Acct 305

Topics: Generally Accepted Accounting Principles, Income statement, Expense Pages: 12 (1105 words) Published: December 3, 2013
Name: __________________________ Date: _____________

1.
  Alpha Company's stock trades on the NY stock exchange. For Alpha Company, revenue on account amounted to $5,150. Cash collections of accounts receivable amounted to $2,300. Expenses incurred on account were $2,100. Cash paid on accounts payable was $1,950. Alpha's net income was A)

$2,900
B)
$3,050
C)
$350
D)
$200

2.
Hamilton Company began operations in 2009. During the year, the following cash transactions occurred:

1. issued stock for $40,000
2. borrowed $20,000 from bank
3. provided services to customers for $53,000 cash
4. paid back $8,000 of the loan from the bank
5. paid rent expense, $9,000
6. purchased equipment costing $15,000
7. paid operating expenses, $25,000
8. paid $4,000 dividend to stockholders

What was the company's net cash flow from operating activities? A)
$15,000
B)
$19,000
C)
$52,000
D)
($48,000)

3.
The first organization created with the purpose of establishing generally accepted accounting principles issued A)
Opinions
B)
Standards
C)
Concepts
D)
Accounting Research Bulletins

4.
Merlin Inc. has the following transactions and must make adjusting entries on Dec. 31. Which of the following is an example of an accrued revenue? A)
On September 1, the company loaned $3,000 to an officer who will repay the loan in one year at an annual interest rate of 12 percent. B)
The company owed wages to 10 employees who worked three days at $120 each per day at the end of December. The company will pay employees at the end of the first week of next month. C)
The company received a $220 utility bill for electricity usage in December to be paid next month in January. D)
Collected $900 rent for the period December 1, this year, to March 1 next year. The amount was added to Unearned Rent Revenue on December 1, this year.

5.
A company paid $2400 for a two-year insurance premium on July 1, this year. The amount was debited to Prepaid Insurance. On Dec. 31 the company made an adjusting entry. This adjusting entry was a(n) A)

accrued asset
B)
deferred asset
C)
accrued expense
D)
deferred expense

6.
A generally accepted method of valuation is:

Accounts Receivable Trading Securities Equipment Inventories at at at at Lower of Net Realizable Value Historical Cost Book Value Cost or Market

A) Yes No Yes Yes B) Yes Yes Yes No C) Yes Yes No Yes D) No Yes Yes Yes

7.
According to Statement of Financial Accounting Concepts No. 2, timeliness is an ingredient of the primary quality of

Relevance Reliability

A)
Yes Yes
B)
No Yes
C)
Yes No
D)
No No

8.
Adjusting journal entries have all of the following characteristics EXCEPT A)
they are always made at the end of a period
B)
they never touch cash
C)
they always debit an expense account
D)
they always affect an income statement account and a balance sheet account

9.
Which of the following statements is associated with the accrual basis of accounting? A)
Revenues are recognized in the period they are earned, regardless of the time period the cash is received. B)
A minimum amount of record keeping is required.
C)
This method is used less frequently by businesses than the cash method of accounting. D)
The timing of cash receipts and disbursements is emphasized

10.
Penn Company reported the following information for 2010:

Sales revenue...
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