Question 1

On January 1,2013,NWK,Inc.'s assets were $300,000 and its stockholders' equity was $140,000.During the year,assets increased $15,000 and liabilities decreased $10,000.What was the stockholders' equity on December 31,2010?

Accepted Answer

The answer of On January 1,2013,NWK,Inc.'s assets were $300,000 and...

Question 2

A transaction is an exchange or event that directly affects the assets,liabilities,or stockholders' equity of a company.

Accepted Answer

A) True 
 B)False

Question 3

Which of the following statements regarding debits and credits is always true?

Accepted Answer

A)  Debits decrease accounts while credits increase them.
B)  The total value of all debits recorded in the ledger must equal the total value of all credits recorded in the ledger.
C)  The total value of all debits to a particular account must equal the total value of all credits to that account.
D)  A debit balance of $500 in the cash account means that cash receipts exceeded cash payments by $500.E) C) and D)
F) A) and B)

Question 4

Stockholders' equity in a corporation consists of:

Accepted Answer

A)  long-term assets.
B)  current assets plus long-term assets.
C)  assets plus liabilities.
D)  contributed capital plus retained earnings.E) All of the above
F) A) and D)

Question 5

A credit would make which of the following accounts decrease?

Accepted Answer

A)  Contributed Capital
B)  Inventories
C)  Notes Payable
D)  Retained EarningsE) A) and B)
F) A) and C)

Question 6

If a company receives $20,000 cash on accounts receivable and uses the cash to pay $20,000 on accounts payable then:

Accepted Answer

A)  assets would increase by $20,000 while liabilities would decrease by $20,000.
B)  liabilities would decrease by $20,000 while stockholders' equity would increase by $20,000.
C)  assets would decrease by $20,000 while liabilities would decrease by $20,000.
D)  liabilities would decrease by $20,000 while stockholders' equity would decrease by $20,000.E) B) and C)
F) A) and B)

Question 7

Which of the following is not an asset?

Accepted Answer

A)  Cash
B)  Notes receivable
C)  Contributed capital
D)  LandE) B) and D)
F) A) and B)

Question 8

Which of the following sequences indicates the correct order of steps in the accounting cycle?

Accepted Answer

A)  T-accounts,journal entries,trial balance,financial statements.
B)  T-accounts,journal entries,financial statements,trial balance.
C)  Journal entries,T-accounts,trial balance,financial statements.
D)  Journal entries,T-accounts,financial statements,trial balance.E) None of the above
F) A) and C)

Question 9

A company purchased land costing $27,000 by making a 25 percent cash down payment and signing a 90-day note for the balance.The entry to record this transaction would

Accepted Answer

A)  Increase total assets.
B)  Decrease total liabilities.
C)  Decrease contributed capital.
D)  Increase retained earnings.E) All of the above
F) A) and C)

Question 10

Purrfect Pets,Inc. ,makes a $10,000 payment on account.This would result in a:

Accepted Answer

A)  $10,000 credit to Cash and a $10,000 credit to Accounts Payable.
B)  $10,000 debit to Cash and a $10,000 debit to Accounts Payable.
C)  $10,000 debit to Accounts Payable and a $10,000 credit to Cash.
D)  $10,000 debit to Cash and a $10,000 credit to Accounts Payable.E) A) and C)
F) A) and B)

Question 11

Account titles in the chart of accounts are:

Accepted Answer

A)  general purpose and do not indicate the nature of the account.
B)  consistent with those used by other companies.
C)  linked to account numbers.
D)  the names mandated for use by the FASB.E) C) and D)
F) None of the above

Question 12

If a purchase of supplies for $400 was mistakenly recorded as a credit to Supplies,but the cash paid for the supplies was correctly recorded,what would be the effect on the accounting equation?

Accepted Answer

Assets would be $800...

Question 13

What is the minimum number of accounts that must be involved in any transaction?

Accepted Answer

A)  One
B)  Two
C)  Three
D)  There is no minimum.E) A) and B)
F) None of the above

Question 14

A company receives $100,000 cash from investors in exchange for stock.Several weeks later,the company buys a $250,000 machine using all of the cash from the stock issue and signing a promissory note for the remainder.The accounts involved in these two transactions are:

Accepted Answer

A)  Cash;Equipment;Long-term Investments;and Accounts Payable.
B)  Cash;Long-term Investments;Contributed Capital;and Notes Payable.
C)  Cash;Equipment;Contributed Capital;and Notes Payable.
D)  Equipment;Notes Payable;and Retained Earnings.E) A) and B)
F) A) and C)

Question 15

Which of the following would a company be most likely to overstate if the company was trying to mislead potential external investors or creditors?

Accepted Answer

A)  Accounts Receivable
B)  Notes Payable
C)  Salaries Expense
D)  Accounts PayableE) A) and B)
F) None of the above

Question 16

What is the amount of Total Liabilities on the Balance Sheet?

Accepted Answer

A)  $240,116
B)  $37,308
C)  $35,599
D)  $20,916E) B) and C)
F) A) and B)

Question 17

Which of the following is not an example of an asset?

Accepted Answer

A)  Notes receivable
B)  Supplies
C)  Prepaid expenses
D)  Retained EarningsE) All of the above
F) A) and C)

Question 18

The current ratio can be used to evaluate a company's ability to pay liabilities in the short term,and in general,a lower ratio means better ability to pay.

Accepted Answer

A) True 
 B)False

Question 19

According to the principle of conservatism,when faced with uncertainty about the value of an item,a company should use the measure that avoids:

Accepted Answer

A)  overstating assets and liabilities.
B)  overstating assets and understating liabilities.
C)  understating assets and overstating liabilities.
D)  understating assets and liabilities.E) None of the above
F) A) and C)

Question 20

On March 3,2013,your company pays $4,000 to acquire supplies.Should this be a recognized accounting transaction? If so,what accounts are affected and by how much each?

Accepted Answer

It should be a recognized tran...

Exam 2: The Balance Sheet

Stockholders' equity in a corporation consists of:

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The current ratio can be used to evaluate a company's ability to pay liabilities in the short term,and in general,a lower ratio means better ability to pay.

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Which of the following sequences indicates the correct order of steps in the accounting cycle?

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On January 1,2013,NWK,Inc.'s assets were $300,000 and its stockholders' equity was $140,000.During the year,assets increased $15,000 and liabilities decreased $10,000.What was the stockholders' equity on December 31,2010?

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What is the amount of Total Liabilities on the Balance Sheet?

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Purrfect Pets,Inc. ,makes a $10,000 payment on account.This would result in a:

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Which of the following is not an asset?

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Which of the following is not an example of an asset?

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If a purchase of supplies for $400 was mistakenly recorded as a credit to Supplies,but the cash paid for the supplies was correctly recorded,what would be the effect on the accounting equation?

Correct AnswerverifiedAssets would be $800...View AnswerShow Answer

On March 3,2013,your company pays $4,000 to acquire supplies.Should this be a recognized accounting transaction? If so,what accounts are affected and by how much each?

Correct AnswerverifiedIt should be a recognized tran...View AnswerShow Answer

Which of the following statements regarding debits and credits is always true?

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If a company receives $20,000 cash on accounts receivable and uses the cash to pay $20,000 on accounts payable then:

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A company purchased land costing $27,000 by making a 25 percent cash down payment and signing a 90-day note for the balance.The entry to record this transaction would

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Account titles in the chart of accounts are:

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What is the minimum number of accounts that must be involved in any transaction?

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According to the principle of conservatism,when faced with uncertainty about the value of an item,a company should use the measure that avoids:

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A credit would make which of the following accounts decrease?

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A transaction is an exchange or event that directly affects the assets,liabilities,or stockholders' equity of a company.

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Which of the following would a company be most likely to overstate if the company was trying to mislead potential external investors or creditors?

Correct AnswerverifiedShow Answer

A company receives $100,000 cash from investors in exchange for stock.Several weeks later,the company buys a $250,000 machine using all of the cash from the stock issue and signing a promissory note for the remainder.The accounts involved in these two transactions are:

Correct AnswerverifiedShow Answer

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Assets would be $800...
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It should be a recognized tran...
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