Question 1

Which of the following would be classified as a long-term liability on the balance sheet at December 31, 2010?

Accepted Answer

A)   Accounts payable, 30-day account.
B)   Notes payable, due November, 2011.
C)   Notes receivable, matures April, 2012.
D)   Mortgage payable, due January, 2013.E) B) and D)
F) All of the above

Question 2

Cash had a beginning balance of $68,900. During the month, Cash was credited for $16,000 and debited for $18,300. At the end of the month, the balance is:

Accepted Answer

A)   $2,300.
B)   $71,200.
C)   $66,700.
D)   $(2,300) .E) All of the above
F) A) and B)

Question 3

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) A) and B)
F) C) and D)

Question 4

The best interpretation of the word "credit" is the

Accepted Answer

A)   offset side of an account.
B)   increase side of an account.
C)   right side of an account.
D)   decrease side of an account.E) A) and B)
F) A) and C)

Question 5

Which of the following is NOT true about liabilities?

Accepted Answer

A)   Liabilities are amounts owed by a business.
B)   Liability accounts have a normal credit balance.
C)   Financing activities will affect the amount of liabilities.
D)   Examples of liabilities include notes payable, contributed capital and income tax payable. Contributed capital is part of stockholders' equity and is not a liability.E) A) and C)
F) A) and D)

Question 6

Park & Company was recently formed with a $5,000 investment in the company by stockholders. The company then borrowed $2,000 from a local bank, purchased $1,000 of supplies on account, and also purchased $5,000 of equipment by paying $2,000 in cash and signing a promissory note for the balance. Based on these
Transactions, the company's total assets are:

Accepted Answer

A)   $7,000.
B)   $9,000.
C)   $10,000.
D)   $11,000.E) A) and D)
F) C) and D)

Question 7

The Buddy Burger Corporation owes $1.5 million to the Texas Wholesale Meat Company from whom Buddy Burger buys its burger meat. Which account would Buddy Burger use to report the amount owed?

Accepted Answer

A)   Cash.
B)   Accounts Payable.
C)   Supplies.
D)   Accounts Receivable.E) B) and C)
F) A) and D)

Question 8

What is the amount of the total assets to be reported on the balance sheet?

Accepted Answer

A)   $150,000
B)   $160,000
C)   $90,000
D)   $80,000E) A) and C)
F) A) and D)

Question 9

What is the total of the CREDIT balance accounts?

Accepted Answer

A)   $111,040
B)   $104,090
C)   $113,540
D)   $108,590E) A) and C)
F) B) and C)

Question 10

The normal balance of any account is the

Accepted Answer

A)   left side.
B)   right side.
C)   side which increases that account.
D)   side which decreases that account.E) All of the above
F) None of the above

Question 11

Which of the following statements is FALSE about the current ratio?

Accepted Answer

A)   Instead of using the dollar amounts, the current ratio makes it easier to compare several companies.
B)   The current ratio is used to evaluate a company's ability to pay current obligations.
C)   Having more current assets than current liabilities will yield a current ratio less than 1.
D)   A high current ratio suggests good liquidity.E) None of the above
F) All of the above

Question 12

The final balance of the Cash account would be:

Accepted Answer

A)   $219,300.
B)   $113,300.
C)   $28,500.
D)   $134,500.E) All of the above
F) A) and D)

Question 13

In 1999, the Denim Company bought land that cost $15,000. In 2010, a similar piece of land was bought for $28,000 and the company's existing land was estimated to be worth $18,000. On the balance sheet at the end of
2010, the land that was purchased in 1999 would be reported at:

Accepted Answer

A)   $15,000.
B)   $28,000.
C)   $18,000.
D)   the average of the three prices.E) C) and D)
F) None of the above

Question 14

Which account would be decreased by a credit?

Accepted Answer

A)   Cash
B)   Accounts payable
C)   Contributed capital
D)   Retained earningsE) B) and C)
F) A) and D)

Question 15

A long-term liability is one that the company:

Accepted Answer

A)   has owed for over one year.
B)   has owed for over five years.
C)   will not pay off for over one year.
D)   will not pay off for over five years.E) B) and C)
F) All of the above

Question 16

How many of the following statements regarding debits and credits are true?
A decrease in assets will result in a credit to an asset account.
Across all accounts, the total value of all debits must equal the total value of all credits.
The total value of all debits to a particular account must equal the total value of all credits to that account.

Accepted Answer

A)   None
B)   One
C)   Two
D)   ThreeE) A) and C)
F) A) and D)

Question 17

Your company's president donates a large amount of her own money to charity and receives significant publicity that includes the company's name. How would the benefits of this publicity appear on the balance sheet?

Accepted Answer

A)   It would appear as a current asset.
B)   It would appear as a liability.
C)   It would appear as a long-term asset.
D)   It would not appear on the balance sheet.E) A) and B)
F) None of the above

Question 18

The acquisition of equipment in an exchange for a company's stock would increase the current ratio of the company.
the accounts in this transaction is classified as current.

Accepted Answer

A) True 
 B)False

Question 19

Accounts Payable

Accepted Answer

A)   has a normal credit balance
B)   is increased by a debit
C)   is an asset
D)   is increased when a company receives cash from customers.E) A) and D)
F) All of the above

Question 20

Which of the following would cause a trial balance to be out of balance?

Accepted Answer

A)   A transaction was recorded twice.
B)   A transaction was not recorded.
C)   A transaction was posted to the wrong accounts.
D)   Only the credit of a transaction was recorded.E) A) and B)
F) A) and C)

Exam 2: Reporting Investing and Financing Results on the Balance Sheet

What is the total of the CREDIT balance accounts?

Correct Answer
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Correct Answer
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Cash had a beginning balance of $68,900. During the month, Cash was credited for $16,000 and debited for $18,300. At the end of the month, the balance is:

Correct Answer
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The final balance of the Cash account would be:

Correct Answer
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Which of the following would cause a trial balance to be out of balance?

Correct Answer
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The best interpretation of the word "credit" is the

Correct Answer
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What is the amount of the total assets to be reported on the balance sheet?

Correct Answer
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The normal balance of any account is the

Correct Answer
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Which of the following statements is FALSE about the current ratio?

Correct Answer
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Which of the following is NOT true about liabilities?

Correct Answer
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Which account would be decreased by a credit?

Correct Answer
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The Buddy Burger Corporation owes $1.5 million to the Texas Wholesale Meat Company from whom Buddy Burger buys its burger meat. Which account would Buddy Burger use to report the amount owed?

Correct Answer
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Which of the following would be classified as a long-term liability on the balance sheet at December 31, 2010?

Correct Answer
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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

Correct Answer
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The acquisition of equipment in an exchange for a company's stock would increase the current ratio of the company. the accounts in this transaction is classified as current.

Correct Answer
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Accounts Payable

Correct Answer
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A long-term liability is one that the company:

Correct Answer
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Correct Answer
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In 1999, the Denim Company bought land that cost $15,000. In 2010, a similar piece of land was bought for $28,000 and the company's existing land was estimated to be worth $18,000. On the balance sheet at the end of 2010, the land that was purchased in 1999 would be reported at:

Correct Answer
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Your company's president donates a large amount of her own money to charity and receives significant publicity that includes the company's name. How would the benefits of this publicity appear on the balance sheet?

Correct Answer
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Exam 2: Reporting Investing and Financing Results on the Balance Sheet

What is the total of the CREDIT balance accounts?

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Cash had a beginning balance of $68,900. During the month, Cash was credited for $16,000 and debited for $18,300. At the end of the month, the balance is:

Correct AnswerverifiedShow Answer

The final balance of the Cash account would be:

Correct AnswerverifiedShow Answer

Which of the following would cause a trial balance to be out of balance?

Correct AnswerverifiedShow Answer

The best interpretation of the word "credit" is the

Correct AnswerverifiedShow Answer

What is the amount of the total assets to be reported on the balance sheet?

Correct AnswerverifiedShow Answer

The normal balance of any account is the

Correct AnswerverifiedShow Answer

Which of the following statements is FALSE about the current ratio?

Correct AnswerverifiedShow Answer

Which of the following is NOT true about liabilities?

Correct AnswerverifiedShow Answer

Which account would be decreased by a credit?

Correct AnswerverifiedShow Answer

The Buddy Burger Corporation owes $1.5 million to the Texas Wholesale Meat Company from whom Buddy Burger buys its burger meat. Which account would Buddy Burger use to report the amount owed?

Correct AnswerverifiedShow Answer

Which of the following would be classified as a long-term liability on the balance sheet at December 31, 2010?

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

The acquisition of equipment in an exchange for a company's stock would increase the current ratio of the company. the accounts in this transaction is classified as current.

Correct AnswerverifiedShow Answer

Accounts Payable

Correct AnswerverifiedShow Answer

A long-term liability is one that the company:

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

In 1999, the Denim Company bought land that cost $15,000. In 2010, a similar piece of land was bought for $28,000 and the company's existing land was estimated to be worth $18,000. On the balance sheet at the end of 2010, the land that was purchased in 1999 would be reported at:

Correct AnswerverifiedShow Answer

Your company's president donates a large amount of her own money to charity and receives significant publicity that includes the company's name. How would the benefits of this publicity appear on the balance sheet?

Correct AnswerverifiedShow Answer

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