You are the bookkeeper for a new partnership that operates a car wash. The business has two equal partners, Mr Parker and Ms Patel. Each partner contributed $100,000 to start the business. The business also took out a Note Payable from the bank for $100,000. Read each statement below and identify which statements are true. More than one answer may be selected.

• Cash should be debited for $300,000.

• Notes Payable should be credited for$100,000.

• Contribution-Parker & Contribution-Patel should each be credited $100,000.

• Equity is the partners' paid in capital plus the value of the Note Payable.

You attempt to reconcile a company's bank accounts. There is a difference of $81.00 between the bank statements ending balance and the book balance. You cannot locate an $81.00 transaction. You need to complete the reconciliation. What should you do first?

• Because the difference is a multiple of 9, look for transcription errors.

• Create a Journal Entry against Retained Earnings to force the bank balance to match and generate a difference of zero during the reconciliation process.

• Leave the reconciliation process for this period and hope that it will work for the next period

• Restart the reconciliation process from the beginning.

Select the accounts that appear on an Income Statement. More than one answer may be selected.

• Accounts Payable

• Cash

• Cost of Goods Sold

• Rent Expense

Select the accounts that appear on a Balance Sheet. More than one answer may be selected.

• Accounts Payable

• Cash

• Cost of Goods Sold

• Rent Expense

You are a bookkeeper for a wholesale company that uses the FIFO inventory valuation method. The company makes the widget purchases shown in the chart. In June, the company sells 400 widgets at $200 per unit.

• $100 Per Unit

• $110 Per Unit

• $113.33 Per Unit

• $120 Per Unit

Which Accounting Equation is correct?

• Assets+Equity=Liabilities

• Assets+Liabilities =Equity

• Assets=Equity-Liabilities

• Assets =Liabilities+Equity

Read each statement about the advantages of software-based double-entry bookkeeping systems. Select only the statements that are TRUE! More than one answer may be selected.

• The software will prevent all fraud.

• The software should prevent arithmetic errors.

• The software should allow transactions to be saved only if the debit and credit entries are equal.

Which TWO accounts should be reconciled monthly? More than one answer may be selected.

• Sales Revenue

• Income Tax Expense

• Credit Cards Payable

• Petty Cash

Which of the following are characteristics of the Cash Basis of Accounting? More than one answer may be selected.

• Record expenses when paid

• Record expenses when incurred.

• Record revenue when earned.

• Record revenue when received.

Which of the following are characteristics of the Accrual Basis of Accounting? More than one answer may be selected.

• Record expenses when paid

• Record expenses when incurred.

• Record revenue when earned.

• Record revenue when received.