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 increases 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

If equity increases by $10,000 which of the following can NOT be true:

• cash increases by $10,000

• liabilities decrease by $10,000

• net income was $10,000 with no contributions or distributions

• net income was a net loss of $10,000 with no contributions or distributions

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