The financial statement that presents a summary of assets

1. The financial statement that presents a summary of assets, liabilities, and owner’s equity as of a specific date is the:
a. statement of owner’s equity
b. balance sheet
c. income statement
d. statement of cash flows

2. The normal balance of an expense account is a ________ while the normal balance of an asset account is a ____________.
a. debit, credit
b. debit, debit
c. credit, credit
d. credit, debit

3. The normal balance of a liability account is a ________ while the normal balance of a revenue account is a __________.
a. credit, debit
b. debit, debit
c. debit, credit
d. credit, credit

4. Which of the following entries records the billing of service revenue performed on account for $5,400:
a. debit to service revenue and a credit to accounts receivable for $5,400
b. debit to accounts payable and a credit to service revenue for $5,400
c. debit to accounts receivable and a credit to the owner’s capital for $5,400
d. debit to accounts receivable and a credit to service revenue for $5,400

1. Performing a service for $500 cash and $700 on account would include a:
a. debit to cash for $1,200
b. debit to service revenue for $1,200
c. credit to service revenue for $500
d. debit to accounts receivable for $700

2. The normal balance of cash is a _____ because it is a(n) _____ account.
a. debit, expense
b. credit, asset
c. debit, asset
d. credit, revenue

3. The normal balance of accounts payable is a _____ because it is a(n) _____ account.
a. credit, liability
b. credit, revenue
c. credit, owner’s equity
d. credit, asset

4. An owner investment of a building, valued at $200,000, with a $55,000 outstanding mortgage into an entity would:
a. increase owner’s equity $145,000
b. increase total assets $55,000
c. decrease liabilities $145,000
d. increase owner’s equity $200,000

1. The matching principle is the basis for recording:
a. revenues
b. expenses
c. assets
d. liabilities
2. Accrued revenue has:
a. not been earned nor has cash been received
b. been earned but cash has not been received
c. not been earned but cash has been received
d. been earned and cash has been received

3. The supplies account shows a beginning balance of $3,000. Assume the supplies account shows a debit for $5,500 representing supplies purchased during the period and the supplies inventory at year-end is $1,700. The adjusting entry involves a:
a. debit so supplies expense for $6,800
b. debit so supplies for $6,800
c. debit to supplies expense for $1,700
d. debit to supplies for $1,700

4. Prepaid insurance shows a beginning balance of $500 and an ending balance of $600. During the year, prepaid insurance was debited for $2,200. What is the amount of insurance expense shown on the current year’s income statement?
a. $2,100
b. $1,700
c. $1,600
d. $2,700

1. The _____is/are transferred from the income statement to the statement of owner’s equity.
a. ending capital
b. withdrawals
c. net income
d. beginning capital

2. Revenues total $10,200, expenses total $7,300, and the owner’s withdrawals account has a balance of $2,600. What is the balance in the income summary account prior to closing net income or net loss?
a. $2,900 debit
b. $300 debit
c. $2,900 credit
d. $300 credit

3. Revenues total $10,200, expenses total $7,300, and the owner’s withdrawals account has a balance of $2,600. What is the balance in the income summary account after all closing entries are completed?
a. $2,600 credit
b. $2,900 debit
c. $2,900 credit
d. $ -0-

4. The balance in the Accumulated Depreciation account must be:
a. $8,050
b. $10,200
c. $65,250
d. impossible to determine with this data

1. Which of the following accounts are closed to the owner’s capital account?
a. revenues and expenses
b. the owner’s withdrawal account and expenses
c. income summary and owner’s withdrawal account
d. revenues, expenses and the owner’s withdrawal account

2. Credit terms of 1/10, n/30 indicates that the buyer is:
a. allowed to a 10% discount if payment is made within 30 days
b. allowed a 1% discount if payment is made within 10 days
c. allowed a 1% discount if payment is made within 30 days
d. allowed a 30% discount if payment is made within 10 days

3. A company makes a purchase of $2,000 of inventory, subject to credit terms of 3/10, n/45 and returns $500 of inventory prior to payment. What is the amount of the payment assuming payment is made within the discount period?
a. $1,500
b. $1,455
c. $1,440
d. $1,560

4. The buyer is responsible for the shipping costs when the shipping terms are:
a. FOB destination
b. COD destination
c. FOB shipping point
d. COD shipping point

 

1. Under a perpetual inventory system, the entries to record a $1,600 sales return for a sale originally made on account, when the merchandise had a cost of $900, include a:
a. debit to inventory for $900
b. debit to sales returns and allowances of $700
c. credit to cost of goods sold of $1,600
d. credit to accounts receivable of $900

2. Inventory and cost of goods sold appear on the:
a. balance sheet and statement of owner’s equity, respectively
b. balance sheet and income statement, respectively
c. statement of owner’s equity and income statement, respectively
d. income statement and statement of cash flows, respectively

3. Revenues total $10,200, expenses total $7,300, and the owner’s withdrawals account has a balance of $2,600. What is the balance in the income summary account after all closing entries are completed?
a. $2,600 credit
b. $2,900 debit
c. $2,900 credit
d. $ -0-

4. The normal balance of accounts payable is a _____ because it is a(n) _____ account.
a. credit, liability
b. credit, revenue
c. credit, owner’s equity
d. credit, asset

 

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