Financial Accounting Exam 1 Review

If assets increase by 20,000, which one of the following also could happen?

• Prepaid insurance increases by $20,000

• Unearned revenue decreases by $20,000

• Notes payable decreased by $20,000

• Withdrawls increase by $20,000

Which of the following is NOT part of the fraud triangle?

• Opportunity

• Nature

• Rationalization

• Pressure

What is the set of financial accounting standards used in the US called?

• Generally Accepted Accounting Principals

• Generally Accepted Accounting Policies

• American Financial Accounting Standards

• International Financial Accounting Standards

The business entity assumption is where

• each business keeps its own books

• a business owner can not mix business and personal expenses on the same books

• both a and b

• neither a nor b

What is the return on assets given the following:

Net Income is $100,000

Beginning Assets are $30,000

Ending Assets are $10,000

Average Assets are $20,000

• 3.3

• 5

• 10

• 4

ABC Company is renting part of their facility to XYZ Company for $5000 a month beginning in November 2023. XYZ will not pay the first three months of rent until February 1, 2024. If an adjusting journal entry is not paid which of the following can NOT be true:

• assets are $10,000 too high

• equity is $10,000 too low

• net income is $10,000 too low

• assets are $10,000 too low

Which of the following accounts has a debit balance

• Contributions

• Unearned Revenue

• Service Revenue

• Accounts Receivable

Which of the following is increased with a credit?

• Accounts Receivable

• Accumulated Depreciation

• Depreciation Expense

• Withdrawls

What is the journal entry for the following:

Christian Co. sold $15,000 in shoes on credit to Posh Co. with the

agreement to be paid the following month.

• Dr. Sales Revenue 15,000

  Cr. Accounts Payable 15,000

• Dr Cash 15,000

  Cr Account Receivable 15000

• Dr Account Receivable 15000

  Cr. Sales Revenue 15,000

• Dr Cash 15,000

  Cr Sales Revenue

Which of the following could be a journal entry that increases equity for the Walt Disney Company?

• Dr W. Disney Withdrawls

  Cr Cash

• Db Cash

  Cr Service Revenue

• Db Salaries Expense

  Cr Salaries Payable

• Db Equipment

  Cr Cash