BAC1064 Quiz 1

Financial accounting provides economic and financial information for all of the following except

• creditors.

• investors.

• managers.

• other external users.

A business whose owners enjoy limited liability is a

• proprietorship.

• partnership.

• corporation.

• sole proprietorship.

If total liabilities decreased by $40,000 and owner’s equity increased by $30,000 during a period of time, then total assets must change by what amount and direction during that same period?

• $50,000 decrease

• $10,000 decrease

• $10,000 increase

• $50,000 increase

At October 1, Flambo Company reported owner’s equity of $68,000. During October, the owner made additional investments of $10,000 and the company posted a net loss of $4,000. If owner’s equity at October 31 totals $70,000, what amount of owner drawings were made during the month?

• $0

• $4,000

• $6,000

• $10,000

Able2 Company received a cash advance of $800 from a customer. As a result of this event,

• assets increased by $800.

• owner’s equity increased by $800.

• liabilities decreased by $800.

• assets and owner’s equity both increased by $800.

Qwik Company showed the following balances at the end of its first year:

Cash                                                       $  8,700

Prepaid insurance                                       9,400

Accounts receivable                                    7,000

Accounts payable                                        5,800

Notes payable                                             9,400

Owner’s Capital                                          2,300

Owner’s Drawings                                       1,400

Revenues                                                 44,000

Expenses                                                 35,000

What did Qwik Company show as total credits on its trial balance?

• $52,400

• $61,500

• $62,900

• $70,900

The first step in the recording process is to

• prepare financial statements.

• analyze each transaction for its effect on the accounts.

• post to a journal.

• prepare a trial balance.

If the sum of the debit column equals the sum of the credit column in a trial balance, it indicates

• no errors have been made.

• no errors can be discovered.

• that all accounts reflect correct balances.

• the mathematical equality of the accounting equation.

A credit sale of $3,600 is made on July 15, terms 3/10, n/30, on which a return of $100 is granted on July 18. What amount is received as payment in full on July 24?

• $3,395

• $3,492

• $3,392

• $3,600

Mantle Company’s accounting records show the following at the year ending on December 31, 2016:

 

Purchase Discounts         $    16,500

Freight - In                              22,100

Purchases                            413,000

Beginning Inventory               47,000

Ending Inventory                    57,600

Purchase Returns                  15,600

 

Using the periodic system, the cost of goods sold is

• $423,600.

• $392,400.

• $403,000.

• $413,600.