
The balance sheet contains __________.
A. liabilities, expenses and capital
B. assets, liabilities and revenues
C. expenses, assets and cash
D. assets, liabilities and owner's equity
Question 15
A legal firm would be considered a __________.
A. merchandise company
B. manufacturer
C. service company
Question 16
Which of the following is a characteristic of a sole proprietorship?
A. business owned by more than one person
B. easy to form
C. each stockholder acts as an owner of the company
D. can continue indefinitely
Question 17
If total liabilities are $1,000 and total assets are $8,000, owner's equity must be __________.
A. $7,000
B. $3,000
C. $10,000
D. $13,000
Question 18
A purchase of a vehicle for cash would have what effect on the accounting equation?
A. Total asset amount remains the same.
B. Total liabilities are overstated.
C. Total owner's equity is overstated.
D. Both A and B are correct.
Question 19
Which of the following is not a type of business organization?
A. corporation
B. partnership
C. sole proprietorship
D. operation
Question 20
Which of the following will be recorded in the owner's equity column as an increase?
A. an exchange of assets
B. the purchase of an asset on credit
C. an investment by the owner
D. a withdrawal by the owner
A01 Lesson 2 Exam SCORE 100 PERCENT

Question 1 (5 points)
When services are rendered but payment is not made,

which account would be increased?
Question 1 options:
accounts receivable
accounts payable
cash
withdrawal
Go Blue Retail Store collected $12,000 of its accounts

receivable. The expanded accounting equation changes
include __________.
Question 2 options:
cash and capital increase, $12,000
cash and revenue increase, $12,000
cash increases and accounts receivable decreases $12,000
accounts receivable decreases and capital increases $12,000
A company has the following balances in its asset
accounts: Cash, $750; Accounts Receivable, $125;
Equipment, $2,000; Supplies, $875. The amount of the
company's total assets is __________.
Question 3 options:
$875
$1,750
$2,875
$3,750
An accounting report that shows the changes in capital

during the accounting period is __________.
Question 4 options:
a balance sheet
an income statement
a statement of owner's equity
All of these answers are correct.
Which of the following transactions has no effect on

owner's equity?
Question 5 options:
paying salaries expense
equipment purchase
billing for services rendered
a withdrawal
The increase or decrease in the owner's equity is reported

on the __________.
Question 6 options:
income statement
statement of owner's equity
balance sheet
All of these answers are correct.
The payment of accounts payable would __________.
Question 7 options:
increase both assets and liabilities
increase assets and decrease liabilities
decrease both assets and liabilities

decrease assets and increase liabilities
Ryan withdrew cash from the business to pay his personal

cell phone bill. The expanded accounting equation
changes include __________.
Question 8 options:
increase in both cash and withdrawal
decrease in both cash and withdrawal
decrease in cash and increase in withdrawal
increase in cash and decrease in withdrawal
The financial statement that shows revenue and expenses

for a period of time is the __________.
Question 9 options:
balance sheet
income statement
statement of cash flows
A company has $4,500 in its Revenue account at the end
of a period. The Expenses are as follows: Rent, $750;
Utilities, $150; Salaries, $2,400; Insurance, $225. The net
income (loss. for the period is __________.
Question 10 options:
$3,600
($2,100.
$975
($1,425.
Carrie billed her legal clients $6,000 for legal work

completed during the month. This transaction will
__________.
cause a $6,000 increase in revenues and liabilities
cause a $6,000 increase in revenues and a decrease in liabilities
cause a $6,000 increase in assets and revenues
not be recorded until the cash is collected
Which of the following is not one of the four basic

financial statements?
Statement of Cash Flows
Income Statement
Statement of Company Position
Balance Sheet
The net income or net loss is calculated on the __________.
balance sheet
income statement
None of the above answers are correct.
The statement of owner's equity contains the __________.
owner's capital for the beginning of the period
liabilities of the company
total amount owed by credit customers

balance in the cash account
The financial statement that shows business results in

terms of revenue and expenses is __________.
an income statement
a balance sheet
a statement of owner's equity
the statement of cash flows
Which of the following statements is prepared first?
Statement of Owner's Equity
Balance Sheet
Income Statement
None of the above
An expense should be recorded when __________.
the bill is paid
the expense is incurred
a bill is received in the mail
None of the above answers are correct.
If 'Ol Fashioned Toys' revenues are less than its expenses

during the accounting period, then __________.
owner's withdrawals decrease net income
net income causes liabilities to decrease
the business will incur a loss
owner's withdrawals increase owner's equity
If a company's revenues are higher than its expenses, it

will cause __________.
an increase in owner's equity
a decrease in owner's equity
an increase in assets
no effect on owner's equity
BPK Industries has a net income for the period of $2,500.

The balance in the Owner's Capital account for the
beginning of the period is $5,000 and the owner has
withdrawn $1,650 for personal expenses. The balance in
the Owner's Capital account at the end of the period will
be __________.
$5,850
$7,500
$850
$9,150
A01 Week-3 Discussion

Explain the concept of double entry bookkeeping.
(150 words)

Question 1
When recording transactions in two or more accounts and the totals of the debits and credits are
equal, it is called __________.
A. debiting
B. crediting
C. posting
D. double-entry bookkeeping
Question 2
An account is said to have a debit balance if __________.
A. the footing of the debits exceeds the footing of the credits
B. there are more entries on the debit side than on the credit side
C. its normal balance is debit without regard to the amounts or number of entries on the debit side
D. the last entry of the accounting period was posted on the debit side
Question 3
Jim Walton performed services on credit for $2,450. A debit for this transaction should be recorded to
__________.
A. revenue
B. accounts receivable
C. accounts payable
D. cash
Question 4
The owner invested personal equipment in the business. To record this transaction __________.
A. debit Equipment and credit Accounts Payable
B. debit Accounts Payable and credit Equipment
C. debit Equipment and credit Capital
D. credit Equipment and debit Capital
Question 5
A liability would be credited and an expense debited if __________.
A. the business paid a creditor
B. the business incurred an expense and did not pay the expense immediately
C. the business bought supplies on account
D. the business bought supplies for cash
Question 6
When an owner records a credit for $650 for revenue earned but not yet received, the amount of the
debit should be __________.
A. $325
B. $0
C. $975
D. $650
Question 7
A category that is not in the chart of accounts is __________.
A. assets
B. liabilities
C. cash flows
D. revenue
Question 8
What would be the effect on accounts if the owner withdrew cash?
A. An asset would be debited and an expense credited.
B. Withdrawals would be debited and an asset credited.
C. An asset would be debited and a revenue credited.
D. An asset would be debited and Capital credited.
Question 9
The Accounts Receivable account has total debit postings of $1,900 and credit postings of $1100.
The balance of the account is __________.
A. $800 debit
B. $800 credit
C. $2,600 credit
D. $2,600 debit
Question 10
An asset would be debited and a liability credited if __________.
A. the business bought supplies for cash
B. the business incurred an expense and paid it
C. the business incurred an expense and did not pay for the expense immediately
D. the business bought equipment on account
Question 11
Which of the statements of the rules of debit and credit is true?
A. Decrease accounts receivable with a credit and the normal balance is a credit.
B. Increase accounts payable with a credit and the normal balance is a credit.
C. Increase capital with a debit and the normal balance is a debit.
D. Decrease cash with a debit and the normal balance is a debit.
Question 12
A debit balance is a normal balance for which type of account?
A. accounts payable
B. revenue
C. accounts receivable
D. owner's capital
Question 13
The ledger is __________.
A. a group of accounts that records data from business transactions
B. a tool used to make sure that all accounts have normal balances
C. a chronological record of the day's transactions
D. a tool used to ensure that debits equal credits
Question 14
Accounts Payable had a normal starting balance of $800. There were debit postings of $600 and
credit postings of $300 during the month. The ending balance is __________.
A. $500 credit
B. $1,000 debit
C. $500 debit
D. $1,000 credit
Question 15
A debit increases the balance in all of the following accounts, except __________.
A. cash
B. withdrawals
C. expenses
D. accounts payable
Question 16
Office Supplies had a normal starting balance of $75. There were debit postings of $80 and credit
postings of $60 during the month. The ending balance is __________.
A. $55 debit
B. $55 credit
C. $95 debit
D. $95 credit
Question 17
The right side of any account is the __________.
A. debit side
B. credit side
C. ending balance
D. footings
Question 18
The beginning balance in Cash was $3,500. Additional cash of $2,000 was received. Checks were
written totaling $2,500. The cash balance is __________.
A. $2,000
B. $6,000
C. $4,500
D. $3,000
Question 19
Which of the following types of accounts has a normal credit balance?
A. withdrawals
B. assets
C. expenses
D. revenues
Question 20
The owner of BobCats R Us paid his personal MasterCard bill using a company check. The correct
entry to record the transaction is __________.
A. credit Cash; debit Capital
B. credit Cash; debit Supplies Expense
C. credit Cash; debit Withdrawals
D. credit Cash; debit Accounts Receivable

Question 1
A list of all the accounts from the ledger with their ending balances is called a __________.
A. normal balance
B. trial balance
C. chart of accounts
D. footing
Question 2
Given the following list of accounts with normal balances, what are the trial balance totals of the
debits and credits?
Cash
$1,100
Accounts Receivable
800
Capital
1,900
Withdrawals
500
Service Fees
1,000
Rent Expense
500
A. $2,900 debit, $2,900 credit
B. $3,900 debit, $3,900 credit
C. $2,000 debit, $2,000 credit
D. $1,200 debit, $1,200 credit
Question 3
A debit to an expense account was posted to a revenue account. This error would cause
__________.
A. assets to be overstated
B. liabilities to be overstated
C. revenue to be understated
Question 4
The purpose of the trial balance is __________.
A. to list all of the accounts in the chart of accounts
B. to report all accounts with zero balances
C. to prove that debits equal credits

D. to distribute it with the other financial reports
Question 5
Which of the following is prepared last?
A. Balance Sheet
B. Income Statement
C. Statement of Owner's Equity
D. Trial Balance
Question 6
The chart of accounts __________.
A. is a numbered list of all of the business' accounts
B. allows accounts to be located quickly
C. can be expanded as the business grows
D. All of the above answers are correct.
Question 7
A debit to a liability account was posted to a revenue account. This error would cause __________.
A. revenues to be understated
B. liabilities to be understated
C. capital to be overstated
Question 8
A credit to an asset account was posted to a revenue account. This error would cause __________.
B. revenue to be overstated
C. expenses to be overstated
Question 9
An account that would be increased by a debit is __________.
A. cash
B. fees earned
C. capital
D. accounts payable
Question 10
A withdrawal by the owner was posted to an expense account. This error would cause __________.
C. withdrawals to be overstated
D. expenses to be overstated
Question 11
A debit to an asset account was posted to a liability account. This error would cause __________.
A. assets to be understated
Question 12
Which of the following groups of accounts have a normal credit balance?

A. revenue, liabilities, and capital
B. assets, capital, and withdrawals
C. liabilities, expenses, and assets
D. assets, expenses, and withdrawals
Question 13
Which of the following is not a financial statement?
A. Balance sheet
B. Income statement
C. Statement of owner's equity
D. Trial balance
Question 14
A compound transaction was recorded as follows: debit Equipment, $5,000; debit Cash, $1500; credit
Accounts Payable, $3,500. This error would cause __________.
B. assets to be understated
C. liabilities to be overstated
D. liabilities to be understated
Question 15
A credit to an asset account was posted to a liability account. This error would cause __________.
C. capital to be understated
Question 16
A credit to an asset account was posted to the capital account. This error would cause __________.
Question 17
A credit customer paid $850 toward his accounts receivable. The accountant recorded a credit to the
revenue account. This error would cause __________.
A. revenue to be understated
B. cash to be overstated
C. accounts receivable to be overstated
D. liabilities to be understated
Question 18
Which of the following errors would cause the trial balance to be out of balance?
A. An entry is posted twice.
B. An entry is not posted at all.
C. A debit is entered as $200 and the credit is entered at $2,000.
Question 19
A credit to a liability account was posted to an expense account. This error would cause __________.
C. expenses to be overstated

Question 20
A credit to a liability account was posted to an asset account. This error would cause __________.
A. liabilities to be overstated
C. revenues to be overstated
D. revenues to be understated
Question 21 of 40
2.5 Points
Which of the following entries records the acquisition of office supplies for cash?
A.
Office Supplies 5,000

Cash 5,000
•
B.
Office Supplies 5,000

Accounts Payable 5,000
•
C.
Equipment 5,000
Accounts Payable 5,000
•
D.
Equipment 5,000
Accounts Receivable 5,000
Question 22
The process that begins with recording business transactions and includes the completion of the
financial statements is the __________.
A. calendar year
B. natural business year
C. fiscal year
D. accounting cycle
Question 23
A debit to an expense account was posted to an asset account. This would cause __________.
D. expenses to be understated
Question 24
The posting reference column on the general journal __________.
A. shows which transactions have been posted to the ledger
B. displays to which accounts the transactions have been posted
C. allows us to cross reference to the general ledger
Question 25
A debit to a liability account was posted to an expense account. This would cause __________.
C. owner's equity to be overstated
Question 26
A debit to a liability account was posted to a revenue account. This would cause __________.
D. revenue to be overstated
Question 27
The twelve-month period a business chooses for its accounting period is a(n. __________.
A. calendar year
B. accounting period
C. fiscal year
D. accounting cycle
Question 28
The posting reference column in the journal is used for __________.
A. recording the source documents identification number
B. recording the account number to which the entry was posted
C. recording the time when the entry was posted
D. recording the initials of the person who did the posting
Question 29
A debit to the capital account was posted to an expense account. This would cause __________.
D. expense to be understated
Question 30
A credit to an asset account was posted to an expense account. This would cause __________.
Question 31
The purpose of posting is to __________.
A. list the transactions in chronological order in the journal
B. provide an explanation of the transaction
C. update the account balances in the ledger
D. correct a previous entry
Question 32
A credit to an asset account was posted to a revenue account. This would cause __________.
D. revenue to be overstated
Question 33
The posting reference column in the ledger is __________.
A. used to record the journal and page number the transactions originated
B. used to record the ledger number
C. used to record the date
D. not used
Question 34
Revenue is traditionally recognized in the accounting records when __________.
A. cash is received
B. services are rendered
C. it is incurred
Question 35
Posting is performed by transferring information from the journal to the __________.
A. ledger
B. trial balance
C. balance sheet
D. income statement
Question 36
Which of the following entries would record the payment of a utility bill?
A. debit Utilities Expense; credit Cash
B. debit Cash; credit Utilities Expense
C. debit Utilities Expense; credit Accounts Payable
D. debit Accounts Receivable; credit Utilities Expense
Question 37
A credit to a liability account was posted to an owner's equity account. This would cause __________.
C. owner's equity to be understated
D. net income to be overstated
Question 38
Business transactions are first recorded in the __________.
A. ledger
B. journal
C. trial balance
D. balance sheet
Question 39 of 40
2.5 Points
Renzi's Volleyball Gym purchased equipment for $1,200. It made a down payment of $600 with
the remainder on account. The journal entry to record this transaction is __________.
A.
Cash 600
Accounts Receivable 600
•
B.
Accounts Payable 600

Cash 600
Equipment 1,200
•
C.
Supplies 1,200
Cash 600
•
D.
Equipment 1,200
Cash 600
Question 40
A journal entry affecting three or more accounts is called a __________.
A. multi-level entry
B. multi-step entry
C. compound entry
D. simple entry
A01 Week-5 Threaded Discussion

Compare low debt ratio to high debt ratio, and discuss which is more beneficial to a business.
A01 Week-6 Threaded Discussion

Discuss the differences between cash based and accrual based accounting. List examples when
each system is used.
A01 Online Exam 7_10 SCORE 100 Percent

Question 1 of 402.5 Points
If the balance of supplies at the start of the month was $900 and at the end of the month you had
$450 on hand, the adjustment for Supplies would be __________.
A. $450
B. $550
C. $350
D. $900
The order of the steps to prepare the worksheet are __________.
A. prepare the trial balance, complete adjustments, prepare the adjusted trial balance, extend the
respective totals to the Income Statement and Balance Sheet columns
B. complete the adjustments, prepare the adjusted trial balance, prepare the trial balance, extend
the respective totals to the Income Statement and Balance Sheet columns
C. extend the totals to the Income Statement and Balance Sheet columns, prepare the trial balance,
complete the adjustments, prepare the adjusted trial balance
D. prepare the adjusted trial balance, complete the adjustments, prepare the trial balance, extend
the respective totals to the Income Statement and Balance Sheet columns
An adjustment for Prepaid Rent would indicate __________.
A. the amount originally paid
B. the amount expired
C. the amount on hand
D. the amount of the trial balance
Which of the following would cause a liability to be credited and an expense to be debited?
A. recording the adjustment for the expiration of rent
B. recording the depreciation of equipment
C. recording the accrual of salaries incurred
D. purchasing equipment
The depreciation of equipment will require an adjustment that results in __________.
A. total assets increasing and total expenses increasing
B. total assets increasing and total expenses decreasing
C. total assets and expenses decreasing
D. total assets decreasing and total expenses increasing
Not recording the Prepaid Rent used causes __________.
A. assets to be too high
B. assets to be too low
C. expenses to be too high
D. revenue to be too high
If Prepaid Rent for the period is not adjusted __________.
A. assets will be overstated and expenses will be overstated
B. assets will be overstated and expenses will be understated
C. assets will be understated and expenses will be overstated
D. assets will be understated and expenses will be understated
If the adjustment for Supplies used during the period was not made __________.
A. expenses would be too low
B. assets would be too low
C. expenses would be too high

D. revenue would be too high
As Prepaid Rent is used, the asset becomes a(n. __________.
A. liability
B. expense
C. contra-asset
D. revenue
It's the end of the accounting period and no electric bill has been received (but the expense has been
incurred.; you should record an entry that __________.
A. increases the total assets and increases the total expenses
B. decreases the total assets and increases the total expenses
C. increases the total liabilities and increases the total expenses
D. decreases the total liabilities and increases the total expenses
The adjustment to record supplies used during the period would be __________.
A. debit Supplies; credit Supplies Expense
B. debit Supplies Expense; credit Cash
C. debit Supplies Expense; credit Supplies
D. debit Supplies; credit Cash
Which of the following would cause a contra-asset to be credited and an expense debited?
A. recording an accrued expense
B. recording the consumption of supplies

C. recording the building depreciation
D. All of the above would have that effect.
The entry to record the expiration of part of the prepaid rent will __________.
A. decrease total assets and increase total expenses at the end of the month
B. decrease total assets and decrease total expenses at the end of the month
C. increase total assets and increase total expenses at the end of the month
D. increase total assets and decrease total expenses at the end of the month
The cost of an asset less accumulated depreciation equals __________.
A. residual value
B. book value
C. depreciation expense
The adjusted trial balance columns __________.
A. help to ensure the ledger is still in balance
B. help to identify any errors that may have been made during adjustment
C. show updated account balances to aid in preparation of the financial statements
At the start of this year 18 months' rent was paid. At the year's end, how will this affect the balance
sheet?
A. Assets will be decreased.

B. Liabilities will be increased.
C. Owner's equity will be increased.
D. This has no effect on the period end balance sheet.
Which of the following would cause total assets to decrease and total expense to increase?
A. recording the depreciation of equipment
B. recording the consumption of supplies
C. recording the expiration of prepaid rent
D. All of the above would have that effect.
It is the year end, but not the pay period end. How will this affect the balance sheet?
A. Assets will be increased.
B. Liabilities will be increased.
C. Owner's equity will be increased.
D. This has no effect on the period end balance sheet.
The capital balance amount shown in the balance sheet column of the worksheet represents
__________.
A. the beginning capital plus net income
B. the beginning capital plus net income less withdrawal
C. the beginning capital less withdrawals
D. the beginning capital plus any investments to capital that occurred during the period
Bringing account balances up to date before preparing financial reports is called __________.
A. posting
B. adjusting
C. journalizing
D. analyzing
If current assets are $60,000 and current liabilities are $50,000, the current ratio is __________.
A. 0.8:1
B. 8.3:1
C. 2.1:1
D. 1.2:1
Liquidity ratios measure __________.
A. how effectively a company is using its equity
B. how effectively a company is using its liabilities
C. a company's ability to pay shareholders
D. a company's ability to pay off short-term debts
An account in which the balance is not carried over from one accounting period to the next is called a
__________.
A. permanent account
B. real account
C. temporary account
D. zero account

The current ratio determines the ability of a company to __________.
A. pay off all payables
B. pay off current payables
C. manage its ability to earn profit
D. use its equity
Which of the following assets would not be classified as property, plant, and equipment?
A. delivery truck
B. copyright
C. land
D. furniture
The balance in the Rent Expense account on the worksheet was $120. The journal entry to close the
Rent Expense account is __________.
ANSWER: D
If current assets are $75,000 and current liabilities are $15,000, the current ratio is __________.
A. 5:1
B. 0.2:1
C. 0.5:1
Profitability ratios measure __________.

A. a company's ability to earn profits
B. a company's ability to meet short-term obligations
C. how well a company is using debt versus equity
D. how effectively a company is using its assets
Which of the following sequence of actions describes the proper order in the accounting cycle?
A. journalize, post, close, prepare financial statements, adjust, and analyze transactions
B. prepare financial statements, journalize, post, adjust, analyze transactions, and close
C. analyze transactions, journalize, post, adjust, prepare financial statements, and close
D. post, close, prepare financial statements, adjust, analyze transactions, and journalize
Of the following accounts, which might appear in the adjusted trial balance, but not in the post-closing
trial balance?
A. income summary
B. owner's capital
C. accounts payable
D. depreciation expense
The income statement debit column of the worksheet showed the following expenses:
The journal entry to close the expense accounts is __________.
ANSWER- A
Scott Company had a current ratio of 2.76:1 in Year 1 and 2.57:1 in Year 2. This change in current
ratio indicates __________.
A. the company's debt paying ability has improved

B. the company's debt paying ability has weakened
C. the company's customers are paying their accounts sooner
D. the company is able to sell its inventory faster
Which analysis deals with the percentage of changes in certain items over several years?
A. vertical analysis
B. ratio analysis
C. trend analysis
D. common-size statement
Debt management ratios measure __________.
A. how effectively a company is using its cash
B. how well a company is using debt versus equity position
C. a company's ability to earn profit
D. a company's ability to meet payable obligations
A common-size comparative statement shows __________.
A. percentages
B. dollar increases/decreases
C. whole dollar amounts
Assets that are not expected to provide benefits for a number of accounting periods are called
__________.
A. current assets
B. fixed assets
C. long-term assets
D. property, plant, and equipment
Comparative reports in which each item is expressed as a percentage of a base amount without dollar
amounts are called __________.
A. comparative financial statements
B. common-size statements
C. cash flow analysis
D. horizontal analysis
Closing entries __________.
A. need not be journalized since they appear on the worksheet
B. need not be posted if the financial statements are prepared from the worksheet
C. are not needed if adjusting entries are prepared
D. must be journalized and posted
The final step in the accounting cycle is __________.
A. preparing the post-closing trial balance
B. preparing the financial statements
C. journalizing the closing entries
D. journalizing the adjusting entries

Which of the following is a non-depreciable asset?
A. desk chairs
B. land
C. computer
D. building
A01 Online Exam 8_11 SCORE 100 Percent.

Question 1
Outstanding checks __________.
A. have been subtracted on the bank records but not the checkbook records
B. have not been presented to the bank for payment and have not been subtracted from the
checkbook
C. have not been presented to the bank for payment but have been subtracted in the checkbook
D. have been returned to the business for non-payment
Question 2
Internal control over a company's assets should include which of the following?
A. Responsibilities and duties of employees will be divided.
B. All cash receipts will be deposited into the bank the same day they arrive.
C. All cash payments will be made by check (except petty cash..
Question 3
The bank statement shows __________.
A. the beginning bank balance of the cash at the start of the month
B. the checks the bank has paid and any deposits received
C. any other charges or additions to the bank balance
Question 4
From the bank reconciliation no entry was recorded for deposits in transit. This would cause
__________.
B. assets to be understated
C. no impact since deposits in transit are already included in the balance per books
D. no impact since deposits are not recorded on the books
Question 5
Scotch Services received a credit memorandum from the bank. During the bank reconciliation they
should __________.
A. increase their cash account on the company's books
B. decrease their cash account on the company's books
C. increase the ending cash balance on the bank statement
D. decrease the ending cash balance on the bank statement
Question 6
The journal entry to reverse the entry of a customer's nonsufficient funds check would include a
__________.
A. debit to Cash
B. credit to Cash
C. debit to Accounts Payable
D. credit to Accounts Receivable
Question 7
Advantages of on-line banking include __________.
A. convenience
B. transaction speed
C. effectiveness
Question 8
The bank statement included bank charges. On the bank reconciliation, the item is __________.
A. an addition to the balance per company books
B. an addition to the balance per bank statement
C. a deduction from the balance per bank statement
D. a deduction from the balance per company books
Question 9
The bank charged another company's check against our account, this would be included on the bank
reconciliation as a(n. __________.
A. addition to the balance per books
B. subtraction from the balance per books
C. addition to the balance per bank
D. subtraction from the balance per bank
Question 10
A nonsufficient funds check was returned to your company. How does the bank treat this on your
bank statement?
A. It is added to the bank balance.
B. It is shown as a debit memo.
C. It is shown as a credit memo.
D. None of these answers are correct.

Question 11
Determine the adjusted cash balance per bank for Santa's Packaging on November 30, from the
following information.
Cash balance on the bank statement
$2,350
Customer's check returned—NSF
500
Customer's note collected by the bank
600
Deposits in transit, November 30
1,400
Outstanding checks, November 30
2,650
A. $1,250
B. $1,100
C. $1,550
D. $1,350
Question 12
Which item should be added to the company's book balance during the bank reconciliation?
A. deposit in transit
B. check outstanding
C. bank service charge
D. note collected by the bank
Question 13
An example of an internal control is __________.

A. the use of a bank account
B. the use of pre-numbered checks
C. the use of checks with reference source documents
Question 14
Calculate, from the following information the adjusted cash balance at the end of April.
Bank statement ending cash balance
$2,000
General ledger cash balance ending
3,250
Bank monthly service charge
45
Deposits in transit
2,500
Outstanding checks
1,500
NSF check returned with bank statement
205
A. $3,000
B. $4,250
C. $4,000
D. $5,500
Question 15
How would outstanding checks be handled when reconciling the ending cash balance per the bank
statement to the correct adjusted cash balance?
A. They would be added to the balance of the bank statement.
B. They would be subtracted from the balance of the bank statement.
C. They would be added to the balance per books.
D. They would be ignored.
Question 16
Which item(s. will require a journal entry to update the balance in the Cash account?
A. checks outstanding and deposits in transit
B. bank service charges, note collected by the bank, and deposits in transit
C. bank service charges, note collected by the bank, and error made by Accounting Services
Question 17
A restrictive endorsement on a check __________.
A. can be further endorsed by someone else
B. is the safest endorsement for businesses
C. permits the bank to use its best judgment
Question 18
Which of the following bank reconciliation items would be reflected in a journal entry?
A. error made by the bank
B. outstanding checks
C. bank service charges
D. deposit in transit
Question 19
Endorsing a check __________.

A. guarantees payment
B. transfers the right to deposit or transfer cash
C. cancels the transaction
Question 20
Company policy for internal control should include all of the following EXCEPT for what?
A. Employees will be rotated.
B. Monthly bank statements should be sent to and reconciled by the same employees who
authorize payments and write checks.
C. The owner (or responsible employee. signs all checks after receiving authorization to pay from
the departments concerned.
D. At time of payment, all supporting invoices or documents will be stamped "paid."

A01 Introduction To Accounting

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A01 Introduction to Accounting

Part A (20 points)

2 Owner made a cash investment into the company $5,000

8 Bought supplies on account $100.

10 Paid salaries, $700

15 Paid for supplies purchased on October 8

21 Received company telephone bill, to be paid later, $30

Part B (5 points each for a possible total of 50 points)

(a) Earned $7,000 fees; customer will pay later.

(c) Paid $3,000 for rent for January.

(d) Purchased $2,500 of supplies on account.

(e) A. Allen $1,000 investment in the company.

(f) Received $7,000 in cash for fees earned previously.

(g) Paid $1,200 to creditors on account.

(i) Received $7,150 from customers on account.

(j) A. Allen withdrawal of $1,750.

Account Debit Credit

Tutoring Fees 3,450

Wages Expense 700

Rent Expense 600

Supplies Expense 450

Insurance Expense 250 _____

Net Income 1,450 _____

a. What was the total amount of withdrawals for the year?

b. What was the net income?

c. What was the total revenue?

d. What were the total expenses?