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ACC101 Full Exam Questions With 100%
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An adjusting entries for unearned revenue affects - Answer✔Revenue and Liabilities
How will it affect total Assets in the balance sheet if tangible fixed assets are not depreciated at
the end of the period? - Answer✔Total Assets are overstated
How will it affect Income Statement if an accrued expense of $450 is forgotten to record at the
end of the period? - Answer✔Net Income in the Income Statement will be overstated for $450
What accounting principle requires credit sales revenue also included in the income statement? -
Answer✔Accrual basis
Which kind of account is accumulated depreciation? - Answer✔Contra - asset account
Where is Accumulated depreciation reported? - Answer✔Balance sheet
Which statement is true about Mary's capital: - Answer✔The owner's equity account that
contains the amount invested in the sole proprietorship by Mary Smith plus the net income since
the company began minus the draws made by Mary Smith since the company began.
Which account of these accounts will be presented in Post-closing trial balance? -
Answer✔Retained Earnings
Adjusting entries at the end of an accounting period would not be required for which of the
following? - Answer✔Revenue that has been earned and recorded in the accounting records
At the end of the current accounting period, Johnson Company failed to record utilities
consumed during the period. Johnson will be billed for the utilities during the next accounting
period. As a result, current period liabilities, and income, respectively, are - Answer✔Understate,
overstate
How will the Financial Statements be affected if Accountant in the company forgot to adjust a
prepaid expense account at the end of the period? - Answer✔Assets in the Balance sheet will be
overstated and Expenses in the Income Statement will be understated
The following transactions, among others, occurred during August. Which transaction
represented an expense during August - Answer✔Rent a space for office on account. The rental
amount will be paid in the next 2 months
How many accounts does every business transaction affect at least? - Answer✔2
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Which type of information would be of most interest to creditors? - Answer✔Ability of the
company to pay debts
The account used to record the investment of owner into the business is: - Answer✔The owner's
contributed capital account
If assets are $199,000 and liabilities are $132,000, then equity equals - Answer✔$67,000
Provide descriptions for this transaction:Debit inventory $8,000 and credit Account payable
$,8000 - Answer✔Buying inventory on credit $8,000
Failure to make adjusting entries for prepaid expense will result in - Answer✔Understatement of
expenses
The company buys a new car for personal use of the owner is recorded with below entry: -
Answer✔Credit cash and debit withdrawal
Which of the following errors would result in the trial balance still balancing? - Answer✔Posted
$500 to each account instead of $5000
The adjusting entry to record the earned but unpaid salaries of employees at the end of an
accounting period is: - Answer✔Debit Salaries Expense and credit Salaries Payable
Identity the consequences of not making adjustment for accrued expense -
Answer✔Understatement of liabilities
The company buys a new building for operation is recorded with below entry: - Answer✔Credit
cash and debit equipment
A cash outflow from the company into its owner is called a(n): - Answer✔Withdrawal
Liability created by purchasing goods and services on credit are: - Answer✔Accounts payable
Photometer Company paid off $30,000 of its accounts payable in cash. What would be the
effects of this transaction on the accounting equation? - Answer✔Assets, $30,000 decrease;
liabilities, $30,000 decrease; equity, no effect.
How does Lead Company record by the billing of a client for $15,000 of service completed? -
Answer✔+$15,000 accounts receivable, +$15,000 revenue
Moffat Company has assets of $600,000, liabilities of $250,000, and equity of $350,000. What is
the entry need to record when Moffat Company bill of a client for $25,000 of contract
completed? - Answer✔+$25,000 accounts receivable, +$25,000 revenue.
The balance in the prepaid insurance account before adjustment at the end of the year is $4,800,
which represents the insurance premiums for four months. The premiums were paid on
November 1. The adjusting entry required on December 31 is: - Answer✔Debit Insurance
Expense, $2,400; credit Prepaid Insurance, $2,400.
A company might buy a service or product on credit. "On credit" implies that the cash payment
will occur: - Answer✔on a later date
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Provide descriptions for this transaction:Increase cash $1,000 and Increase equity $,1000 -
Answer✔Investment of cash in business by owner or performed services for cash
Provide descriptions for this transaction:Increase cash $4,000 and Increase CONTRIBUTED
CAPITAL $4000 - Answer✔Investment of cash in business by owner
Provide descriptions for this transaction:Debit office supplies $8,000 and credit liability $,8000 -
Answer✔Buying office supplies on credit $8,000
Provide descriptions for this transaction:Decrease cash $3500 and Decrease equity $3500 -
Answer✔Withdraw cash from the business by owner or paid cash for an expense
Items used in business operations, such as office pens and paper are several samples of: -
Answer✔Office supplies
The difference between a company's assets and its liabilities, or net assets is: - Answer✔Equity
Resources owned or controlled by a company that are expected to yield future benefits are: -
Answer✔Assets
Zion Company has assets of $600,000, liabilities of $250,000, and equity of $350,000. It buys
office equipment on credit for $75,000. What would be the effects of this transaction on the
accounting equation? - Answer✔Assets increase by $75,000 and liabilities increase by $75,000.
Internal users of accounting information include: - Answer✔Managers.
A chart of accounts generally starts with which of the following types of accounts? -
Answer✔Asset accounts
Which of the following is a liability? - Answer✔Account payable
If a company paid $38,000 of its accounts payable in cash, what was the effect on the assets,
liabilities, and equity? - Answer✔Assets would decrease $38,000, liabilities would decrease
$38,000, and equity would not change.
Assets created by selling goods and services on credit are: - Answer✔Accounts receivable.
A payment to an owner for personal use is called a(n): - Answer✔Withdrawal.
The properties used in operation activities of a business is called: - Answer✔Assets
Which of the following is a liability? - Answer✔Note payable
Which of the following is not considered as subcategory of owner�s Equity? - Answer✔Assets
Which of the following is not a liability? - Answer✔Short term investment
Which of the following is not a category or element of the balance sheet? - Answer✔Expense
The account used to record the transfers of assets from a business to its owner is: - Answer✔The
owner's withdrawals account.
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