Practice Quiz 3A

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Practice Quiz 3A

Complete the following quiz for the lesson: Accounting Cycle Part 1

The concept that assets are typically valued on a company's balance sheet at their value when first acquired (price paid upon acquisition or fair market value at the time of receipt) is referred to as the *

1 point

monetary measurement principle.

historical cost principle.

entity concept.

None of these options.

Which of the following is NOT required under GAAP? *

0 points

If possible, an objective method is to be used in the valuation of assets.

Business assets are to be accounted for separately and distinctly from the personal assets of owners.

Generally speaking, assets are to be presented on the balance sheet at their cost upon acquisition or the fair market value upon receipt.

Assets are to be presented on the balance sheet at fair market values when determinable by appraisal.

ALL these options are required under GAAP.

Debit entries increase: *

1 point

assets, liabilities and owners' equity.

assets, revenues and expenses.

assets, liabilities and expenses.

assets, expenses and dividends.

NONE of these options are correct.

A debit entry to an expense account has an increasing effect on a company's expenses which results in a decreasing effect on its net income, retained earnings and owners' equity. *

1 point

True

False

If an owner transfers cash from his personal funds to the business bank account as a capital contribution, then the effect on the company's balance sheet would be *

1 point

an increase in one asset and a decrease in another asset.

an increase in an asset and a decrease in a liability.

an increase in an asset and an increase in owner's equity.

an increase in an asset and an increase in a liability.

NONE of these options.

Which of the following events would cause a net decrease in a company's total assets? *

1 point

The profitable sale of goods to a customer on account.

Payment of utility bills not previously recorded as an obligation.

Cash purchase of furniture.

Credit purchase of equipment.

NONE of these options.

The purchase of inventory with cash *

1 point

increases assets and owners' equity.

decreases assets and owners' equity.

increases assets and liabilities.

has no net effect on total assets.

NONE of these options.

A distribution of profits to stockholders of a corporation *

1 point

decreases corporate assets and owners' equity.

decreases corporate assets and liabilities.

increases corporate assets and liabilities.

increases liabilities and owners' equity.

NONE of these options.

Bruce Manufacturing purchased equipment for $16,000, paying $9,000 cash and executing a $7,000 note payable. The entry for this transaction would result in a *

1 point

net increase in total assets of $16,000.

net increase in total liabilities of $16,000.

net increase in total assets of $7,000.

net decrease in total assets of $9,000.

NONE of these options.

The journal entry to record a company's purchase of inventory on account would include *

1 point

a debit to the "accounts payable" account and a credit to the "inventory" account.

a debit to the "inventory" account and a credit to the "cash" account.

a debit to the "inventory" account and a credit to the "accounts payable" account.

a debit to an expense account and a credit to the "accounts payable" account.

NONE of these options.

The journal entry to record a company's sale of inventory to a customer on account would include debits to which of the following accounts? *

1 point

Inventory and Cost of Goods Sold.

Account Receivable and Inventory.

Costs of Goods Sold and Accounts Payable.

Sales Revenue and Account Receivable.

NONE of these options.

The journal entry to record a company's cash collection of accounts receivable would include a credit to the following account: *

1 point

Sales Revenues

Cash

Accounts Payable

Accounts Receivable

NONE of these options.

The journal entry to record the payment of a prior month's utility bill that was previously recorded would include a debit to the following account: *

1 point

Utilities Expense

Utilities Payable

Cash

Prepaid Utilities

NONE of these options.

The journal entry to record the payment of a prior month's utility bill that was not previously recorded would include a debit to the following account: *

1 point

Utilities Expense

Utilities Payable

Cash

Prepaid Utilities

None of the above.

The journal entry to record the cash distribution of a company's profit to its owners would include a debit to the following account: *

1 point

Cash

Capital Contributions

Dividends

Expenses

NONE of these options.

On December 30, a firm's balance sheet showed assets of $390,000, liabilities of $180,000, and owner's equity of $210,000. On December 31 the firm (1) paid off Accounts Payable of $49,000, and (2) paid rent of $16,000 due on their building (not previously recorded). If a new balance sheet is prepared after these transactions, assets, liabilities, and owner's equity, respectively, would be *

1 point

$325,000, $131,000, and $194,000.

$325,000, $115,000, and $210,000.

$325,000, $180,000, and $145,000.

$341,000, $131,000, and $210,000.

NONE of these options.

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