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ECONOMIC XII

Total questions: 40

Worksheet time: 1hrs 10mins

Name
Class
Date
1.
Entries made at the end of the accounting period to correct and update the record of business transactions are called....
a)
Rectifying entries
b)
Closing entries
c)
Reversing entries
d)
Adjusting entries
e)
Book entries
2.
Adjusting entries are made….
a)
At the beginning of the year
b)
At the end of the year
c)
During the year
d)
At the middle of the year
e)
All of these
3.
Expenses against which goods or services have been received but payment has not been made are called….
a)
Prepaid expenses
b)
Deferred expenses
c)
Outstanding expenses
d)
Advance expenses
e)
General Ledger
4.
Adjusting entries are made to ensure that:
a)
Expenses are recognized in the period in which they are incurred
b)
Revenues are recorded in the period in which they are earned
c)
Statement of financial position and income statement accounts have correct balances at the end of an accounting period
d)
All statements are not recognized
e)
All of the above
5.
Each of the following is a major type (or category) of adjusting entries excepts:
a)
Prepaid expenses
b)
Accrued revenues
c)
Accrued expenses
d)
Earned revenues
e)
cashflow
6.

The trial balance shows Supplies $1,350 and Supplies Expense $0. If $600 of supplies are on hand at the end of the period, the adjusting entry is:

a)

Supplies $600

Supplies Expense $600

b)

Supplies $750

Supplies Expense $750

c)

Supplies Expense $750

Supplies $750

d)

Supplies Expense $600

Supplies $600

e)

Cash $750

Supplies $750

7.
Adjustments for prepaid expenses:
a)
Decrease assets and increase revenues
b)
Decrease expenses and increase assets
c)
Decrease assets and increase expenses
d)
Decrease revenues and increase assets
e)
Increase revenues and increase liabilities
8.
The Harris Company purchased equipment for $15,000 on December 1. It is estimated that annual depreciation on the computer will be $3,000. If financial statements are to be prepared on December 31, the company should make the following adjusting entry….
a)
debit Depreciation Expense, $3,000; credit Accumulated Depreciation, $3,000
b)
debit Depreciation Expense, $250; credit Accumulated Depreciation, $250
c)
debit Depreciation Expense, $12,000; credit Accumulated Depreciation, $12,000
d)
debit Equipment, $15,000; credit Accumulated Depreciation, $15,000
e)
debit Equipment, $10,000; credit Accumulated Depreciation, $10,000
9.

Before posting a payment of $5,000, the Account Payable of Senator Company had a normal balance of $16,000. The balance after posting this transaction was….

a)

$21,000

b)

$5,000

c)

$11,000

d)

$4,000

e)

Cannot be determined

10.
The purchase of supplies on account should result in….
a)
A debit to Supplies Expense and a credit to Cash
b)
A debit to Supplies Expense and a credit to Accounts Payable
c)
A debit to Supplies and a credit to Accounts Payable
d)
A debit to Supplies and a credit to Accounts Receivable
e)
A debit to Cash and a credit to Expense
11.
The cost of goods sold on credit is $1,000 less 20% discount. The entries in the Ledger would be to…
a)
Debit debtor’s account $1,000 and credit Sales Account $1,000
b)
Debit debtor’s account $800, Discount Allowed Account $200 and Sales Account $1,000
c)
Debit debtor’s account $1,000, Discount Allowed Account $200 and Sales Account $800
d)
Debit debtor’s account $800 and credit Sales Account $800
e)
Credit debtor’s account $800 and Debit Sales Account $800
12.
A debit note is used as a source document for which of the following transactions?
a)
Drawings by the owner
b)
Bad debts written off
c)
Goods returned by the customer
d)
Undercharging of a customer
e)
Sales are made
13.
The Ledger is the principal account book for recording transactions in accounting. The information recorded in the Ledger is taken from the books of original entry such as EXCEPT ….
a)
General Journal
b)
Sales journal
c)
Purchases journal
d)
Invoice
e)
Petty cash book
14.
Accounts that normally have credit balances are the …
a)
Revenue, asset and drawings
b)
Expense, capital and liability
c)
Revenue, liability and owner’s equity
d)
Revenue, liability and expense
e)
All correct
15.
The amount of an asset account…
a)
Increases when a credit entry is made
b)
Increases when a debit entry is made
c)
Normally has a credit balance
d)
Decreases when a debit entry is made
e)
Doesn’t have balance
16.
You received a letter from Ryanna Company informing you that it wishes to buy $20,000 worth of goods from you over the next two months. You should…
a)
Debit the account for Ryanna Company and credit Sales Account
b)
Debit Sales Account and credit the account for Ryanna Company
c)
Debit Bank Account and credit Sales Account
d)
Not record this in the books
e)
Credit Expense and Debit Account Payable
17.
The amount of an asset account ….
a)
Increases when a credit entry is made
b)
Increases when a debit entry is made
c)
Normally has a credit balance
d)
Decreases when a debit entry is made
e)
None of the above
18.
Which of the following items does NOT appear in the Trial Balance?
a)
Opening stock
b)
Capital at the beginning
c)
Drawings
d)
Closing stock
e)
Sales
19.
Which of the following is shown on the DEBIT side of the Trial Balance?
a)
Discount received
b)
Mortgage on premises
c)
Carriage outwards
d)
Bank overdraft
e)
Journal
20.
Which of the following is incorrectly classified?
a)
Stock – Current Asset
b)
Bank overdraft – Current liabilitiy
c)
Mortgage – Fixed asset
d)
Creditors – Current liability
e)
Sales – expense
21.
Revenue not yet recognized; collected in advance
a)
Prepaid Expenses
b)
Unearned Revenue
c)
Accrued Revenues
d)
Accrued Expenses
e)
Equity
22.
Office supplies on hand that will be used in the next period
a)
Prepaid Expenses
b)
Unearned Revenue
c)
Accrued Revenues
d)
Accrued Expenses
e)
Equity
23.
Subscription revenue collected; not yet recognized
a)
Prepaid Expenses
b)
Unearned Revenue
c)
Accrued Revenues
d)
Accrued Expenses
e)
Equity
24.
Rent not yet collected; already recognized
a)
Prepaid Expenses
b)
Unearned Revenue
c)
Accrued Revenues
d)
Accrued Expenses
e)
Equity
25.
An expense incurred; not yet paid or recorded
a)
Prepaid Expenses
b)
Unearned Revenue
c)
Accrued Revenues
d)
Accrued Expenses
e)
Equity
26.
A revenue recognized; not yet collected or recorded
a)
Prepaid Expenses
b)
Unearned Revenue
c)
Accrued Revenues
d)
Accrued Expenses
e)
Equity
27.
An expense not yet incurred; paid in advance
a)
Prepaid Expenses
b)
Unearned Revenue
c)
Accrued Revenues
d)
Accrued Expenses
e)
Equity
28.
Interest expense incurred; not yet paid
a)
Prepaid Expenses
b)
Unearned Revenue
c)
Accrued Revenues
d)
Accrued Expenses
e)
Equity
29.

Rent not yet collected; already recognized

a)

Prepaid Expenses

b)

Unearned Revenue

c)

Accrued Revenues

d)

Accrued Expenses

e)

Equity

30.
Revenue earned will increase owner’s….
a)
Prepaid Expenses
b)
Unearned Revenue
c)
Accrued Revenues
d)
Accrued Expenses
e)
Equity
31.

One of the reason bad debts are written off is because the debtors could be……

a)

alive

b)

bankrupt

c)

open new business

d)

nothing happened

32.

As a bad debt is treated as a loss to the business, it is transferred to the ………….. side of the Profit and Loss Account.

a)

debit

b)

credit

c)

trial balance

d)

balance sheet

33.

In some situations, debtors may return to pay their debts or part of their debts. This is known as ……

a)

cash

b)

prepaid expense

c)

bad debts

d)

recovery of bad debt account

34.

A Trial Balance provides a summary of all the .... of the accounts in the ledger.

a)

balances

b)

debit

c)

credit

d)

no answers

35.

The withdrawal of cash or goods is known as ....

a)

cash

b)

revenue

c)

liabilities

d)

drawing

36.

The information recorded in the Ledger is transferred from the books of ……

a)

original entries

b)

source documents

c)

invoice

d)

debit note

37.

One example of source documents that provide information on financial transactions is..........

a)

receipt

b)

invoice

c)

journal

d)

receipt and invoice

38.

“For each transaction, two entries are being posted to two accounts. One account is debited while another is credited.” This statement refers to the term..............

a)

double entry system

b)

debit

c)

credit

d)

journal

39.

A ............... is a list of balances of accounts in the ledger prepared to prove the equality of debits and credits.

a)

trial balance

b)

balance sheet

c)

profit and loss

d)

journal

40.

The “Liabilities” type of account decreasing on ............. side

a)

debit

b)

balance sheet

c)

trial balance

d)

credit

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