A304 FINAL-EXAM REVIEW QUESTIONS & ANSWERS
Which of the following accounts is on the balance sheet?
-common stock
-gain of sale on land
-rent expense
-dividends declared - answers :common stock
Which of the following accounts does not have a normal credit balance?
-revenue
-notes payable
-depreciation expense
-common stock - answers :depreciation expense
On 12/31/18 hoka company recored $8,000 in total utilities used over the previous year.
It paid cash in the amount of $5,000 with the remaining balance on account, to be paid
2/1/19. When is the utility bill recorded as an expense?
-2/1/19, when the entire bill is paid off
-$5,000 on 12/31/18 and $3,000 2/1/19, when the cash is paid
-12/31/18, the end of the period in which the bull occurred
-any of the above would be acceptable, as long as hoka company does the same thing
each year maintaining consistency - answers :12/31/18, the end of the period in which
the bull occurred
One year ago, features company purchased a plot of land in bloomington for $100,000.
They calculated they could sell the plot to another company for $125,000. If the land
were to be destroyed by a flood, insurance would provide $140,000 to fix the damages.
Other plots of similar land in bloomington are currently being listed for around $120,000.
What amount should be reported on the balance sheet?
-$100,00
-$125,000
-$140,000
-$120,000 - answers :$100,000
On october 1, 2020 good company makes a three month loan to stan lee. The loan and
interest are paid in full on january 1, 2021. When would good record interest income?
(assume monthly statements)
-at the end of each month
-when the loan is granted
-at the end of the loan
-abc could choose any of the above options - answers :at the end of each mont
Bib company used instagram for advertising and incurred $10,000 of advertising
expense. The company paid $6,000 cash and owed the rest on account. Which of the
following statements is true concerning transaction effects?
, -assets decrease and net income increases
-liabilities increase and stockholders equity decreases
-expenses increase and liabilities decrease
-stockholders equity increases and assets decrease - answers :liabilities increase and
stockholders equity decreases
Which of the following would result in a net decrease in the equity section of the balance
sheet?
-received advanced payment for work to be performed in the future
-paid landlord for next year's rent on the company's office building
-provided services to customers that were put on accounts receivable
-declared, but did not pay, dividends to shareholders - answers :declared, but did not
pay, dividends to shareholders
The accrual method of accounting requires that wages owed to employees at the end of
the month:
-be paid during the month in which the employees worked
-be recorded as an expense in the month in which the employees are paid
-be recorded as an expense in the month in which the employees worked even if wages
are not paid until the next month
-be recored as an expense in the month in which the employees worked and again as
an expense when the employees are paid - answers :be recorded as an expense in the
month in which the employees worked even if wages are not paid until the next month
Which of the following transactions has no effect on total stockholders equity?
-cash received from the collection of accounts receivable
-adjustments of prepaid rent for usage of office space for the month
-sale of inventory on account for an amount over cost of goods sold
-receive and pay this month's water bill - answers :cash received from the collection of
accounts receivable
Which of the following is not an operating activity?
-selling merchandise to a customer
-paying rent
-paying direct labor wages
-taking out a loan from the bank - answers :taking out a loan from the bank
Which of the following accounts has a normal debit balance?
-accumulated depreciation
-retained earnings
-accounts payable
-revenue
-none of the above - answers :none of the above
Which of the following is an example of a deferred expense?
Which of the following accounts is on the balance sheet?
-common stock
-gain of sale on land
-rent expense
-dividends declared - answers :common stock
Which of the following accounts does not have a normal credit balance?
-revenue
-notes payable
-depreciation expense
-common stock - answers :depreciation expense
On 12/31/18 hoka company recored $8,000 in total utilities used over the previous year.
It paid cash in the amount of $5,000 with the remaining balance on account, to be paid
2/1/19. When is the utility bill recorded as an expense?
-2/1/19, when the entire bill is paid off
-$5,000 on 12/31/18 and $3,000 2/1/19, when the cash is paid
-12/31/18, the end of the period in which the bull occurred
-any of the above would be acceptable, as long as hoka company does the same thing
each year maintaining consistency - answers :12/31/18, the end of the period in which
the bull occurred
One year ago, features company purchased a plot of land in bloomington for $100,000.
They calculated they could sell the plot to another company for $125,000. If the land
were to be destroyed by a flood, insurance would provide $140,000 to fix the damages.
Other plots of similar land in bloomington are currently being listed for around $120,000.
What amount should be reported on the balance sheet?
-$100,00
-$125,000
-$140,000
-$120,000 - answers :$100,000
On october 1, 2020 good company makes a three month loan to stan lee. The loan and
interest are paid in full on january 1, 2021. When would good record interest income?
(assume monthly statements)
-at the end of each month
-when the loan is granted
-at the end of the loan
-abc could choose any of the above options - answers :at the end of each mont
Bib company used instagram for advertising and incurred $10,000 of advertising
expense. The company paid $6,000 cash and owed the rest on account. Which of the
following statements is true concerning transaction effects?
, -assets decrease and net income increases
-liabilities increase and stockholders equity decreases
-expenses increase and liabilities decrease
-stockholders equity increases and assets decrease - answers :liabilities increase and
stockholders equity decreases
Which of the following would result in a net decrease in the equity section of the balance
sheet?
-received advanced payment for work to be performed in the future
-paid landlord for next year's rent on the company's office building
-provided services to customers that were put on accounts receivable
-declared, but did not pay, dividends to shareholders - answers :declared, but did not
pay, dividends to shareholders
The accrual method of accounting requires that wages owed to employees at the end of
the month:
-be paid during the month in which the employees worked
-be recorded as an expense in the month in which the employees are paid
-be recorded as an expense in the month in which the employees worked even if wages
are not paid until the next month
-be recored as an expense in the month in which the employees worked and again as
an expense when the employees are paid - answers :be recorded as an expense in the
month in which the employees worked even if wages are not paid until the next month
Which of the following transactions has no effect on total stockholders equity?
-cash received from the collection of accounts receivable
-adjustments of prepaid rent for usage of office space for the month
-sale of inventory on account for an amount over cost of goods sold
-receive and pay this month's water bill - answers :cash received from the collection of
accounts receivable
Which of the following is not an operating activity?
-selling merchandise to a customer
-paying rent
-paying direct labor wages
-taking out a loan from the bank - answers :taking out a loan from the bank
Which of the following accounts has a normal debit balance?
-accumulated depreciation
-retained earnings
-accounts payable
-revenue
-none of the above - answers :none of the above
Which of the following is an example of a deferred expense?
