Accounting Test 1 Review Quiz

18 Questions

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Accounting Quizzes & Trivia

As an accounting student you need to ensure that you are up to date with what you cover in class every day. Having just finished up topic four, this first quiz here helps you review all the topics and highlights what you need to polish up on. Give it a try!


Questions and Answers
  • 1. 
    On January 1, 2006 Mammoth Corporation had retained earnings of $4,000,000. During 2006, they had net income of $750,000 and dividends of $100,000. What is the amount of Mammoth's retained earnings at the end of 2006?
    • A. 

      4,000,000

    • B. 

      4,450,000

    • C. 

      4,650,000

    • D. 

      4,850,000

    • E. 

      None of the above is correct

  • 2. 
    On a balance sheet, assets are listed in the order of
    • A. 

      Date of acquisition (earliest first).

    • B. 

      Importance to the operation of the business.

    • C. 

      Ease of conversion to cash.

    • D. 

      Dollar amount (largest first).

  • 3. 
    The Beta Corporation had 2007 revenues of $200,000, expenses of $140,000, and an income tax rate of 30 percent. Net income after taxes would be
    • A. 

      60,000

    • B. 

      18,000

    • C. 

      42,000

    • D. 

      48,000

    • E. 

      None of the above are correct

  • 4. 
    Accounting is a system that collects and processes financial information about an organization and reports that information to decision makers.
    • A. 

      True

    • B. 

      False

  • 5. 
    The duality of effects means that every transaction must affect both sides of the equation.
    • A. 

      True

    • B. 

      False

  • 6. 
    Which of the following will not result in recording a transaction?
    • A. 

      Signing a contract to have an outside cleaning service clean offices nightly

    • B. 

      Paying our employees their wages

    • C. 

      Selling stock to investors

    • D. 

      Buying equipment and agreeing to pay a note payable and interest at the end of a year

    • E. 

      All of the above result in recording a transaction

  • 7. 
    Which group of accounts contains only those that normally have a credit balance?
    • A. 

      Accounts receivable; Accumulated depreciation; Fees earned.

    • B. 

      Bonds payable; Cash; Contributed capital.

    • C. 

      Cash; Inventory; Unearned revenue.

    • D. 

      Notes payable; Wages payable; Contributed capital.

    • E. 

      None of the above contains only credit balance accounts.

  • 8. 
    Income tax expense is recognized on the income statement when taxes are paid.
    • A. 

      True

    • B. 

      False

  • 9. 
    • A. 

      A above

    • B. 

      B above

    • C. 

      C above

    • D. 

      D above

    • E. 

      E above

  • 10. 
    • A. 

      240,000

    • B. 

      200,000

    • C. 

      500,000

    • D. 

      560,000

    • E. 

      None of the above.

  • 11. 
    Boone's Cleaning Service performed cleaning services during December, 2006, but had not collected any cash (or other assets) from its customers by the end of the accounting period, December 31, 2006. What effect did performing these services have on the fundamental accounting model?
    • A. 

      Increased assets and increased liabilities.

    • B. 

      These services will not affect the accounting model until the cash is actually collected.

    • C. 

      Increased assets and increased stockholders' equity.

    • D. 

      Decreased liabilities and decreased stockholders' equity.

    • E. 

      Increased assets and decreased stockholders' equity.

  • 12. 
    On January 1, 2009 Gucci Brothers Inc. started the year with a $500,000 credit balance in retained earnings and $600,000 balance in capital stock. During 2009, the company earned net income of $100,000, declared a dividend of $15,000, and issued more stock for $25,000. What is total stockholders' equity on December 31, 2009?
    • A. 

      1,100,000

    • B. 

      1,210,000

    • C. 

      1,225,000

    • D. 

      1,240,000

    • E. 

      None of the above.

  • 13. 
    • A. 

      A above

    • B. 

      B above

    • C. 

      C above

    • D. 

      D above

    • E. 

      E above

  • 14. 
    Of the following accounts, which one would not appear in the post-closing trial balance?
    • A. 

      Service revenue.

    • B. 

      Supplies inventory.

    • C. 

      Contributed capital.

    • D. 

      Retained earnings.

    • E. 

      All of the above would appear.

  • 15. 
    Which of the following would most likely lead to a deferred adjustment?
    • A. 

      Wages payable

    • B. 

      Income taxes payable

    • C. 

      Unearned revenue

    • D. 

      All of the above would lead to deffered adjustments

    • E. 

      None of the above would lead to deffered adjustments

  • 16. 
    • A. 

      Insurance expense, $3,000; Prepaid insurance $0.

    • B. 

      Insurance expense, $0; Prepaid insurance $3,000.

    • C. 

      Insurance expense, $750; Prepaid insurance $2,250.

    • D. 

      Insurance expense, $2,250; Prepaid insurance $750.

    • E. 

      None of the above is correct.

  • 17. 
    Both the depreciation expense account and the accumulated depreciation account at the end of the first year of operations
    • A. 

      Are closed.

    • B. 

      Appear in a trial balance prepared after the adjusting entries but before the closing entries.

    • C. 

      Are not closed at the end of the accounting period.

    • D. 

      Appear in a trial balance prepared prior to the adjusting and closing entries.

    • E. 

      None of the above is correct.

  • 18. 
    Which is the correct order of the steps in the accounting cycle at the end of the accounting period?
    • A. 

      Prepare financial statements, journalize and post adjustments, journalize and post the closing entries, and prepare a trial balance

    • B. 

      Prepare a trial balance, journalize and post adjustments, journalize and post the closing entries, and prepare financial statements

    • C. 

      Journalize and post adjustments, journalize and post the closing entries, prepare financial statements, and prepare a trial balance

    • D. 

      Prepare a trial balance, journalize and post adjustments, prepare financial statements, and journalize and post the closing entries

    • E. 

      None of the above is the correct order