1) Blue Company collected $2,000 cash for work completed. The effects on the accounting equation are
A. Both total assets and equity are unchanged.
B. Both total assets and total liabilities decrease.
C. Total assets increase and equity increases
D. Total assets, total liabilities, and equity are unchanged.
E. Total assets decrease and equity increases.
2) A debit entry:
A. Decreases liability and equity accounts.
B. Increases the owner’s withdrawals account.
C. Increases asset and expense accounts
D. Decreases revenue accounts
E. All of these answers are correct.
3) Assets created by providing products or services on credit are:
A. Liabilities
B. Expenses
C. Accounts receivable
D. Equity
E. Accounts payable
4) A business is making an agreement for providing future services for exchange of economic consideration between two parties is called:
A. Accounting transaction
B. Business transaction.
C. Business event.
D. Account Receivable
E. Equity transaction.
5) A payment from a business to its owner or owners is called
A. Equity
B. Dividend
C. Expense
D. Cheque
E. Withdrawal
6) An asset account “Prepaid Insurance or Prepaid Rent” was created previously and was expired or used
A. Recorded as a credit to an insurance or rent expense account.
B. Recorded as a debit to an unearned revenue account.
C. Recorded as a credit to an unearned revenue account.
D. Recorded as a debit to an insurance or rent expense account.
E. Not recorded in the accounting records.
7) Revenue is recognized in most businesses
A. Only if the transaction creates an account receivable.
B. When services have been performed and the business obtains the right to collect sales price.
C. Only if paid in cash.
D. When cash from a sale is received
E. When the customer’s order is received
8) An unconditional written promise to pay a definite sum of money on demand or on a defined future date (or dates) it
A. Account payable.
B. Account receivable.
C. Prepaid expense.
D. Promissory note.
E. Unearned revenue.
9) Lenore Turner’s consulting business be affected by the billing of a client for $2,000 for consulting work completed?
A. Cash, $2,000 increase, accounts receivable, $2,000 decrease
B. Cash, $2,000 increase, sales, $2,000 increase.
C. Accounts receivable, $2,000 increase, cash, $2,000 decrease.
D. Accounts receivable, $2,000 increase, liabilities, $2,000 increase.
E. Accounts receivable, $2,000 increase, sales, $2,000 increase.
10) The following information is available for Isla Company for last May. How much is the net income for the month?
Employee Salaries $15,000
Interest paid on bank loan $2,500
Rent paid to landlord 12,500
Service Revenue 50,000
A. $0
B. $30,000
C. $10,000
D. $35,000
11) The assets of a business total $20,000; the liabilities, $8,000. The claims of the owners are:
A. $28,000
B. $20,000
C. $12,000
D. $0
E. $8,000
Make Journal entries for the below transactions:
12) Business paid 2-year insurance for $3,600. Please show which of the following entries is right
A. Dr. Insurance 3,600; Cr. Cash 3,600
B. Dr. Prepaid Insurance 3,600; Cr. Cash 3,600
C. Dr. Insurance Expense 3,600; Cr. Cash 3,600
D. Dr. Insurance Premium 3,600; Cr. Cash 3,600
13) Business ordered one $6,000 equipment for next month, the money will be paid in next month when the equipment arrives. Please show which of the following entries is right?
A. Dr. Office Equipment 6,000; Cr. Accounts Payable 6,000
B. no entry
C. Dr. Office Supplies 6,000; Cr. Accounts Payable 6,000
D. Dr. Office Equipment 6,000; Cr. Notes Payable 6,000
14) At end of the month, business received a telephone bill for $400, paid in cash. Please show which of the following entries is right.
A. Dr. Telephone Service 400; Cr. Cash 400
B. Dr. Telephone 400: Cr. Cash 400
C. Dr. Telephone bill 400; Cr. Cash 400
D. Dr. Telephone Expense 400; Gr. Cash 400
15) Mason Smith input $25,000 cash in his business.
16) Business purchased office stationeries for $350 in cash.
17) Jun1 Paid the annual $2,500 premium in advance on a one-year insurance policy.
18) Jun1 Business owner input a $10, 100 personal cash into the business bank account.
19) Jun2 Purchased office stationeries and printing paper for $1,300 on credit from Staple Supplies Ltd.
20) Jun8 Completed accounting services for Bank One customer and billed them $2,800.
21) Jun10 Paid $900 of the amount previous owing to Stapled Supplies Ltd.
22) Jun18 Received Payment $2,800 in full from Bank One Customer for the services that already provided and recorded on Jun8.
23) Jun24 Completed accounting work for Turner Construction and Bill them $500.
24) Jun28 Business paid business owner $1,100 from the business bank account to pay the personal expense.
25) Jun30 Received June Telephone bill in the amount of $190.
26) Jun30 Paid the June electricity bill in the amount of $350.
27) Jun30 Business paid rent on office space for the month of June in the amount of $850.
28) Jun30 Business has been covered for one month $208.33 by the previous prepaid insurance.
