WorksheetsExam 1 Review
Total questions: 25
Worksheet time: 25mins
What journal entry is required when a company issues common stock in exchange for cash?
Debit Cash
Credit Common Stock
Debit Dividends
Credit Cash
Debit Dividends Payable
Credit Dividends
Debit Common Stock
Credit Cash
At the end of the current period, Jackson Jams reports dividends of $500, expenses of $8,000, and net income of $2,000. What is Jackson's revenue?
$10,000
$10,500
$9,500
$7,500
Hope College purchases equipment to assist with constructing a new business building. How would Hope classify this transaction in a statement of cash flows?
Investing
Operating
Financing
Marketing
Rodgers Renovation purchases supplies for cash that will be used over the next few weeks. What will be the effects on the accounting equation if Rodgers DOES NOT make the adjusting entry for supplies used?
Assets will be overstated and stockholders' equity will be overstated
Assets will be understated and stockholders' equity will be understated
Assets will be overstated and liabilities will be overstated
Liabilities will be overstated and stockholders' equity will be understated
What journal entry is required when a company completes services and receives cash?
Debit Cash
Credit Revenue
Debit Accounts Receivable
Credit Revenue
Debit Cash
Credit Deferred Revenue
Debit Deferred Revenue
Credit Revenue
Templeton Technology receives a bank statement that includes a service fee of $15. This reconciling item would require a(n)
decrease to the company's cash balance
increase to the company's cash balance
decrease to the bank's cash balance
increase to the bank's cash balance
Which of the following reconciling items would require an adjusting journal entry to cash?
EFTs
Deposits outstanding
Checks outstanding
Bank errors
To prevent improper use of a company's resources, only certain employees are allowed to carry out certain business activities. This is an example of
proper authorization.
physical controls.
performance reviews.
separation of duties.
Deferred revenue appears on the
balance sheet
income statement
statement of cash flows
statement of stockholders' equity
During the first month of operations, Choy Corp pays $500 cash for a TV commercial that airs during the month. What journal entry should Choy make to record this transaction?
Debit Advertising Expense $500
Credit Cash $500
Debit Advertising Expense $500
Credit Accounts Payable $500
Debit Accounts Payable $500
Credit Cash $500
Debit Cash $500
Credit Accounts Receivable $500
Which financial statement reports revenues and expense over an interval of time?
Income Statement
Balance Sheet
Statement of Cash Flows
Statement of Stockholders' Equity
Which of the following statements is NOT true of the Sarbanes-Oxley Act of 2002?
All companies in the U.S. fall under its provisions.
It helped establish guidelines for internal control procedures.
It helped establish guidelines for auditor-client relations.
It helped establish corporate executive accountability.
A company purchases supplies on account. What is the effect of this transaction on the accounting equation?
Assets increase and liabilities increase
Assets increase and stockholders' equity decreases
Liabilities increase and stockholders' equity decrease
No effect
Confirmatory value refers to information that
provides feedback on past activities.
is useful in helping to forecast future outcomes.
does not bias the decision maker.
has the ability to affect decisions.
What journal entry is required when a company pays rent in advance?
Debit Prepaid Rent
Credit Cash
Debit Rent Expense
Credit Cash
Debit Rent Expense
Credit Prepaid Rent
Debit Cash
Credit Prepaid Rent
Which of the following is reported as part of cash and cash equivalents on the balance sheet?
Inventory available for sale to customers
Investments that mature one year from now
Checks received from customers
Accounts receivable
Which of the following accounts is increased with a credit?
Revenue
Dividends
Expenses
Assets
What is the first step in the measurement process of external transactions?
Use source documents to identify accounts affected
Prepare a trial balance
Post the transaction to the general ledger
Analyze impact on the accounting equation
The standardized set of rules, conventions, and procedures that companies in the U.S. must follow when preparing and presenting financial statements are called
GAAP
FASB
PCAOB
SEC
Aqua Automotive orders $100 in repair services from Megumin Maintenance on March 28. Megumin provides repairs to Aqua on April 10. Aqua pays for the repairs the following month on May 2. If Megumin uses the accrual-basis of accounting, on which date would Megumin record the $100 revenue?
April 10
March 28
May 2
April 30
A company has assets of $15,000 and liabilities of $6,000. What is the company's total stockholders' equity?
$9,000
$21,000
$10,500
$5,250
What journal entry is required when a company purchases equipment by signing a note with the local bank?
Debit Equipment
Credit Notes Payable
Debit Equipment
Credit Cash
Debit Notes Payable
Credit Cash
Debit Depreciation Expense
Credit Accumulated Depreciation
McMullen Manufacturing received cash in April that was not deposited in the bank until May. This reconciling item would require a(n)
increase to the bank's cash balance
decrease to the bank's cash balance
increase to the company's cash balance
decrease to the company's cash balance
Which of the following accounts is increased with a debit?
Liabilities
Owners' equity
Revenue
Dividends
Your company shows a debit balance of $12,000 for prepaid rent at the start of June. $1,000 of rent expired in June. Prepare the related adjusting entry.
Debit Rent Expense 1,000
Credit Prepaid Rent 1,000
Debit Rent Expense 11,000
Credit Prepaid Rent 11,000
Debit Rent Expense 1,000
Credit Cash 1,000
Debit Rent Expense 11,000
Credit Cash 11,000
