AC151_Review

Account balances are always computed as:

• Sum of debits minus sum of credits

• 1. Sum of credits minus sum of debits

• Sum of larger side minus sum of the smaller side

• 1. Sum of smaller side minus sum of the larger side

All of the following normally have debit balances except

• 1. Cash

• 1. Interest Receivable

• 1. Prepaid Expense

• 1. Accounts Payable

A company’s Assets is $45,000; Liabilities is $32,000; its Owner's Equity balance is:

• $13,000

• $77,000

• Cannot be determined

• $32,000

Compute Owner's Equity from the following:

Owners Capital - $40,000; Owners Drawings - $12,000;

Revenue - $38,000 and Expenses - $25,000

• $28,000

• $53,000

• $39,000

• $41,000

Compute Net Income when:

• Revenue - $97,000; Expenses - $76,000; Cash - $4,000

• $101,000

• 1. $21,000

• 1. $25,000

• 1. $80,000

All of the following normally have credit balances except

• 1. Sales Revenue

• 1. Fee Income

• 1. Prepaid Expense

• 1. Accumulated Depreciation

On the bank reconciliation statement, a ‘dishonored’ (NSF) check from a customer will appear as:

• 1. Increase to book balance 

• 1. Increase to bank balance

• 1. Decrease to book balance

• 1. Decrease to bank balance 

On the bank reconciliation statement, a  note collected by the bank on behalf of the business

will appear as:

• 1. Increase to book balance 

• 1. Increase to bank balance

• 1. Decrease to book balance

• 1. Decrease to bank balance 

What is the interest on a $40,000 note with a 3 month term with interest rate of 7%

• 1. $1,000

• $2,800

• 1. $700

• 1. $933

If the income summary has a debit balance of $33,000 after closing all revenues and expenses,

it means that:

• 1. Net Income is $33,000

• Net Loss is $33,000

• 1. Owners Drawings $33,000

• 1. Owners Capital is $33,000