PA - Midterm Practice

02:37 13/03/2024 PA_Midterm Practice
PA_Midterm Practice Total points 58/80
ACC201_Principles of Accounting (Chapter 1-6)
Student name *
Khánh Ngọc
Student ID *
0901141346
Class (Example: PA1) *
PA14
1. Which of the following is not one of the three forms of business 1/1
organization?
a. Corporations
b. Partnerships
c. Proprietorships
d. Investors
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2. Which of the following would not be considered an internal user of 0/1

accounting data for the Xanadu Company?
a. President of the company
b. Production manager
c. Merchandise inventory clerk
d. President of the employees' labor union
Correct answer
d. President of the employees' labor union
3. The cost of assets consumed or services used is also known as 1/1
a. a revenue.
b. an expense.
c. a liability.
d. an asset.
4. The best definition of assets is the 0/1
a. cash owned by the company.
b. collections of resources belonging to the company and the claims on these

resources.
c. owners’ investment in the business.
d. resources belonging to a company that have future benefit to the company.
Correct answer
d. resources belonging to a company that have future benefit to the company.
5. Rodgers Company compiled the following financial information as of 1/1

December 31, 20XX:
Sales revenue $1,120,000
Owner’s capital 240,000
Buildings 320,000
Operating expenses 1,000,000
Cash 280,000
Drawings 80,000
Inventory 40,000
Accounts payable 160,000
Accounts receivable 120,000
Rodger’s assets on December 31, 20XX are
a. $1,880,000.
b. $1,360,000.
c. $640,000.
d. $760,000.
6. As of January 1, 20XX, Elena’s Store had a balance in its capital 1/1

account of $100,000. During the year Elena’s Store had revenues of
$80,000 and expenses of $45,000. In addition, the owner withdrew cash of
$20,000. What is the balance in Owner’s capital at December 31, 20XX for
Elena’s Store?
a. $100,000
b. $115,000
c. $135,000
d. $155,000
7. Which of the following financial statements is concerned with the 1/1

company at a point in time?
a. Balance sheet
b. Income statement
c. Statement of owner’s equity
d. Statement of cash flows
8. The economic entity assumption requires that the activities 1/1
a. of a sole proprietorship cannot be distinguished from the personal economic

events of its owners
b. must be reported to the Securities and Exchange Commission.
c. of an entity be kept separate from the activities of its owner.
d. of different entities can be combined if all the entities are corporations.
9. At December 1, 2016, Dubois Company’s accounts receivable balance 0/1

was $1,300. During December, Dubois had credit sales of $7,400 and
collected accounts receivable of $6,000. At December 31, 2016, the
accounts receivable balance is
a. $100 debit
b. $100 credit
c. $2,700 debit
d. $2,700 credit
10. During 2016, its first year of operations, Aida’s Bakery had revenues of 1/1
$65,000 and expenses of $35,000. The business had owner’s drawings of
$22,000. What is the amount of owner’s equity at December 31, 2016?
a. $22,000 debit
b. $8,000 credit
c. $0
d. $30,000 credit
11. What is the total dollar amount of assets to be classified as current 0/1
assets?
a. $855,000
b. $600,000
c. $510,000
d. $435,000
Correct answer
a. $855,000
12. What is the total dollar amount of assets to be classified as property, 1/1
plant, and equipment?
a. $990,000
b. $525,000
c. $735,000
d. $585,000
13. What is the total dollar amount of assets to be classified as 0/1

investments?
a. $525,000
b. $0
c. $255,000
d. $465,000
Correct answer
b. $0
14. On a classified balance sheet, companies usually list current assets 1/1
a. in alphabetical order.
b. with the largest dollar amounts first.
c. in the order in which they are expected to be converted into cash.
d. in the order of acquisition.
15. A T-account is 1/1
a. Used for accounts that have both a debit and credit balance
b. What the computer uses to organize bytes of information
c. A special account used instead of a trial balance
d. A way of depicting the basic form of an account
16. The revenue recognition principle state that: 1/1
a. Expenses should be matched with revenues
b. Revenue should be recognized in the accounting period in which a

performance obligation is satisfied
c. The fiscal year should correspond with the calendar year
d. The economic life of a business can be divided into artificial time periods.
17. If a business has received cash in advance of services performed and 1/1
credits a liability 1. account, the adjusting entry needed after the services
are performed will be:
a. debit Unearned Service Revenue and credit Cash.
b. debit Unearned Service Revenue and credit Service Revenue.
c. debit Unearned Service Revenue and credit Prepaid Expense.
d. debit Unearned Service Revenue and credit Accounts Receivable.
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18. A law firm has billed their clients for services performed. They 0/1
subsequently received payments from their clients. What entry will the law
firm make upon receipt of the payments?
a. Debit Unearned Service Revenue and credit Service Revenue
b. Debit Cash and credit Accounts Receivable
c. Debit Accounts Receivable and credit Service Revenue
d. Debit Cash and credit Service Revenue
Correct answer
b. Debit Cash and credit Accounts Receivable
19. The expense recognition principle matches: 1/1
a. customers with businesses.
b. expenses with revenues.
c. assets with liabilities.
d. creditors with businesses.
20. Given the data below for a firm in its first year of operation, determine 1/1
net income under the accrual basis of accounting.
Revenue recognized $19,000
Accounts receivable 3,000
Expenses incurred 7,250
Accounts payable (related to expenses) 750
Supplies purchased with cash 1,800
a. $11,750
b. $14,000
c. $9,500
d. $12,200
21. La More Company had the following transactions during 20X1. 0/1
• Sales of $9,000 on account
• Collected $4,000 for services to be performed in 20X2
• Paid $2,650 cash in salaries
• Purchased airline tickets for $500 in December for a trip to

take place in 20X2
What is La More’s 20X1 net income using cash basis accounting?
a. $10,350
b. $1,350
c. $9,850
d. $850
Correct answer
d. $850
22. The primary source used in the preparation of the financial statements 1/1
is the:
a. trial balance.
b. post-closing trial balance.
c. general trial balance.
d. adjusted trial balance.
23. Which of the following statements about the accrual basis of 1/1
accounting is False?
a. Events that change a company’s financial statements are recorded in the periods
in which the events occur.
b. Revenue is recorded only when cash is received, and expense is recorded

only when cash is paid.
c. Revenue is recognized in the period in which services are performed
d. This basis is in accordance with GAAP (Generally accepted accounting

principles)
24. On July 1 the Fisher Shoe Store paid $24,000 to Acme Realty for 6 0/1
months rent beginning July 1. Prepaid Rent was debited for the full
amount. If financial statements are prepared on July 31, the adjusting
entry to be made by the Fisher Shoe Store is:
a. debit Rent Expense, $24,000; credit Prepaid Rent, $4,000.
b. debit Prepaid Rent, $4,000; credit Rent Expense, $4,000.
c. debit Rent Expense, $4,000; credit Prepaid Rent, $4,000.
d. debit Rent Expense, $24,000; credit Prepaid Rent, $20,000.
25. The Harris Company purchased equipment for $15,000 on December 1/1
1. It is estimated that annual depreciation on the computer will be $3,000.
If financial statements are to be prepared on December 31, the company
should make the following adjusting entry:
a. debit Depreciation Expense, $3,000; credit Accumulated Depreciation, $3,000.
b. debit Depreciation Expense, $250; credit Accumulated Depreciation, $250.
c. debit Depreciation Expense, $12,000; credit Accumulated Depreciation, $12,000.
d. debit Equipment, $15,000; credit Accumulated Depreciation, $15,000.
26. If a company fails to adjust an Unearned Rent Revenue account for 1/1
rent that has been recognized, what effect will this have on that month’s
financial statements?
a. Assets will be understated and revenues will be understated.
b. Liabilities will be understated and revenues will be understated.
c. Liabilities will be overstated and revenues will be understated.
d. Assets will be overstated and revenues will be understated.
27. Adjusting entries are made to ensure that: 1/1
a. expense are recognized in the period in which they are incurred.
b. revenues are recorded in the period in which the performance obligation is

satisfied.
c. balance sheet and income statement accounts have correct balances at the end
of an accounting period.
d. All of these answer choices are correct.
28. Chris Harper earned a salary of $550 for the last week of January. She 0/1
will be paid on Feb 1. The adjusting entry for Chris’ employer at Jan 31 is:
a. Dr. Salaries and Wages Expense $550 ; Cr. Salaries and Wages Payable $550
b. Dr Salaries and Wages Expense $550 ; Cr Cash $550
c. Dr Salaries and Wages Payable $550 ; Cr Cash $550
d. No entry is required
Correct answer
a. Dr. Salaries and Wages Expense $550 ; Cr. Salaries and Wages Payable $550
29. Which one of the following is not an application of revenue 1/1

recognition?
a. Receiving cash for services performed.
b. Accepting cash from an established customer for services to be performed

over the next three months.
c. Recording revenue as an adjusting entry on the last day of the accounting period.
d. Billing customers on June 30 for services completed during June.
30. A law firm received $5,000 cash for legal services to be rendered in 1/1
the future. The full amount was credited to the liability account Unearned
Service Revenue. If the legal services have been rendered at the end of the
accounting period and no adjusting entry is made, this would cause
a. liabilities to be understated.
b. revenues to be understated
c. expenses to be overstated.
d. net income to be overstated.
31. Wallowa Company purchased supplies costing $6,000 and debited 1/1
Supplies for the full amount. At the end of the accounting period, a physical
count of supplies revealed $1,800 still on hand. The appropriate adjusting
journal entry to be made at the end of the period would be
a. Debit Supplies Expense, $1,800; Credit Supplies, $1,800.
b. Debit Supplies, $1,800; Credit Supplies Expense, $1,800
c. Debit Supplies Expense, $4,200; Credit Supplies, $4,200.
d. Debit Supplies, $4,200; Credit Supplies Expense, $4,200
32. At December 31, 2016, before any year-end adjustments, Obama 0/1
Company’s Insurance Expense account had a balance of $2,600 and its
Prepaid Insurance account had a balance of $7,600. It was determined that
$3,200 of the Prepaid Insurance had expired. The adjusted balance for
Insurance Expense for the year would be
a. $3,200.
b. $2,600
c. $5,800.
d. $4,400.
Correct answer
c. $5,800.
33. Boneta City College sold season tickets for the 2016 football season 0/1
for $250,000. A total of 8 games will be played during September, October
and November. In September, two games were played. In October, three
games were played. The balance in Unearned Ticket Revenue at October 31
is
a. $93,750.
b. $0.
c. $156,250
d. $50,000.
Correct answer
a. $93,750.
34. Salem Corporation purchased a one-year insurance policy in January 1/1

2016 for $51,000. The insurance policy is in effect from April 2016 through
March 2017. If the company neglects to make the proper year-end
adjustment for the expired insurance
a. net income and assets will be overstated by $38,250.
b. net income and assets will be understated by $8,500.
c. net income and assets will be overstated by $8,500.
d. net income and assets will be understated by $38,250.
35. SWC Bus Charter signed a four-month note payable in the amount of 1/1
$30,000 on September 1. The note requires interest at an annual rate of
5%. The amount of interest to be accrued at the end of September is
a. $500.
b. $125.
c. $200.
d. $1,500.
36. A business pays weekly salaries of $35,000 on Friday for a five-day 0/1
week ending on that day. The adjusting entry necessary at the end of the
fiscal period ending on a Wednesday is
a. debit Salaries and Wages Expense, $14,000; credit Salaries and Wages Payable,
$14,000.
b. debit Salaries and Wages Expense, $21,000; credit Salaries and Wages Payable,
$21,000.
c. debit Salaries and Wages Expense, $21,000; credit Cash, $21,000.
d. debit Salaries and Wages Payable, $21,000; credit Cash, $21,000.
37. An Accountant collected $550 of service fees in advance. She 1/1

erroneously debited Cash for $505 and credited Accounts Receivable for
$505. The correcting entry is
a. Dr Cash $45 ; Dr Accounts Receivable $505 ; Cr Unearned Service Revenue

$550
b. Dr Cash $550 ; Cr Service Revenue $550
c. Dr Cash $45 ; Dr Accounts Receivable $45 ; Cr Unearned Service Revenue $90
d. Dr Cash $505 ; Cr Accounts Receivable $505
38. Accumulated Depreciation is a(n): 0/1
a. expense account.
b. stockholders’ equity account.
c. liability account.
d. contra asset account.
Correct answer
d. contra asset account.
39. The proper sequence for the accounting cycle is 1/1
a. analyze, journalize, post, adjust, prepare statements, close.
b. post, journalize, analyze, prepare statements, close, adjust.
c. prepare statements, journalize, post, adjust, close, analyze.
d. journalize, post, close, prepare statements, adjust, analyze.
40. After all the closing entries have been posted, the balance of the 1/1
income summary will be
a. a debit if a net income has occurred.
b. a debit if a net loss has occurred.
c. a credit if a net loss has occurred.
d. zero.
41. A current asset is 1/1
a. the last asset purchased by a business.
b. an asset which is currently being used to produce a product or service.
c. usually found as a separate classification in the income statement.
d. expected to be converted to cash or used in the business within a relatively

short period of time.
42. The primary source used in the preparation of the financial 1/1
statements is the:
a. trial balance.
b. post-closing trial balance.
c. general trial balance.
d. adjusted trial balance.
43. Which of the following accounts is a temporary account? 1/1
a. Owner’s equity
b. Unearned Revenue
c. Cash
d. Owner’s dawings
44. A post-closing trial balance will show: 0/1
a. zero balances for all accounts.
b. zero balances for balance sheet accounts.
c. only balance sheet accounts.
d. only income statement accounts.
Correct answer
c. only balance sheet accounts.
45. The following information is from the Income Statement of the M & J’s 1/1
CPA Firm.
The entry to close the Income Summary includes a:
a. credit to Income Summary for $52,000.
b. debit to Income Summary for $52,000.
c. debit to Owner’s Equity for $52,000.
d. credit to Service Revenue for $52,000.
46. At January 31, 2016, the balance in Bigelow Inc.’s supplies account 1/1
was $780. During February, Bigelow purchased supplies of $900 and used
supplies of $1,150. At the end of February, the balance in the supplies
account should be
a. $530 debit.
b. $1,030 debit.
c. $530 credit.
d. $830 debit.
47. Boise Co. pays its employees twice a month, on the 7th and the 21st. 1/1
On June 21, Boise Co. paid employee salaries of $6,000. This transaction
would
a. increase owner’s equity by $6,000.
b. decrease the balance in Salaries and Wages Expense by $6,000.
c. decrease net income for the month by $6,000.
d. be recorded by a $6,000 debit to Salaries and Wages Payable and a $6,000 credit
to Salaries and Wages Expense.
48. At September 1, 2016, Hotel Suites Co. reported owner’s capital of 0/1
$147,000. During the month, Hotel Suites generated revenues of $48,000,
incurred expenses of $26,000, purchased equipment for $5,000 and
withdrew cash of $3,000. What is the amount of owner’s capital at
September 30, 2016?
a. $161,000
b. $166,000
c. $169,000
d. $171,000
Correct answer
b. $166,000
49. The income statement for the month of June, 2016 of Snap Shot, Inc. 0/1
contains the following information:
At June 1, 2016, Snap Shot reported owner’s equity of $36,000. The

company had no owner drawings during June. At June 30, 2016, the
company will report owner’s equity of
a. $30,700.
b. $36,000.
c. $38,000.
d. $43,300.
50. Cash was paid by Janer's Cleaning Service to creditors on account. 1/1
Which of the following entries for Janer's Cleaning Service records this
transaction?
a. Cash, debit; Debbi Janer, Capital, credit
b. Accounts Payable, debit; Cash, credit
c. Accounts Receivable, debit; Cash, credit
d. Accounts Payable, debit; Account Receivable, credit
51. Gently Laser Clinic purchased laser equipment for $8,500, paid $2,250 1/1
down, with the remainder to be paid later. The correct entry would be
a. Debit Equipment $2,250; credit Cash $2,250
b. Debit Cash $2,250; debit Accounts Payable $6,250; credit Equipment $8,500
c. Debit Equipment Expense $8,500; credit Accounts Payable $2,250; credit Cash
$6,250.
d. Debit Equipment $8,500; credit Accounts Payable $6,250; credit Cash $2,250.
52. On September 10, MFP Co. paid employee salaries of $7,000 owed to 1/1
its employees last month. What are the effects of this transaction on the
accounting equation?
a. Expenses increase and liabilities increase.
b. Assets decrease and liabilities decrease.
c. Assets decrease and expenses decrease.
d. Expenses decrease and liabilities decrease.
53. Following are transactions of Gotebo Tanners, Inc., a new company, 1/1
during the month of January:
What was the total amount of Gotebo's liabilities following these six
transactions?
a. $12,300.
b. $27,300.
c. $22,600.
d. $15,500.
54. Following are transactions of Gotebo Tanners, Inc., a new company, 1/1
during the month of January:
How many of these transactions decreased Gotebo's total assets?
a. One.
b. Two.
c. Three.
d. Four.
55. How many of the following transactions would increase total liabilities 0/1
in the current period?
- Pay for advertising that will not occur until the following period.
- Collect cash from customer prior to providing service.
- Incur, but not pay, utilities cost in the current period.
- Order supplies that have not yet been received.
a. One.
b. Two.
c. Three.
d. Four.
Correct answer
b. Two.
56. Summer Leasing received $12,000 from a customer to cover 24 0/1

months of rent in advance. How should Summer record this transaction?
a. Debit Prepaid Rent; credit Rent Expense.
b. Debit Cash; credit Deferred Revenue.
c. Debit Cash; credit Service Revenue.
d. Debit Rent Expense; credit Cash.
Correct answer
b. Debit Cash; credit Deferred Revenue.
57. A company received a bill for newspaper advertising services, $400. 1/1
The bill will be paid in 10 days. How would the transaction be recorded
today?
a. Debit Advertising Expense $400, credit Accounts Payable $400.
b. Debit Accounts Payable $400, credit Advertising Expense $400.
c. Debit Accounts Payable $400, credit Cash $400.
d. Debit Advertising Expense $400, credit Cash $400.
58. The following table contains financial information for Trumpeter Inc. 1/1
before closing entries:
What is the amount of Trumpeter's net income?
a. $1,900.
b. $2,400.
c. $7,600.
d. $6,600.
59. If Income Summary has a credit balance after revenues and expenses 1/1
have been closed into it, the closing entry for Income Summary will include
a
a. debit to the owner’s capital account
b. credit to the owner’s capital account.
c. credit to the owner’s drawings account.
d. debit to the owner’s drawings account
60. Eastwood Post Pavillion received a $650 check from a customer for 1/1
the balance due. The transaction was erroneously recorded as a debit to
Cash $560 and a credit to Service Revenue $560. The correcting entry is
a. debit Cash, $90 and Accounts Receivable, $560; credit Service Revenue, $650.
b. debit Cash, $650; credit Accounts Receivable, $650.
c. debit Accounts Receivable, $650; credit Cash, $90 and Service Revenue, $560.
d. debit Cash, $90 and Service Revenue, $560; credit Accounts Receivable,
$650.
61. The purpose of the post-closing trial balance is to 0/1
a. prove that no mistakes were made.
b. prove the equality of the income statement account balances that are carried
forward into the next accounting period
c. prove the equality of the balance sheet account balances that are carried forward
into the next accounting period.
d. list all the balance sheet accounts in alphabetical order for easy reference.
62. Which of the following steps in the accounting cycle may be 1/1
performed most frequently?
a. Post closing entries
b. Journalize closing entries
c. Prepare a trial balance
d. Prepare a post-closing trial balance
63. At the beginning of the year, Paradise Co. had an inventory of 1/1
$200,000. During the year, the company purchased goods costing
$900,000. Paradise Co reported ending inventory of $300,000 at the end of
the year. Their cost of goods sold is
a. $400,000
b. $1,400,000
c. $800,000
d. $1,000,000
64. Under the perpetual inventory system, in addition to making the entry 1/1
to record a sale, a company would
a. debit Inventory and credit Cost of Goods Sold
b. debit Cost of Goods sold and credit Inventory
c. make no additional entry until the end of the period
d. debit Cost of Goods Sold and credit Purchases
65. Gross profit equals the difference between net sales and 1/1
a. operating expenses
b. net income
c. cost of goods sold plus operating expenses
d. cost of goods sold
66. The entry for a buyer to record the return of goods under a perpetual 1/1
inventory system assuming the purchase was made on account would
include a
a. debit to purchase returns and allowances
b. debit to accounts payable
c. debit to inventory
d. credit to accounts payable
67. Under the perpetual system, cash freight costs incurred by the buyer 1/1
for the transporting of goods is recorded in which account?
a. Freight Expense
b. Inventory
c. Freight-Out
d. Freight-In
68. Cost of goods sold can be calculating by which of the following 1/1
formulas?
a. Ending Inventory + Sales – Beginning Inventory
b. Beginning Inventory + Net Purchases – Ending Inventory
c. Beginning Inventory + Sales – Ending Inventory
d. Ending Inventory + Net Purchases – Beginning Inventory
69. The entry to record a sale of $1,800 with terms of 2/10, n/30 will 1/1
include a
a. credit to Sales Revenue for $1,800.
b. credit to Accounts Receivable for $1,800.
c. debit to Sales Revenue for $1,764.credit to Sales Revenue for $1,800.
d. debit to Sales Discounts for $36.
70. The entry to record the receipt of payment within the discount period 1/1
on a sale of $10,000 with terms of 3/15, n/60 will include a
a. debit to Cash for $9,700.
b. credit to Sales Revenue for $10,000.
c. credit to Sales Discounts for $300.
d. credit to Accounts Receivable for $9,700.
71. Under a perpetual inventory system 0/1
a. the account purchase returns and allowances is credited when goods are
returned to vendors.
b. there is no need for a year-end physical count.
c. accounting records continuously disclose the amount of inventory.
d. increases in inventory resulting from purchases are debited to purchases
Correct answer
c. accounting records continuously disclose the amount of inventory.
72. In the credit terms of 3/15, n/60, the “15” represents the 1/1
a. percent of the cash discount.
b. full amount of the invoice.
c. number of days when the entire amount is due.
d. number of days in the discount period.
73. Livingston Company sells merchandise on account for $6,000 to 1/1

Briggs Inc. on April 10 with credit terms 3/15, n/60. Briggs returns $1,000
of the merchandise on April 15. Briggs paid for the remainder of the goods
within the discount period on April 20. What entry would Briggs make to
record the return on April 15 if it uses the perpetual inventory system?
a. Dr Purchase Returns $1,000 and Cr Inventory $1,000
b. Dr Cash $1,000 and Cr Inventory $1,000
c. Dr Accounts payable $970 and Cr Inventory $970
d. Dr Accounts Payable $1,000 and Cr Inventory $1,000
74. Livingston Company sells merchandise on account for $6,000 to 1/1

Briggs Inc. on April 10 with credit terms 3/15, n/60. Briggs returns $1,000
of the merchandise on April 15. Briggs paid for the remainder of the goods
within the discount period on April 20. What entry would Briggs make to
record the payment on April 20 if it uses the perpetual inventory system?
a. Dr Accounts Payable $5,000; Cr Inventory $150 and Cr Cash $4,850
b. Dr Accounts Payable $5,000; Cr Sales discounts $150 and Cr Cash $4,850
c. Dr Accounts Payable $6,000 and Cr Cash $6,000
d. Dr Accounts Payable $5,820 and Cr Cash $5,820
75. Maggie’s Market recorded the following events involving a recent 0/1
purchase of merchandise:
· Received goods for $50,000, terms 2/10, n/30.
· Returned $1,500 of the shipment for credit.
· Paid $400 freight on the shipment.
· Paid the invoice within the discount period.
As a result of these events, the company’s inventory increased by
a. $47,930
b. $49,400
c. $48,900
d. $48,192
Correct answer
a. $47,930
76. McIntyre Company made a purchase of merchandise on credit from 1/1

Marvin Company on August 8, for $11,000, terms 3/10, n/30. On August 17,
McIntyre makes the appropriate payment to Marvin. The entry on August
17 for McIntyre Company is
a. Debit Account Payable, $ 10,670; Credit Cash, $ 10,670
b. Debit Account Payable, $ 11,000; Credit Purchase Returns and Allowances, $

330; Credit Cash, $ 10,670.
c. Debit Accounts Payable, $ 11,000; Credit Cash, $ 11,000
d. Debit Account Payable, $ 11,000; Credit Inventory, $ 330; Credit Cash, $

10,670
77. Honey Beez Company has the following picture. If Honey Beez 1/1
Company has 7,000 units on hand at December 31, the cost of ending
inventory under the average-cost method is:
a. $56,000.
b. $84,000.
c. $70,000.
d. $75,250.
78. Harper Co. overstated its ending inventory by $3,500 on December 31, 0/1
2020. It did not correct the error in 2020 or in 2021. As a result, Harper Co's’
equity was
a. Overstated at 12/31/2020 and understated at 12/31/2021
b. Understated at 12/31/2020 and understated at 12/31/2021
c. Overstated at 12/31/2020 and overstated at 12/31/2021
d. Overstated at 12/31/2020 and properly stated at 12/31/2021
Correct answer
d. Overstated at 12/31/2020 and properly stated at 12/31/2021
79. Didee has the following inventory information. Assuming that a 1/1
perpetual inventory system is used, what is the ending inventory on a FIFO
basis?
a. $5,860
b. $4,744
c. $4,940
d. $6,346
80. Quayle Bookstore had 500 units on hand at January 1, costing $9 1/1
each. Purchases and sales during the month of January were as picture.
Quayle does not maintain perpetual inventory records. According to a
physical count, 360 units were on hand at January 31. The cost of the
inventory at January 31, under the FIFO method is:
a. $3,820
b. $3,240
c. $3,650
d. $4,100
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02:37 13/03/2024 PA_Midterm Practice

PA_Midterm Practice Total points 58/80

ACC201_Principles of Accounting (Chapter 1-6)

Class (Example: PA1) *

2. Which of the following would not be considered an internal user of 0/1

a. President of the company

c. Merchandise inventory clerk

d. President of the employees' labor union

d. President of the employees' labor union

3. The cost of assets consumed or services used is also known as 1/1

4. The best definition of assets is the 0/1

a. cash owned by the company.

b. collections of resources belonging to the company and the claims on these

c. owners’ investment in the business.

d. resources belonging to a company that have future benefit to the company.

d. resources belonging to a company that have future benefit to the company.

5. Rodgers Company compiled the following financial information as of 1/1

Owner’s capital 240,000

Operating expenses 1,000,000

Accounts payable 160,000

Accounts receivable 120,000

Rodger’s assets on December 31, 20XX are

6. As of January 1, 20XX, Elena’s Store had a balance in its capital 1/1

7. Which of the following financial statements is concerned with the 1/1

c. Statement of owner’s equity

d. Statement of cash flows

8. The economic entity assumption requires that the activities 1/1

a. of a sole proprietorship cannot be distinguished from the personal economic

b. must be reported to the Securities and Exchange Commission.

c. of an entity be kept separate from the activities of its owner.

d. of different entities can be combined if all the entities are corporations.

9. At December 1, 2016, Dubois Company’s accounts receivable balance 0/1

13. What is the total dollar amount of assets to be classified as 0/1

b. with the largest dollar amounts first.

c. in the order in which they are expected to be converted into cash.

d. in the order of acquisition.

15. A T-account is 1/1

b. What the computer uses to organize bytes of information

c. A special account used instead of a trial balance

d. A way of depicting the basic form of an account

16. The revenue recognition principle state that: 1/1

a. Expenses should be matched with revenues

b. Revenue should be recognized in the accounting period in which a

c. The fiscal year should correspond with the calendar year

a. debit Unearned Service Revenue and credit Cash.

b. debit Unearned Service Revenue and credit Service Revenue.

c. debit Unearned Service Revenue and credit Prepaid Expense.

d. debit Unearned Service Revenue and credit Accounts Receivable.

a. Debit Unearned Service Revenue and credit Service Revenue

b. Debit Cash and credit Accounts Receivable

c. Debit Accounts Receivable and credit Service Revenue

d. Debit Cash and credit Service Revenue

b. Debit Cash and credit Accounts Receivable

19. The expense recognition principle matches: 1/1

a. customers with businesses.

b. expenses with revenues.

c. assets with liabilities.

d. creditors with businesses.

Revenue recognized $19,000

Accounts receivable 3,000

Expenses incurred 7,250

Accounts payable (related to expenses) 750

Supplies purchased with cash 1,800