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Accounting exam 2 practice exam questions with verified answers
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- Accounting
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- Accounting
Accounting exam 2 practice exam questions with verified answers
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Accounting exam 2 practice examquestions with verified answers
1. Receiving cash from a customer paying on account would affect which of the
following financial statements? Choose all that apply; that means there may be more
than one answer necessary.
A. Statement of Owner's Equity
B. Statement of Cash Flows
C. Balance Sheet
D. Income Statement - Answer-B. Statement of Cash Flows
C. Balance Sheet
2. Consider the Accrual basis of accounting versus the Cash basis of accounting.
Receiving a payment from one of our customers on account would:
A. Would be an revenue under the Cash basis of accounting.
B. Would be an revenue under the Accrual basis of accounting.
C. Would not be a revenue under the Cash basis; revenue is not earned.
D. Would be a liability under the Cash basis of accounting. - Answer-A. would be a
revenue under the cash basis of accounting
- on account = partial payment
How would the following be presented on a journal entry:
Supplies previously purchased are now used. - Answer-Supply Expense
Supply
-expense because it is now used
How would the following be presented on a journal entry:
The company buys equipment with cash. - Answer-Equipment
Cash
- increasing asset, decreasing asset
How would the following be presented on a journal entry:
The company pays rent for one year in advance. - Answer-Prepaid Rent
Cash
- increasing asset, decreasing asset
How would the following be presented on a journal entry:
The company returns inventory previously purchased with cash to the vendor. - Answer-
Cash
Inventory
- increase in asset, decrease in asset
On which financial statement would Dividends appear?
, A. Statement of Retained Earnings
B. Balance Sheet
C. Statement of Financial Position
D. Income Statement - Answer-A. statement of retained earnings
8. The following journal entry describes which of the following transactions?
A/P 1,000
Cash 1,000
A. A customer performed services for us, we now owe the customer.
B. Performed services on account for a customer.
C. Collected an A/R from a previously billed customer.
D. Paid off an accounts payable with cash. - Answer-D. paid off an accounts payable
with cash
9. The following journal entry describes which of the following transactions?
Salary Payable 1,200
Cash 1,200
A. Employees have worked and not yet been paid.
B. Salary Expense is now incurred, 1,200.
C. Workers are now being paid 1,200.
D. None of the above transactions describe the journal entry. - Answer-C. workers are
now being paid 1,200
10. Amy purchases 10 units of inventory from Bob for $1,500. Amy then sells these 10
units to Jill for $3,000. Jill pays $2,000, in cash and puts the remainder on open
account. What is the gross margin ratio for Amy? Also, is this favorable or unfavorable if
the industry average is 25%?
A. 50% and Favorable
B. 50% and Unfavorable
C. 16.67% and Unfavorable
D. 16.67% and Favorable
E. None of the above - Answer-A 50% and favorable
11. Which of the following is considered an accounting event?
A. Sara sends in her season ticket form with a check enclosed.
B. Kyle contracted with his boss for a job promotion.
C. Sally goes to an interview and is told that she got the job.
D. John goes into a tattoo parlor and makes an appointment. - Answer-A Sara sends in
her season ticket form with a check enclosed.
12. According to the Matching Concept:
A. Revenues should be recorded in the same period as its corresponding asset.
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