Accounting I

Chapter 1

100

On April 25, Gregg Repair Service extended an offer of $115,000 for land that had been priced for sale at $140,000. On May 3, Gregg Repair Service accepted the seller’s counteroffer of $125,000. On June 20, the land was assessed at a value of $95,000 for property tax purposes. On August 4, Gregg Repair Service was offered $150,000 for the land by a national retail chain. At what value should the land be recorded in Gregg Repair Service’s records? a. $115,000 b. $95,000 c. $140,000 d. $125,000

d. $125,000

200

The debt created by a business when it makes a purchase on account is referred to as an a. account payable b. account receivable c. asset d. expense payable

a. account payable

300

Which one of the following is the authoritative body in the United States having the primary responsibility for developing accounting principles? a. FASB b. IRS c. SEC d. AICPA

a. FASB

400

A business paid $7,000 to a creditor in payment of an amount owed. The effect of the transaction on the accounting equation was to a. increase one asset, decrease another asset b. decrease an asset, decrease a liability c. increase an asset, increase a liability d. increase an asset, increase owner's equity

b. decrease an asset, decrease a liability

500

How does receiving a bill to be paid next month for services received affect the accounting equation? a. assets decrease; owner's equity decreases b. assets increase; liabilities increase c. liabilities increase; owner's equity increases d. liabilities increase; owner's equity decreases

d. liabilities increase; owner's equity decreases

Chapter 2A

100

A list of the accounts is called a. ledger b. chart of accounts c. T-Account d. Debit

b. chart of accounts

200

A patient has a physical examination and asks the bookkeeper to mail the bill. The bookkeeper should a. make no entry until the cash is received b. Cash, debit; Accounts Receivable, credit c. Cash, debit; Fees Earned, credit d. Accounts Receivable, debit; Fees Earned, credit

d. Accounts Receivable, debit; Fees Earned, credit

300

Which of the following entries records the payment of rent for the current month? a. Cash, debit; Rent Expense, credit b. Rent Expense, debit; Cash, credit c. Rent Expense, debit; Accounts Receivable, credit d. Accounts Payable, debit; Rent Expense, credit

b. Rent Expense, debit; Cash, credit

400

Which of the following entries records the payment of an account payable? a. debit Cash; credit Accounts Payable b. debit Accounts Receivable; credit Cash c. debit Cash; credit Supplies Expense d. debit Accounts Payable; credit Cash

d. debit Accounts Payable; credit Cash

500

Office supplies were sold by Ari’s Alarm Service at cost to another repair shop, with cash received. Which of the following entries for Ari’s Alarm Service records this transaction? a. Office Supplies, debit; Cash, credit b. Office Supplies, debit; Accounts Payable, credit c. Cash, debit; Office Supplies, credit d. Accounts Payable, debit; Office Supplies, credit

c. Cash, debit; Office Supplies, credit

Chapter 2B

100

Which of the following types of accounts have a normal credit balance? a. assets and liabilities b. liabilities and expenses c. revenues and liabilities d. capital and drawing

c. revenues and liabilities

200

Revenue should be recognized when a. cash is received b. the service is performed c. the customer places an order d. the supplier charges an order

b. the service is performed

300

A credit balance in which of the following accounts would indicate a likely error? a. Fees Earned b. Salary Expense c. Janet James, Capital d. Accounts Payable

b. Salary Expense

400

Which of the following entries records the receipt of cash from patients on account? a. Accounts Payable, debit; Fees Earned, credit b. Accounts Receivable, debit; Fees Earned, credit c. Accounts Receivable, debit; Cash, credit d. Cash, debit; Accounts Receivable, credit

d. Cash, debit; Accounts Receivable, credit

500

Which of the following accounts would be increased with a credit? a. Land, Accounts Payable, Drawing b. Accounts Payable, Unearned revenue, Collins Capital c. Collins Capital, Accounts Receivable, Unearned Revenue d. Cash, Accounts Receivable, Collins Capital

b. Accounts Payable, Unearned revenue, Collins Capital

Chapter 3

100

Adjusting entries are a. the same as correcting entries b. needed to bring accounts up to date and match revenue and expense c. optional under generally accepted accounting principles d. rarely needed in large companies

b. needed to bring accounts up to date and match revenue and expense

200

Prepaid expenses are eventually expected to a. become expenses when their future economic value expires. b. become revenues when services are performed. c. become expenses in the period when they are paid. d. become revenues when the liability is no longer owed.

a. become expenses when their future economic value expires.

300

Which account would normally not require an adjusting entry? a. Wages Expense b. Accounts Receivable c. Accumulated Depreciation d. Smith, Capital

d. Smith, Capital

400

The entry to adjust for the cost of supplies used during the accounting period is a. debit Supplies Expense; credit Supplies b. debit Owner Capital; credit Supplies c. debit Accounts Payable; credit Supplies d. debit Supplies; credit Owner Capital

a. debit Supplies Expense; credit Supplies

500

A business pays weekly salaries of $25,000 on Friday for a five-day week ending on that day. The adjusting entry necessary at the end of the fiscal period ending on Tuesday is a. debit Salaries Payable, $10,000; credit Cash, $10,000 b. debit Salary Expense, $10,000; credit Drawing, $10,000 c. debit Salary Expense, $10,000; credit Salaries Payable, $10,000 d. debit Drawing, $10,000; credit Cash, $10,000

c. debit Salary Expense, $10,000; credit Salaries Payable, $10,000

Chapter 4

100

The income summary account is also called a. the imprest account b. the clearing account c. the adjustments account d. the helpful account

b. the clearing account

200

Which of the following accounts will be closed to the Capital account at the end of the fiscal year? a. Rent Expense b. Fees Earned c. Income Summary d. Depreciation Expense

c. Income Summary

300

Which of the accounts below would be closed by posting a debit to the account? a. Unearned Revenue b. Fees Earned c. Josh Morton, Drawing d. Miscellaneous Expense

b. Fees Earned

400

Which of the following accounts should be closed to Income Summary at the end of the fiscal year? a. Supplies Expense b. Accumulated Depreciation c. Prepaid Insurance d. Unearned Rent

a. Supplies Expense

500

Which of the following accounts will not be closed to Income Summary at the end of the fiscal year? a. Salaries Expense b. Fees Earned c. Unearned Rent d. Depreciation Expense

c. Unearned Rent