If a company has received payment for a service that it hasn’t performed yet, the correct journal entry would include:

 What is the primary accounting equation?

Liabilities = Revenues + Owner’s Equity

Revenues = Owner’s Equity - Expenses

Assets = Liabilities + Owner’s Equity

Assets = Cash + Owner's Equity

Question 2

If a company has received payment for a service that it hasn’t performed yet, the correct journal entry would include:

A Credit to Cash

A Debit to Accounts Receivable

A Debit to Prepaid Expenses

A Credit to Unearned Revenue

Question 3

Transferring the ending balances of Revenues, Expenses, and Dividends to Retained Earnings is part of what entries:

Closing entries

General journal entries

Adjusting entries

Transferring entries

Question 4

Your company receives a check for payment for a customer who purchased products from you on account last month. The correct journal entry to record the payment is:

Credit Cash and Debit Revenue

Debit Cash and Credit Accounts Receivable

Credit Cash and Debit Retained Earnings

Debit Cash and Credit Revenue

Question 5

Sorting Accounts Receivables in categories of how far they are past due is called:

Sorting of Receivables

Parsing of Receivables

Aging of Receivables

Separating Receivables

Question 6

What does the following terms of payment represent? 1/10 net 45

10% discount if paid on the date of purchase. 45% penalty if paid late.

One tenth of payment due today, the rest due in 45 days.

1% discount if paid between the 10th day and the 45th day.

1% discount if paid within 10 days, otherwise the full amount is due within 45 days.

Question 7

If a company obtains a loan from a bank, the initial journal entry should be:

Debit to Accounts Payable and Credit to Cash

Debit to Cash and Credit to Notes Payable

Debit to Interest Payable and Credit to Cash

Debit to Cash and Credit to Accounts Payable

Question 8

Which of the following is not a section of the Statement of Cash Flows?

Investing Activities

Purchasing Activities

Financing Activities

Operating Activities

Question 9

A company bought a machine for $10,000. The salvage value is $1000 and the machine has a useful life of 5 years. What would be the first year’s depreciation?

$2000

$1000

$4500

$1800

Question 10

What is the formula for Current Ratio?

Current Liabilities / Current Assets

Current Assets - Current Liabilities

Current Assets / Current Liabilities

Current Liabilities - Current Assets

Question 11

If beginning Retained Earnings were $85,000, Dividends paid were $18,000, and Ending Retained Earnings were $165,000, what was Net Income?

$98,000

$62,000

$234,000

$147,000

Question 12

Which of the following financial statements lists economic resources?

Income Statement

Statement of Changes in Retained Earnings

Statement of Cash Flows

Balance Sheet

Question 13

Which section of the Balance Sheet would you find Accumulated Depreciation?

Assets

Liabilities

Owner’s Equity

Accumulated Depreciation would not be located in the Balance Sheet

Question 14

Accounting is considered a double entry system due to the fact that:

All entries must be included in the Trial Balance and the Balance Sheet

Revenue is recorded when it is earned and again when cash is received

Debits and Credits must equal each other on all journal entries

All entries must be the same on the Unadjusted Trial Balance and the Adjusted Trial Balance

Question 15

When do Cost of Goods Sold affect Net Income?

When the associated product or service is delivered or provided

When cash is received for the associated product or service

When the customer pays for the product, even if it is in a future month

None of the above

Question 16

A loan in the amount of $10,000 was given to an employee on September 1 of 2016. The loan principal and all interest will be repaid on August 31 of 2017. The loan accrues interest on a monthly basis at an annual 6% rate. What journal entry would be recorded at year end on December 31, 2016.

Debit to Cash of $50 and a Credit to Interest Receivable of $50

Debit to Cash of $200 and a Credit to Interest Revenue of $200

Debit to Interest Receivable of $200 and a Credit to Interest Revenue of $200

No journal entry is required

Question 17

Which of the following is not an Intangible Asset?

Copyright

Trademark

Patent

Inventory

Question 18

Which of the following is never found in the Owner’s Equity section of the Balance Sheet?

Bonds

Common Stock

Additional Paid in Capital

Retained Earnings

Question 19

What is the name of the reward paid directly from a company to its shareholders?

Dividends

Interest

Profits

Capital Gains

Question 20

If your employee performed work on December 30 and December 31, earning $300 per day, but will not be paid until January 2, the correct December 31 journal entry would include:

A debit to Cash of $600 and a Credit to Salaries Expense of $600

A debit to Salaries Expense of $600 and a credit to Cash of $600

A debit to Salaries Expense of $600 and a credit to Salaries Payable of $600

No journal entry is needed until they are paid