Reference no: EM131010838

1. A form used to organize and check data before preparing financial reports is known as a(n):

a. trial balance

b. income statement

c. balance sheet

d. worksheet

2. Equipment with a cost of $150,000 has an accumulated depreciation of $100,000. What is the historical cost of the equipment?

a. $150,000

b. $50,000

c. $200,000

d. $100,000

3. Bailey's received its electric bill for December on December 31, but did not pay nor record it in the general journal. This resulted in:

a. understated assets

b. overstated net income

c. overstated liabilities

d. understated capital

4. The adjusted trial balance columns:

a. help to ensure the ledger is still in balance

b. help to identify any errors that may have been made during adjustment

c. show updated account balances to aid in preparation of the financial statements

d. All of the above.

5. The capital balance amount shown in the balance sheet column of the worksheet represents:

a. the beginning capital plus net income

b. the beginning capital plus net income less withdrawal

c. the beginning capital less withdrawals

d. the beginning capital plus any investments to capital that occurred during the period

6. On a worksheet, the income statement debit column totals $10,200 and the credit column totals $10,000. Which of the following statements is correct?

a. The company had a net loss of $200.

b. The company had a net income of $200.

c. The company's revenues were greater than expenses.

d. None of the above are correct.

7. Adjusting journal entries:

a. need not be journalized since they appear on the worksheet.

b. need not be posted if the financial statements are prepared from the worksheet.

c. are not needed if closing entries are prepared.

d. must be journalized and posted.

8. Accounts in which the balances are carried over from one accounting period to the next are called:

a. real accounts

b. nominal accounts

c. temporary accounts

d. zero accounts

9. Closing entries:

a. need not be journalized since they appear on the worksheet

b. need not be posted if the financial statements are prepared from the worksheet

c. are not needed if adjusting entries are prepared

d. must be journalized and posted

10. The entry to close income summary (net loss) was entered in reverse-income summary was debited and capital was credited. This error will cause:

a. income summary to have a credit balance

b. income summary to have a debit balance

c. the assets to be overstated

d. the liabilities to be overstated

11. In the normal accounting cycle, the:

a. financial statements are prepared after the adjusting entries are posted

b. financial statements are prepared before the adjusting entries are posted

c. adjusting and closing entries are journalized before the financial statements are prepared

d. post-closing trial balance is prepared before the closing entries are posted

12. Closing entries will:

a. increase the owner's capital

b. decrease the owner's capital balance

c. either increase or decrease owner's capital

d. not affect the owner's capital balance

13. The adjusting entry to record depreciation for the company automobile would be:

a. debit accumulated depreciation, automobile; credit depreciation expense, automobile

b. debit accumulated depreciation, automobile; credit automobile

c. debit depreciation expense, automobile; credit accumulated depreciation, auto mobile

d. debit depreciation expense, automobile; credit automobile

14. Internal control over a company's assets should include the following policy:

a. responsibilities and duties of employees will be divided

b. all cash receipts will be deposited into the bank the same day they arrive

c. all cash payments will be made by check (except petty cash)

d. All of the above.

15. Company policy for internal control should include all of the following except:

a. employees will be rotated

b. monthly bank statements should be sent to and reconciled by the same employees who authorize payments and write checks

c. the owner (or responsible employee) signs all checks after receiving authorization to pay from the departments concerned

d. at time of payment, all supporting invoices or documents will be stamped "paid"

16. If the written amount on the check does not match the amount expressed in figures, the bank may:

a. pay the amount written in words

b. return the check unpaid

c. contact the drawer to see what was meant

d. All of the above.

17. The bank would issue a credit memorandum to Maria's Life Management when the bank:

a. received the deposits in transit

b. collects a note receivable from a customer

c. discovered a check that was deposited was returned for nonsufficient funds

d. None of the above.

18. How would outstanding checks be handled when reconciling the ending cash balance per the bank statement to the correct adjusted cash balance?

a. They would be added to the balance of the bank statement.

b. They would be subtracted from the balance of the bank statement.

c. They would be added to the balance per books.

d. They would be ignored.

19. A petty cash fund is set up:

a. to pay for large expenses

b. to pay for small expenses

c. for the owner to withdraw money for personal use conveniently

d. None of the above.

20. A pay period is defined as:

a. weekly

b. bi-weekly

c. monthly

d. All of the above.

21. Gross earnings are the same as:

a. regular earnings only

b. regular earnings + overtime earnings

c. net earnings

d. net earnings + overtime earnings

22. Bob Hill's hourly rate is $25.00, and he worked 38 hours during the week. What is his gross pay for the week?

a. $950

b. $780

c. $1,000

d. $975

23. Another name for the Fair Labor Standards Act is:

a. Federal Insurance Contribution Act

b. Federal Wage and Hour Law

c. Federal Income Tax Act

d. Federal Hourly Law

24. Which of the below allowances would have the least amount of taxes withheld for federal income tax purposes?

a. S-1

b. S-0

c. S-3

d. S-2

25. Blue's Tax Service has two types of employees: management and clerical support. The company estimates that it will pay the clerical support $300,000 next year and the managers $255,000. For every $100, the company pays $0.14 into the workers' compensation insurance. Calculate the amount of workers' compensation insurance.

a. $777

b. $336

c. $441

d. None of the above.