PRINCIPLES OF ACCOUNTING FINAL EXAM SOLVED #4
The Matching principle in accounting requires the matching of:
A: Revenue earned with the expenses incurred to produce revenue
B: Revenue earned with the liabilities used to produce the revenue
C: Revenue earned with the assets used to produce the revenue
D: Revenue earned with the assets used less the liabilities incurred. - correct answer a
Which of the following best defines a fiscal year?
A: The final 12 month period in the life of a business
B: Any consecutive 12 month period that a business adopts as its accounting year
C: The first 12 month period in the life of a business
D: The 12 month period from January through December - correct answer B
Total revenues of 6,500, total expenses of 3,500 and dividends of 500 were recorded
for the month. What as the net income for this time period?
A: 3,500
B: 3,000
C: 2,500
D: 6,000 - correct answer B
Which of the following accounts does no to onto the income statement?
A: Sales Revenue
B: Rent expense
C: Insurance expense
D: unearned revenue - correct answer D
The unadjusted trial balance for a prepaid rent shows a 12,000 balance. At the end of
this period, 7,000 rent has been used. The adjusted trial balance for prepaid rent shows
what balance?
A: 7,000 Debit
B: 5,000 Debit
C: 5,000 credit
D: 7,000 Credit - correct answer B
A company bought a two year insurance policy on Aug. 1st for 150 per month. No
adjustments have been made since then. What is the adjusting entry of Dec. 31 of this
year?
A: Debit prepaid insurance 150, Credit insurance expense 150
B: Debit insurance expense 750, credit prepaid insurance 750
C: Debit insurance expense 150, credit prepaid insurance 150
D: debit prepaid insurance 750, credit insurance expense 750 - correct answer B
On the unadjusted trial balance, which accounts should have have their balance listed
in the debit column?
A: Liabilities, revenue, common stock
, B: Assets, dividends, and expenses
C: Assets, revenues, and dividends
D: Liabilities, revenues, and dividends - correct answer B
Which of the following is a true statement regarding the unearned revenue account?
A: Unearned revenue is accrued as the business provides goods or services
B: unearned revenue is expensed as the business provides goods or services
C: Unearned revenue decreases as the business provides goods or services
D: unearned revenue increases as the business provides goods or services - correct
answer C
The account cash had a beginning balance of zero and the following changes: increase
of 250, decrease of 75, increase of 113, and a decrease of 35. The ending balance is a:
A: Credit balance of 253
B: Debit balance of 253
C: debit balance of 363
D: credit balance of 110 - correct answer B
The general ledger is arranged in what order?
A: Chronological
B: normal credit balance accounts first
C: alphabetical order of the account names
D: account order - correct answer D
Jill invested 25,000 in her business. The journal entry (for the business) would include
a:
A: credit cash for 25,000 and a debit to common stock for 25,000
B: Debit cash for 25,000 and a credit to dividends for 25,000
C: debit to cash for 25,000 and a credit to common stock for 25,000
D: credit to cash for 25,000 and a debit to dividends for 25,000 - correct answer C
What is the basic account equation?
A: Revenue minus expenses equal net income
B: Debits equal credits
C: Assets equal liabilities plus owners equity
D: Beginning retained earnings plus net income minus dividends equals ending retained
earnings - correct answer C
Respectively, cash, rent expense, and accounts payable are:
A: All permanent accounts
B: permanent, temporary, and temporary accounts
C: permanent, temporary, and permanent accounts
D: Temporary, permanent, and temporary accounts - correct answer C
Total revenues of 6,500, total expenses of 3,500, and dividends of 500 were recorded
for the month. What was net income for this time period?
The Matching principle in accounting requires the matching of:
A: Revenue earned with the expenses incurred to produce revenue
B: Revenue earned with the liabilities used to produce the revenue
C: Revenue earned with the assets used to produce the revenue
D: Revenue earned with the assets used less the liabilities incurred. - correct answer a
Which of the following best defines a fiscal year?
A: The final 12 month period in the life of a business
B: Any consecutive 12 month period that a business adopts as its accounting year
C: The first 12 month period in the life of a business
D: The 12 month period from January through December - correct answer B
Total revenues of 6,500, total expenses of 3,500 and dividends of 500 were recorded
for the month. What as the net income for this time period?
A: 3,500
B: 3,000
C: 2,500
D: 6,000 - correct answer B
Which of the following accounts does no to onto the income statement?
A: Sales Revenue
B: Rent expense
C: Insurance expense
D: unearned revenue - correct answer D
The unadjusted trial balance for a prepaid rent shows a 12,000 balance. At the end of
this period, 7,000 rent has been used. The adjusted trial balance for prepaid rent shows
what balance?
A: 7,000 Debit
B: 5,000 Debit
C: 5,000 credit
D: 7,000 Credit - correct answer B
A company bought a two year insurance policy on Aug. 1st for 150 per month. No
adjustments have been made since then. What is the adjusting entry of Dec. 31 of this
year?
A: Debit prepaid insurance 150, Credit insurance expense 150
B: Debit insurance expense 750, credit prepaid insurance 750
C: Debit insurance expense 150, credit prepaid insurance 150
D: debit prepaid insurance 750, credit insurance expense 750 - correct answer B
On the unadjusted trial balance, which accounts should have have their balance listed
in the debit column?
A: Liabilities, revenue, common stock
, B: Assets, dividends, and expenses
C: Assets, revenues, and dividends
D: Liabilities, revenues, and dividends - correct answer B
Which of the following is a true statement regarding the unearned revenue account?
A: Unearned revenue is accrued as the business provides goods or services
B: unearned revenue is expensed as the business provides goods or services
C: Unearned revenue decreases as the business provides goods or services
D: unearned revenue increases as the business provides goods or services - correct
answer C
The account cash had a beginning balance of zero and the following changes: increase
of 250, decrease of 75, increase of 113, and a decrease of 35. The ending balance is a:
A: Credit balance of 253
B: Debit balance of 253
C: debit balance of 363
D: credit balance of 110 - correct answer B
The general ledger is arranged in what order?
A: Chronological
B: normal credit balance accounts first
C: alphabetical order of the account names
D: account order - correct answer D
Jill invested 25,000 in her business. The journal entry (for the business) would include
a:
A: credit cash for 25,000 and a debit to common stock for 25,000
B: Debit cash for 25,000 and a credit to dividends for 25,000
C: debit to cash for 25,000 and a credit to common stock for 25,000
D: credit to cash for 25,000 and a debit to dividends for 25,000 - correct answer C
What is the basic account equation?
A: Revenue minus expenses equal net income
B: Debits equal credits
C: Assets equal liabilities plus owners equity
D: Beginning retained earnings plus net income minus dividends equals ending retained
earnings - correct answer C
Respectively, cash, rent expense, and accounts payable are:
A: All permanent accounts
B: permanent, temporary, and temporary accounts
C: permanent, temporary, and permanent accounts
D: Temporary, permanent, and temporary accounts - correct answer C
Total revenues of 6,500, total expenses of 3,500, and dividends of 500 were recorded
for the month. What was net income for this time period?
