General Accounting and Auditing Principles.. both the historical cost principle and the monetary unit assumption.. both the monetary unit assumption and the historical cost principle.. I
Trang 1Financial and Managerial Accounting, 2e Instructor
Section # _ Date
Score
PART I — MULTIPLE CHOICE (36 points)
Instructions: Designate the best answer for each of the following questions.
1 "GAAP" refers to
a General Accounting and Auditing Principles
b Guidelines for American Accounting Procedures
c General Association of Accounting Practitioners
d None of these answer choices are correct
2 The requirement that only transaction data capable of being expressed in terms of
money be included in the accounting records relates to the
a historical cost principle
b monetary unit assumption
c economic entity assumption
d both the historical cost principle and the monetary unit assumption
3 The initials “CPA” stand for
a Certified Practical Auditor
b Chartered Public Auditor
c Certified Public Accountant
d Can't Pass Accounting
4 Which of the following is not an external user of accounting data?
a Company officers
b Regulatory agency
c Labor union
d Taxing authority
5 Which of the following is not generally understood to be a major service of a public
accounting firm?
a Auditing
b Taxation
c Budgeting
d Management consulting
Trang 26 Which of the following presents key aspects of the process of accounting in the correct
chronological order?
a Totaling, auditing, and budgeting
b Budgeting, recording, and communicating
c Recording, totaling, and auditing
d Identifying, recording, and communicating
7 The process of transferring transaction effects into the appropriate accounts is referred
to as
a closing
b journalizing
c recording
d posting
8 The following describes the process of identifying the economic events of an
organization
a Keeping a chronological diary of particular events in an orderly and systematic manner
b Selecting the economic activities relevant to a particular organization
c Preparing accounting reports, including financial statements
d Quantifying events in dollars and cents
9 The current source of "GAAP" in the private sector is the
a Accounting Principles Board
b Internal Revenue Service
c Financial Accounting Standards Board
d Securities Exchange Commission
10 Transactions are initially recorded in the
a general ledger
b trial balance
c general journal
d balance sheet
11 The retained earnings account had a beginning balance of $40,000 and an ending
balance of $50,000 If $10,000 of dividends were paid during the period, net income must have been
a $20,000
b $40,000
c $10,000
d $30,000
12 Which of the following is false with regard to a general journal?
a It tracks the increases and decreases in an individual account
b It provides a chronological record of transactions
c It discloses in one place the complete effects of a transaction
d It helps to prevent errors since the debit and credit amounts in an individual entry can be readily compared
Trang 313 Financial statements combining the operations of Sears and J.C Penney would
violate the
a monetary unit assumption
b economic entity assumption
c historical cost principle
d both the monetary unit assumption and the historical cost principle
14 At January 1, 2017, Orion Enterprises reported accounts receivable totaling $14,000
During the month, the company had credit sales of $28,000 and collected cash on accounts of $24,000 At the end of January, the balance in accounts receivable is
a $14,000 credit
b $38,000 debit
c $10,000 credit
d $18,000 debit
15 The accounting equation for Ally Elton, Inc is:
Assets $120,000 = Liabilities $50,000 + Stockholders’ Equity $70,000
If the company purchases supplies on account for $5,000, the new accounting equation will be:
a Assets $115,000 = Liabilities $50,000 + Stockholders’ Equity $70,000
b Assets $125,000 = Liabilities $55,000 + Stockholders’ Equity $70,000
c Assets $125,000 = Liabilities $50,000 + Stockholders’ Equity $75,000
d Assets $120,000 = Liabilities $55,000 + Stockholders’ Equity $65,000
16 Although a separate legal entity, the transactions of the following still must be kept
separate from the personal activities of the owners for accounting purposes:
a Proprietorship
b Partnership
c Corporation
d Both a proprietorship and a partnership
17 Limited liability is not enjoyed by the owner(s) of a
a corporation
b partnership
c proprietorship
d both partnership and proprietorship
18 At June 1, 2017, Larry Levine Company reported Accounts Payable of $15,000 During
the month, the company made purchases on account of $51,000 and payments on account of $30,000 At June 30, 2017, the balance in Accounts Payable is
a $15,000 debit
b $36,000 credit
c $66,000 credit
d $30,000 debit
T 1 -3
Trang 4PART II — JOURNAL ENTRIES (39 points)
The ledger accounts given below, with an identification number for each, are used by Flynn Company
Instructions: Indicate the appropriate entries for the month of June by placing the appropriate
identification number(s) in the debit and credit columns provided Item 0 is given as an example Write "none" if no entry is appropriate
Expense
———————————————————————————————————————————
No Entry Information Debited Credited
———————————————————————————————————————————
———————————————————————————————————————————
three-month, 12% note payable was signed for this amount
———————————————————————————————————————————
during the week
———————————————————————————————————————————
be paid at the rate of $4,000 monthly, receiving $2,000
on the 15th and 30th of each month She will begin work June 16
———————————————————————————————————————————
run this past week
———————————————————————————————————————————
———————————————————————————————————————————
———————————————————————————————————————————
———————————————————————————————————————————
run the first week in July
———————————————————————————————————————————
10 June 27 Received $9,000 from customers for services to be
rendered early in July
———————————————————————————————————————————
collected during June
———————————————————————————————————————————
———————————————————————————————————————————
———————————————————————————————————————————
Trang 5PART III — SHORT PROBLEMS (10 points)
Instructions: Present the solutions, with appropriate supporting calculations, for each of
the following independent problems
A Given the following information, compute 2017 net income for Orson Company
B Indicate the impact on the accounting equation of each of the following transactions Item 0 is given as an example
equity
T 1 -5
Trang 6PART IV — TYPES OF ACCOUNTS (5 points)
Instructions: Place a check in the appropriate columns to designate whether each of the
following accounts: (1) has a debit or credit normal balance; and (2) is an asset, liability, or stockholders’ equity account.
———————————————————————————————————————————
(1) (2)
Stockholders’
———————————————————————————————————————————
———————————————————————————————————————————
———————————————————————————————————————————
———————————————————————————————————————————
———————————————————————————————————————————
———————————————————————————————————————————
———————————————————————————————————————————
———————————————————————————————————————————
———————————————————————————————————————————
———————————————————————————————————————————
———————————————————————————————————————————
Trang 7Solutions — Achievement Test 1: Chapters 1 and 2
PART I — MULTIPLE CHOICE (36 points)
PART II — JOURNAL ENTRIES (26 points)
PART III — SHORT PROBLEMS (10 points)
A Ending stockholders’ equity, 12/31/17 $150,000
Beginning stockholders’ equity, 1/1/17 (120,000)
Increase in stockholders’ equity 30,000
Dividends paid during 2017 38,000
68,000 Investments during 2017 (25,000)
Net income in 2017 $ 43,000
B 1 Increases assets and increases stockholders’ equity
2 No effect
3 Increases assets and increases liabilities
4 No effect
5 Increases assets and increases liabilities
6 Increases assets and increases stockholders’ equity
7 No effect
8 Decreases assets and decreases stockholders’ equity
T 1 -7
Trang 8PART IV — TYPES OF ACCOUNTS (5 points)
Stockholders’
1. Service Revenue
2 Salaries and Wages
Expense
3. Supplies
4. Common Stock
5 Accounts Payable
6 Salaries and Wages
Payable
7. Dividends
8. Accounts Receivable
9. Prepaid Insurance
10 Notes Payable