GB 518 Quiz 2\t\u00a0\t\u00a0\t\u00a0\t\u00a0\t\u00a0\tGB518 Financial Accounting Principles and Analysis\t\u00a0\t1. \ufffd\u00a0\u00a0\u00a0 Question : \ufffd\u00a0\u00a0 Financial statements are typically prepared in the following order:\t\u00a0\t \ufffd \ufffd \ufffd \ufffd \ufffd \ufffd \ufffd \u00a0Balance sheet, statement of retained earnings, income statement\t \ufffd \ufffd \ufffd \ufffd \ufffd \ufffd \ufffd \u00a0Statement of retained earnings, balance sheet, income statement\t \ufffd \ufffd \ufffd \ufffd \ufffd \ufffd \ufffd \u00a0Income statement, balance sheet, statement of retained earnings\t \ufffd \ufffd \ufffd \ufffd\u00a0\u00a0\u00a0 \ufffd \ufffd\u00a0 \u00a0Income statement, statement of retained earnings, balance sheet\t\u00a0\t\u00a0\tQuestion 2. \ufffd Question : \ufffd\u00a0\u00a0 A 10-column spreadsheet used to draft a company’s unadjusted trial balance, adjusting entries, adjusted trial balance and financial statements and which is an optional tool in the accounting process is a(n):\t\u00a0\t \ufffd \ufffd \ufffd \ufffd \ufffd \ufffd \ufffd \u00a0Adjusted trial balance\t\u00a0\t \ufffd \ufffd \ufffd \ufffd\u00a0\u00a0\u00a0 \ufffd \ufffd\u00a0 \u00a0Work sheet\t\u00a0\t \ufffd \ufffd \ufffd \ufffd \ufffd \ufffd \ufffd \u00a0Post-closing trial balance\t\u00a0\t \ufffd \ufffd \ufffd \ufffd \ufffd \ufffd \ufffd \u00a0Unadjusted trial balance\t\u00a0\t \ufffd \ufffd \ufffd \ufffd \ufffd \ufffd \ufffd \u00a0General ledger\t\u00a0\t \ufffd \ufffd\u00a0\t \ufffd \ufffd\u00a0\tQuestion 3. \ufffd Question : \ufffd\u00a0\u00a0 The Retained Earnings account has a credit balance of $17,000 before closing entries are made. If total revenues for the period are $55,200, total expenses are $39,800 and dividends are $9,000, what is the ending balance in the Retained Earnings account after all closing entries are made?\t\u00a0\t\u00a0\tQuestion 4. \ufffd Question : \ufffd\u00a0\u00a0 A company earned $2,000 in net income for October. Its net sales for October were $10,000. Its profit margin is:\t\u00a0\tQuestion 5. \ufffd Question : \ufffd\u00a0\u00a0 A company pays each of its two office employees each Friday at the rate of $100 per day each for a five-day week that begins on Monday. If the monthly accounting period ends on Tuesday and the employees worked on both Monday and Tuesday, the month-end adjusting entry to record the salaries earned but unpaid is:\t\u00a0\t \ufffd \ufffd \ufffd \ufffd \ufffd \ufffd \ufffd \u00a0Debit Unpaid Salaries $600 and credit Salaries Payable $600\t\u00a0\t \ufffd \ufffd \ufffd \ufffd\u00a0\u00a0\u00a0 \ufffd \ufffd\u00a0 \u00a0Debit Salaries Expense $400 and credit Salaries Payable $400\t\u00a0\t \ufffd \ufffd \ufffd \ufffd \ufffd \ufffd \ufffd \u00a0Debit Salaries Expense $600 and credit Salaries Payable $600\t\u00a0\t \ufffd \ufffd \ufffd \ufffd \ufffd \ufffd \ufffd \u00a0Debit Salaries Payable $400 and credit Salaries Expense $400\t\u00a0\t\u00a0\tQuestion 6. \ufffd Question : \ufffd\u00a0\u00a0 A company’s Office Supplies account shows a beginning balance of $600 and an ending balance of $400. If office supplies expense for the year is $3,100, what amount of office supplies was purchased during the period?\t\u00a0\t\u00a0\tQuestion 7. \ufffd Question : \ufffd\u00a0\u00a0 A company had no office supplies available at the beginning of the year. During the year, the company purchased $250 worth of office supplies. On December 31, $75 worth of office supplies remained. How much should the company report as office supplies expense for the year?\t\u00a0\t \ufffd \ufffd\u00a0\tQuestion 8. \ufffd Question : \ufffd\u00a0\u00a0 An account linked with another account that has an opposite normal balance and that is subtracted from the balance of the related account is a(n):\t\u00a0\tQuestion 9. \ufffd Question : \ufffd\u00a0\u00a0 The Income Summary account is used:\t\u00a0\t \ufffd \ufffd \ufffd \ufffd \ufffd \ufffd \ufffd \u00a0To adjust and update asset and liability accounts\t\u00a0\t \ufffd \ufffd \ufffd \ufffd\u00a0\u00a0\u00a0 \ufffd \ufffd\u00a0 \u00a0To close the revenue and expense accounts\t\u00a0\t \ufffd \ufffd \ufffd \ufffd \ufffd \ufffd \ufffd \u00a0To determine the appropriate dividend amount\t\u00a0\t \ufffd \ufffd \ufffd \ufffd \ufffd \ufffd \ufffd \u00a0In some situations to replace the income statement\t\u00a0\t \ufffd \ufffd \ufffd \ufffd \ufffd \ufffd \ufffd \u00a0To replace the retained earnings account in some businesses\t\u00a0\t\u00a0\tQuestion 10.\u00a0\u00a0\u00a0 Question : \ufffd\u00a0\u00a0 The accrual basis of accounting:\t\u00a0\t \ufffd \ufffd \ufffd \ufffd\u00a0\u00a0\u00a0 \ufffd \ufffd\u00a0 \u00a0Is generally accepted for external reporting since it is more useful for most business decisions\t \ufffd \ufffd \ufffd \ufffd \ufffd \ufffd \ufffd \u00a0Is flawed because it gives complete information about cash flows\t \ufffd \ufffd \ufffd \ufffd \ufffd \ufffd \ufffd \u00a0Recognizes revenues when received in cash\t\u00a0\t \ufffd \ufffd \ufffd \ufffd \ufffd \ufffd \ufffd \u00a0Recognizes expenses when paid in cash\t\u00a0\t \ufffd \ufffd \ufffd \ufffd \ufffd \ufffd \ufffd \u00a0Eliminates the need for adjusting entries at the end of each period\t\u00a0\t\u00a0\tQuestion 11.\u00a0\u00a0\u00a0 Question : \ufffd\u00a0\u00a0 On April 1, 2011, a company paid the $1,350 premium on a three-year insurance policy with benefits beginning on that date. What will be the insurance expense on the annual income statement for the year ended December 31, 2011?\t\u00a0\t\u00a0\tQuestion 12.\u00a0\u00a0\u00a0 Question : \ufffd\u00a0\u00a0 The main purpose of adjusting entries is to:\t\u00a0\t \ufffd \ufffd \ufffd \ufffd \ufffd \ufffd \ufffd \u00a0Record external transactions and events\t\u00a0\t \ufffd \ufffd \ufffd \ufffd\u00a0\u00a0\u00a0 \ufffd \ufffd\u00a0 \u00a0Record internal transactions and events\t\u00a0\t \ufffd \ufffd \ufffd \ufffd \ufffd \ufffd \ufffd \u00a0Recognize assets purchased during the period\t\u00a0\t \ufffd \ufffd \ufffd \ufffd \ufffd \ufffd \ufffd \u00a0Recognize debts paid during the period\t\u00a0\t \ufffd \ufffd \ufffd \ufffd \ufffd \ufffd \ufffd \u00a0Correct errors\t\u00a0\t\u00a0\t\u00a0\tQuestion 13.\u00a0\u00a0\u00a0 Question : \ufffd\u00a0\u00a0 Unearned revenue is reported on the financial statements as:\t\u00a0\t \ufffd \ufffd \ufffd \ufffd \ufffd \ufffd \ufffd \u00a0A revenue on the balance sheet\t\u00a0\t \ufffd \ufffd \ufffd \ufffd\u00a0\u00a0\u00a0 \ufffd \ufffd\u00a0 \u00a0A liability on the balance sheet\t\u00a0\t \ufffd \ufffd \ufffd \ufffd \ufffd \ufffd \ufffd \u00a0An unearned revenue on the income statement\t\u00a0\t \ufffd \ufffd \ufffd \ufffd \ufffd \ufffd \ufffd \u00a0An asset on the balance sheet\t\u00a0\t \ufffd \ufffd \ufffd \ufffd \ufffd \ufffd \ufffd \u00a0An operating activity on the statement of cash flows\t\u00a0\t\u00a0\tQuestion 14.\u00a0\u00a0\u00a0 Question : \ufffd\u00a0\u00a0 The length of time covered by a set of periodic financial statements is referred to as the:\t\u00a0\t \ufffd \ufffd \ufffd \ufffd \ufffd \ufffd \ufffd \u00a0Fiscal cycle\t\u00a0\t \ufffd \ufffd \ufffd \ufffd \ufffd \ufffd \ufffd \u00a0Natural business year\t\u00a0\t \ufffd \ufffd \ufffd \ufffd\u00a0\u00a0\u00a0 \ufffd \ufffd\u00a0 \u00a0Accounting period\t\u00a0\t \ufffd \ufffd \ufffd \ufffd \ufffd \ufffd \ufffd \u00a0Business cycle\t\u00a0\t \ufffd \ufffd \ufffd \ufffd \ufffd \ufffd \ufffd \u00a0Operating cycle\t\u00a0\t\u00a0\tQuestion 15.\u00a0\u00a0\u00a0 Question : \ufffd\u00a0\u00a0 On April 30, 2011, a three-year insurance policy was purchased for $18,000 with coverage to begin immediately. What is the amount of insurance expense that would appear on the company’s income statement for the year ended December 31, 2011?\t\u00a0\t \ufffd \ufffd \ufffd \ufffd \ufffd \ufffd \ufffd \u00a0$500\t\u00a0\t \ufffd \ufffd \ufffd \ufffd\u00a0\u00a0\u00a0 \ufffd \ufffd\u00a0 \u00a0$4,000\t\u00a0\t \ufffd \ufffd \ufffd \ufffd \ufffd \ufffd \ufffd \u00a0$6,000\t\u00a0\t \ufffd \ufffd \ufffd \ufffd\u00a0\u00a0\u00a0 \ufffd \ufffd\u00a0 \u00a0$14,000\t\u00a0\t \ufffd \ufffd \ufffd \ufffd \ufffd \ufffd \ufffd \u00a0$18,000\t\u00a0\t\u00a0\tQuestion 16.\u00a0\u00a0\u00a0 Question : \ufffd\u00a0\u00a0 Based on the following information, what would be the beginning balance in the Retained Earnings Account, assuming all accounts have a normal balance?\tCash\u00a0\u00a0\u00a0 $ 6,754 \ufffd \ufffd\u00a0 Dividends \ufffd\u00a0 $ 2,000\tAccounts receivable\u00a0\u00a0\u00a0 $ 13,733 \ufffd\u00a0\u00a0\u00a0\u00a0 Consulting fees earned \ufffd\u00a0\u00a0\u00a0\u00a0 $ 13,718\tOffice supplies \ufffd \ufffd $ 2,625 \ufffd \ufffd\u00a0 Rent expense\u00a0\u00a0 $ 3,673\tLand\u00a0\u00a0\u00a0 $ 37,153 \ufffd\u00a0\u00a0\u00a0\u00a0 Salaries expense \ufffd\u00a0\u00a0\u00a0\u00a0 $ 6,642\tOffice equipment \ufffd\u00a0\u00a0 $ 14,535 \ufffd\u00a0\u00a0\u00a0\u00a0 Telephone expense \u00a0\u00a0\u00a0\u00a0 $ 560\tAccounts payable \ufffd\u00a0\u00a0 $ 6,463 \ufffd \ufffd\u00a0 Miscellaneous expense \ufffd \ufffd\u00a0 $ 280\tCommon stock \ufffd \ufffd $ 54,490 \ufffd\u00a0\u00a0\u00a0\u00a0 Retained Earnings \ufffd ?\t\u00a0\tQuestion 17.\u00a0\u00a0\u00a0 Question : \ufffd\u00a0\u00a0 Which of the following statements is incorrect?\t\u00a0\t \ufffd \ufffd \ufffd \ufffd \ufffd \ufffd \ufffd \u00a0An income statement reports revenues earned less expenses incurred\t \ufffd \ufffd \ufffd \ufffd\u00a0\u00a0\u00a0 \ufffd \ufffd\u00a0 \u00a0An unadjusted trial balance shows the account balances after they have been revised to reflect the effects of end-of-period adjustments\t \ufffd \ufffd \ufffd \ufffd \ufffd \ufffd \ufffd \u00a0Interim financial reports can be based on one-month or three-month accounting periods\t \ufffd \ufffd \ufffd \ufffd \ufffd \ufffd \ufffd \u00a0Property, plant and equipment are referred to as plant assets\t\u00a0\t\u00a0\tQuestion 18.\u00a0\u00a0\u00a0 Question : \ufffd\u00a0\u00a0 On January 1, Able Company purchased equipment costing $135,000 with an estimated salvage value of $10,500, and an estimated useful life of five years. What is the amount that should be recorded as depreciation on December 31?\t\u00a0\t \ufffd \ufffd\u00a0\tQuestion 19.\u00a0\u00a0\u00a0 Question : \ufffd\u00a0\u00a0 A classified balance sheet:\t\u00a0\t \ufffd \ufffd \ufffd \ufffd \ufffd \ufffd \ufffd \u00a0Measures a company’s ability to pay its bills on time\t\u00a0\t \ufffd \ufffd \ufffd \ufffd\u00a0\u00a0\u00a0 \ufffd \ufffd\u00a0 \u00a0Organizes assets and liabilities into important subgroups\t\u00a0\t \ufffd \ufffd \ufffd \ufffd \ufffd \ufffd \ufffd \u00a0Presents revenues, expenses and net income\t\u00a0\t \ufffd \ufffd \ufffd \ufffd \ufffd \ufffd \ufffd \u00a0Reports operating, investing and financing activities\t\u00a0\t \ufffd \ufffd \ufffd \ufffd \ufffd \ufffd \ufffd \u00a0Reports the effect of profit and dividends on retained earnings\t\u00a0\t\u00a0\tQuestion 20.\u00a0\u00a0\u00a0 Question : \ufffd\u00a0\u00a0 The special account used only in the closing process to temporarily hold the amounts of revenues and expenses before the net difference is added to (or subtracted from) the retained earnings account is the:\t\u00a0\t \ufffd \ufffd \ufffd \ufffd\u00a0\u00a0\u00a0 \ufffd \ufffd\u00a0 \u00a0Income Summary account\t\u00a0\t \ufffd \ufffd \ufffd \ufffd\u00a0\u00a0\u00a0 \ufffd \ufffd\u00a0 \u00a0Closing account\t\u00a0\t \ufffd \ufffd \ufffd \ufffd \ufffd \ufffd \ufffd \u00a0Balance column account\t\u00a0\t \ufffd \ufffd \ufffd \ufffd \ufffd \ufffd \ufffd \u00a0Contra account\t\u00a0\tQuestion 21.\u00a0\u00a0\u00a0 Question : \ufffd\u00a0\u00a0 The difference between the cost of an asset and the accumulated depreciation for that asset is called\t\u00a0\t \ufffd \ufffd \ufffd \ufffd \ufffd \ufffd \ufffd \u00a0Depreciation Expense\t\u00a0\t \ufffd \ufffd \ufffd \ufffd \ufffd \ufffd \ufffd \u00a0Unearned Depreciation\t\u00a0\t \ufffd \ufffd \ufffd \ufffd \ufffd \ufffd \ufffd \u00a0Prepaid Depreciation\t\u00a0\t \ufffd \ufffd \ufffd \ufffd \ufffd \ufffd \ufffd \u00a0Depreciation Value\t\u00a0\t \ufffd \ufffd \ufffd \ufffd\u00a0\u00a0\u00a0 \ufffd \ufffd\u00a0 \u00a0Book Value\t\u00a0\t\u00a0\tQuestion 22.\u00a0\u00a0\u00a0 Question : \ufffd\u00a0\u00a0 Based on the following information, determine the current assets, assuming all accounts have a normal balance?\tCash\u00a0\u00a0\u00a0 $ 6,754 \ufffd \ufffd\u00a0 Dividends \ufffd\u00a0 $ 2,000\tAccounts receivable\u00a0\u00a0\u00a0 $ 13,733 \ufffd\u00a0\u00a0\u00a0\u00a0 Consulting fees earned \ufffd\u00a0\u00a0\u00a0\u00a0 $ 13,718\tOffice supplies \ufffd \ufffd $ 2,625 \ufffd \ufffd\u00a0 Rent expense\u00a0\u00a0 $ 3,673\tLand\u00a0\u00a0\u00a0 $ 37,153 \ufffd\u00a0\u00a0\u00a0\u00a0 Salaries expense \ufffd\u00a0\u00a0\u00a0\u00a0 $ 6,642\tOffice equipment \ufffd\u00a0\u00a0 $ 14,535 \ufffd\u00a0\u00a0\u00a0\u00a0 Telephone expense \u00a0\u00a0\u00a0\u00a0 $ 560\tAccounts payable \ufffd\u00a0\u00a0 $ 6,463 \ufffd \ufffd\u00a0 Miscellaneous expense \ufffd \ufffd\u00a0 $ 280\tCommon stock \ufffd \ufffd $ 54,490 \ufffd\u00a0\u00a0\u00a0\u00a0 Retained Earnings \ufffd ?\t\u00a0\t\u00a0\t\u00a0\tQuestion 23.\u00a0\u00a0\u00a0 Question : \ufffd\u00a0\u00a0 On June 30, 2011, Apricot Co. paid $5,000 cash for management services to be performed over a two-year period. Apricot follows a policy of recording all prepaid expenses to asset accounts at the time of cash payment.\tThe adjusting entry on December 31, 2011 for Apricot would include:\t\u00a0\t \ufffd \ufffd \ufffd \ufffd\u00a0\u00a0\u00a0 \ufffd \ufffd\u00a0 \u00a0A debit to an expense for $1,250\t\u00a0\t \ufffd \ufffd \ufffd \ufffd\u00a0\u00a0\u00a0 \ufffd \ufffd\u00a0 \u00a0A debit to a prepaid expense for $1,250\t\u00a0\t \ufffd \ufffd \ufffd \ufffd \ufffd \ufffd \ufffd \u00a0A credit to an expense for $3,750\t\u00a0\t \ufffd \ufffd \ufffd \ufffd \ufffd \ufffd \ufffd \u00a0A debit to a prepaid expense for $3,750\t\u00a0\t \ufffd \ufffd \ufffd \ufffd \ufffd \ufffd \ufffd \u00a0A credit to a liability for $1,250\t\u00a0\t\u00a0\tQuestion 24.\u00a0\u00a0\u00a0 Question : \ufffd\u00a0\u00a0 On January 1 a company purchased a five-year insurance policy for $1,800 with coverage starting immediately. If the purchase was recorded in the Prepaid Insurance account and the company records adjustments only at year-end, the adjusting entry at the end of the first year is:\t\u00a0\t \ufffd \ufffd \ufffd \ufffd\u00a0\u00a0\u00a0 \ufffd \ufffd\u00a0 \u00a0Debit Prepaid Insurance, $1,800; credit Cash, $1,800\t\u00a0\t \ufffd \ufffd \ufffd \ufffd\u00a0\u00a0\u00a0 \ufffd \ufffd\u00a0 \u00a0Debit Prepaid Insurance, $1,440; credit Insurance Expense, $1,440\t \ufffd \ufffd \ufffd \ufffd \ufffd \ufffd \ufffd \u00a0Debit Prepaid Insurance, $360; credit Insurance Expense, $360\t\u00a0\t \ufffd \ufffd \ufffd \ufffd\u00a0\u00a0\u00a0 \ufffd \ufffd\u00a0 \u00a0Debit Insurance Expense, $360; credit Prepaid Insurance, $360\t\u00a0\t \ufffd \ufffd \ufffd \ufffd \ufffd \ufffd \ufffd \u00a0Debit Insurance Expense, $360; credit Prepaid Insurance, $1,440\t\u00a0\t\u00a0\tQuestion 25.\u00a0\u00a0\u00a0 Question : \ufffd\u00a0\u00a0 The adjusted trial balance contains information pertaining to:\t\u00a0\t \ufffd \ufffd \ufffd \ufffd \ufffd \ufffd \ufffd \u00a0Asset accounts only\t\u00a0\t \ufffd \ufffd \ufffd \ufffd \ufffd \ufffd \ufffd \u00a0Balance sheet accounts only\t\u00a0\t \ufffd \ufffd \ufffd \ufffd \ufffd \ufffd \ufffd \u00a0Income statement accounts only\t\u00a0\t \ufffd \ufffd \ufffd \ufffd\u00a0\u00a0\u00a0 \ufffd \ufffd\u00a0 \u00a0All general ledger accounts\t\u00a0\t \ufffd \ufffd \ufffd \ufffd \ufffd \ufffd \ufffd \u00a0Revenue accounts only<\/p>\n","protected":false},"excerpt":{"rendered":"
GB 518 Quiz 2 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 GB518 Financial Accounting Principles and Analysis \u00a0 1. \ufffd\u00a0\u00a0\u00a0 Question : \ufffd\u00a0\u00a0 Financial statements are typically prepared in the following order: \u00a0 \ufffd \ufffd \ufffd \ufffd \ufffd \ufffd \ufffd \u00a0Balance sheet, Read More …<\/a><\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[],"tags":[],"class_list":["post-217241","post","type-post","status-publish","format-standard","hentry"],"_links":{"self":[{"href":"https:\/\/www.benedictsol.com\/blogs\/wp-json\/wp\/v2\/posts\/217241","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.benedictsol.com\/blogs\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.benedictsol.com\/blogs\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.benedictsol.com\/blogs\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.benedictsol.com\/blogs\/wp-json\/wp\/v2\/comments?post=217241"}],"version-history":[{"count":0,"href":"https:\/\/www.benedictsol.com\/blogs\/wp-json\/wp\/v2\/posts\/217241\/revisions"}],"wp:attachment":[{"href":"https:\/\/www.benedictsol.com\/blogs\/wp-json\/wp\/v2\/media?parent=217241"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.benedictsol.com\/blogs\/wp-json\/wp\/v2\/categories?post=217241"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.benedictsol.com\/blogs\/wp-json\/wp\/v2\/tags?post=217241"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}