Question 1 2 / 2 points
Transactions in a journal are initially recorded in
A) account number order.
B) alphabetical order.
C) chronological order.
D) dollar amount order.
Question 2 2 / 2 points
The final step in the recording process is to
A) prepare a trial balance.
B) analyze each transaction.
C) transfer journal information to ledger accounts.
D) enter the transaction in a journal.
Question 3 2 / 2 points
Owner's capital at the end of the period is equal to
A) net income.
B) owner's capital at the beginning of the period plus net income minus drawings.
C) owner's capital at the beginning of the period plus net income minus liabilities.
D) assets plus liabilities.
Question 4 2 / 2 points
The Duce Company has five plants nationwide that cost $100 million. The current market value of the plants is $500 million. The plants will be recorded and reported as assets at
A) $400 million.
B) $600 million.
C) $500 million.
D) $100 million.
Question 5 2 / 2 points
All of the following are advantages cost has over other valuations except that it
A) can be objectively measured.
B) can be verified.
C) is reliable.
D) is relevant.
Question 6 2 / 2 points
At October 1, 2010, Padilla Industries had an accounts payable balance of $30,000. During the month, the company made purchases on account of $25,000 and made payments on account of $40,000. At October 31, 2010, the accounts payable balance is
Question 7 2 / 2 points
The proprietorship form of business organization
A) represents the largest number of businesses in the United States.
B) must have at least three owners in most states.
C) combines the records of the business with the personal records of the owner.
D) is characterized by a legal distinction between the business as an economic unit and the owner.
Question 8 2 / 2 points
A journal is not useful for
A) providing a record of transactions.
B) locating and preventing errors.
C) disclosing in one place the complete effect of a transaction.
D) preparing financial statements.
Question 9 2 / 2 points
At September 1, 2010, Crews Co. reported owner's equity of $136,000. During the month, Crews generated revenues of $20,000, incurred expenses of $12,000, purchased equipment for $5,000 and withdrew cash of $2,000. What is the amount of owner's equity at September 30, 2010?
Question 10 2 / 2 points
Which of the following events is not a business transaction?
A) Incurred utility expenses for the month.
B) Investment of cash by the owner.
C) Hired employees.
D) Earned revenue for services provided.
Question 11 2 / 2 points
Liabilities of a company are owed to
Question 12 2 / 2 points
Which of the following is an external user of accounting information?
A) Finance directors.
B) Labor unions.
C) Company officers.
Question 13 2 / 2 points
Metzger Company compiled the following financial information as of December 31, 2010:
Metzger, Capital (1/1/10) 70,000
Metzger, Drawings 10,000
Accounts payable 20,000
Accounts receivable 15,000
Metzger's assets on December 31, 2010 are
Question 14 2 / 2 points
Carla's Computer Repair Shop started the year with total assets of $270,000 and total liabilities of $180,000. During the year, the business recorded $450,000 in computer repair revenues, $255,000 in expenses, and Carla withdrew $45,000. Carla's Capital balance changed by what amount from the beginning of the year to the end of the year?
Question 15 2 / 2 points
In recording business transactions, evidence that an accounting transaction has taken place is obtained from
A) business documents.
B) the public relations department.
C) the Internal Revenue Service.
D) the SEC.
Question 16 2 / 2 points
Which of the following events cannot be quantified into dollars and cents and recorded as an accounting transaction?
A) The sale of store equipment.
B) The purchase of a new computer.
C) Payment of income taxes.
D) The appointment of a new CPA firm to perform an audit.
Question 17 0 / 2 points
Rusthe Company showed the following balances at the end of its first year:
Cash $ 7,000
Prepaid insurance 700
Accounts receivable 3,500
Accounts payable 2,800
Notes payable 4,200
Denton, Capital 1,400
Denton, Drawing 700
What did Rusthe Company show as total credits on its trial balance?
Question 18 2 / 2 points
If total liabilities increased by $15,000 and owner's equity increased by $5,000 during a period of time, then total assets must change by what amount and direction during that same period?
A) $20,000 decrease
B) $20,000 increase
C) $30,000 increase
D) $25,000 increase