Stockholders’ equity is affected by the ____________________
a. Purchase of an asset for cash
b. Payment of a liability
c. Collection of accounts receivable
d. Declaration and payment of a dividend
2. Which of the following accounts has a normal debit balance?
a. Utilities Expense
b. Retained Earnings
c. Design Revenue
d. Accounts Payable
3. Platt Realty Corporation had the following balance sheet accounts and balances:
Accounts Payable $6,000 Common Stock ?
Accounts Receivable ? Equipment $7,000
Building 1,000 Land 7,000
Cash 3,000 Retained Earnings 2,000
If the balance in the Accounts Receivable was $17,000, what would be the total liabilities and stockholders’ equity?
4. Which of the following accounts is decreased with a credit
a. Salaries Payable
b. Unearned Management Fees
c. Accounts Receivable
d. Retained Earnings
5. Dexter Company accepts an advance fee of $500 for services to be performed next year. The entry to record this transaction would include a:
a. Debit to Accounts Receivable
b. Credit to Unearned Service Fees
c. Credit to Cash
d. Credit to Service Fees Earned
The primary purpose of the trial balance is to test the:
a. Equality of debit and credit entries in the journal
b. Recording of transactions
c. Equality of debit and credit balances in the ledger
d. Analysis of transactions.
7. Which of the following accounts probably would need to be adjusted at year end?
d. Notes Payable
8. Which of the following is most likely to appear on the balance sheet as a current asset?
9. If Accounts Receivable has debit posting of $29,000, credit postings of $22,000, and a normal ending balance of $24,000, which of the following was its beginning balance?
10. A $4,000 machine is purchased by paying $1,000 cash and issuing a promissory note for the remainder. The entry should include a:
Credit to Notes Payable
Debit to Cash
Credit to Notes Receivable
d. Credit to Machinery
11. After all closing entries have been posted, which of the following accounts is most likely to have a non zero balance?
12. Which of the following transactions is most likely not to result in an adjusting entry at the end of the period?
Purchase of a two year insurance policy
Payment of this month’s rent
Purchase of office equipment
Performance of a service for which payment was received in advance.
13. When a company receives an electric bill but does not pay it right away it should
Debit Utilities Expense and credit Accounts Receivable
Make no entry until the bill is paid
Debit Utilities Expense and credit Accounts Payable
Debit Accounts Payable and credit Utilities Expense
14. The entry for the expiration of prepaid advertising, originally recorded as an asset, consists of a debit to
Advertising Expense and a credit to Prepaid Advertising
Prepaid Advertising and a credit to Cash
Advertising expense and a credit to Cash
Prepaid Advertising and a credit to Advertising Expense
15. Which of the following could not possibly be a closing entry?
Debit Income Summary and credit Dividends
Debit Income Summary and credit Retained Earnings
Debit Retained Earnings and credit Dividends
Debit Retained Earnings and credit Income Summary
16. Current assets divided by current liabilities is known as the
17. Gross margin equals the difference between net sales and:
Cost of goods sold plus operating expenses
Cost of goods sold
Cailor Corporation provides food services to universities. Its account balances (all normal) are provided below in alphabetical order for the month ended July 31, 2007. The Cailor Corporation, Retained Earnings account balance represents the balance as of June 30, 2007; all other account balances are as of July 31, 2007. ------------------------------------------------------------------