PA - Midterm Practice
PA - Midterm Practice
PA - Midterm Practice
Student name *
Khánh Ngọc
Student ID *
0901141346
PA14
1. Which of the following is not one of the three forms of business 1/1
organization?
a. Corporations
b. Partnerships
c. Proprietorships
d. Investors
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b. Production manager
Correct answer
a. a revenue.
b. an expense.
c. a liability.
d. an asset.
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Correct answer
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Buildings 320,000
Cash 280,000
Drawings 80,000
Inventory 40,000
a. $1,880,000.
b. $1,360,000.
c. $640,000.
d. $760,000.
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a. $100,000
b. $115,000
c. $135,000
d. $155,000
a. Balance sheet
b. Income statement
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a. $100 debit
b. $100 credit
c. $2,700 debit
d. $2,700 credit
10. During 2016, its first year of operations, Aida’s Bakery had revenues of 1/1
$65,000 and expenses of $35,000. The business had owner’s drawings of
$22,000. What is the amount of owner’s equity at December 31, 2016?
a. $22,000 debit
b. $8,000 credit
c. $0
d. $30,000 credit
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11. What is the total dollar amount of assets to be classified as current 0/1
assets?
a. $855,000
b. $600,000
c. $510,000
d. $435,000
Correct answer
a. $855,000
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12. What is the total dollar amount of assets to be classified as property, 1/1
plant, and equipment?
a. $990,000
b. $525,000
c. $735,000
d. $585,000
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a. $525,000
b. $0
c. $255,000
d. $465,000
Correct answer
b. $0
14. On a classified balance sheet, companies usually list current assets 1/1
a. in alphabetical order.
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a. Used for accounts that have both a debit and credit balance
d. The economic life of a business can be divided into artificial time periods.
17. If a business has received cash in advance of services performed and 1/1
credits a liability 1. account, the adjusting entry needed after the services
are performed will be:
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18. A law firm has billed their clients for services performed. They 0/1
subsequently received payments from their clients. What entry will the law
firm make upon receipt of the payments?
Correct answer
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20. Given the data below for a firm in its first year of operation, determine 1/1
net income under the accrual basis of accounting.
a. $11,750
b. $14,000
c. $9,500
d. $12,200
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21. La More Company had the following transactions during 20X1. 0/1
a. $10,350
b. $1,350
c. $9,850
d. $850
Correct answer
d. $850
22. The primary source used in the preparation of the financial statements 1/1
is the:
a. trial balance.
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23. Which of the following statements about the accrual basis of 1/1
accounting is False?
a. Events that change a company’s financial statements are recorded in the periods
in which the events occur.
24. On July 1 the Fisher Shoe Store paid $24,000 to Acme Realty for 6 0/1
months rent beginning July 1. Prepaid Rent was debited for the full
amount. If financial statements are prepared on July 31, the adjusting
entry to be made by the Fisher Shoe Store is:
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25. The Harris Company purchased equipment for $15,000 on December 1/1
1. It is estimated that annual depreciation on the computer will be $3,000.
If financial statements are to be prepared on December 31, the company
should make the following adjusting entry:
26. If a company fails to adjust an Unearned Rent Revenue account for 1/1
rent that has been recognized, what effect will this have on that month’s
financial statements?
c. balance sheet and income statement accounts have correct balances at the end
of an accounting period.
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28. Chris Harper earned a salary of $550 for the last week of January. She 0/1
will be paid on Feb 1. The adjusting entry for Chris’ employer at Jan 31 is:
a. Dr. Salaries and Wages Expense $550 ; Cr. Salaries and Wages Payable $550
d. No entry is required
Correct answer
a. Dr. Salaries and Wages Expense $550 ; Cr. Salaries and Wages Payable $550
c. Recording revenue as an adjusting entry on the last day of the accounting period.
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30. A law firm received $5,000 cash for legal services to be rendered in 1/1
the future. The full amount was credited to the liability account Unearned
Service Revenue. If the legal services have been rendered at the end of the
accounting period and no adjusting entry is made, this would cause
a. liabilities to be understated.
b. revenues to be understated
c. expenses to be overstated.
31. Wallowa Company purchased supplies costing $6,000 and debited 1/1
Supplies for the full amount. At the end of the accounting period, a physical
count of supplies revealed $1,800 still on hand. The appropriate adjusting
journal entry to be made at the end of the period would be
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32. At December 31, 2016, before any year-end adjustments, Obama 0/1
Company’s Insurance Expense account had a balance of $2,600 and its
Prepaid Insurance account had a balance of $7,600. It was determined that
$3,200 of the Prepaid Insurance had expired. The adjusted balance for
Insurance Expense for the year would be
a. $3,200.
b. $2,600
c. $5,800.
d. $4,400.
Correct answer
c. $5,800.
33. Boneta City College sold season tickets for the 2016 football season 0/1
for $250,000. A total of 8 games will be played during September, October
and November. In September, two games were played. In October, three
games were played. The balance in Unearned Ticket Revenue at October 31
is
a. $93,750.
b. $0.
c. $156,250
d. $50,000.
Correct answer
a. $93,750.
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35. SWC Bus Charter signed a four-month note payable in the amount of 1/1
$30,000 on September 1. The note requires interest at an annual rate of
5%. The amount of interest to be accrued at the end of September is
a. $500.
b. $125.
c. $200.
d. $1,500.
36. A business pays weekly salaries of $35,000 on Friday for a five-day 0/1
week ending on that day. The adjusting entry necessary at the end of the
fiscal period ending on a Wednesday is
a. debit Salaries and Wages Expense, $14,000; credit Salaries and Wages Payable,
$14,000.
b. debit Salaries and Wages Expense, $21,000; credit Salaries and Wages Payable,
$21,000.
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a. expense account.
c. liability account.
Correct answer
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40. After all the closing entries have been posted, the balance of the 1/1
income summary will be
d. zero.
42. The primary source used in the preparation of the financial 1/1
statements is the:
a. trial balance.
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a. Owner’s equity
b. Unearned Revenue
c. Cash
d. Owner’s dawings
Correct answer
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45. The following information is from the Income Statement of the M & J’s 1/1
CPA Firm.
46. At January 31, 2016, the balance in Bigelow Inc.’s supplies account 1/1
was $780. During February, Bigelow purchased supplies of $900 and used
supplies of $1,150. At the end of February, the balance in the supplies
account should be
a. $530 debit.
b. $1,030 debit.
c. $530 credit.
d. $830 debit.
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47. Boise Co. pays its employees twice a month, on the 7th and the 21st. 1/1
On June 21, Boise Co. paid employee salaries of $6,000. This transaction
would
d. be recorded by a $6,000 debit to Salaries and Wages Payable and a $6,000 credit
to Salaries and Wages Expense.
48. At September 1, 2016, Hotel Suites Co. reported owner’s capital of 0/1
$147,000. During the month, Hotel Suites generated revenues of $48,000,
incurred expenses of $26,000, purchased equipment for $5,000 and
withdrew cash of $3,000. What is the amount of owner’s capital at
September 30, 2016?
a. $161,000
b. $166,000
c. $169,000
d. $171,000
Correct answer
b. $166,000
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49. The income statement for the month of June, 2016 of Snap Shot, Inc. 0/1
contains the following information:
a. $30,700.
b. $36,000.
c. $38,000.
d. $43,300.
50. Cash was paid by Janer's Cleaning Service to creditors on account. 1/1
Which of the following entries for Janer's Cleaning Service records this
transaction?
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51. Gently Laser Clinic purchased laser equipment for $8,500, paid $2,250 1/1
down, with the remainder to be paid later. The correct entry would be
b. Debit Cash $2,250; debit Accounts Payable $6,250; credit Equipment $8,500
c. Debit Equipment Expense $8,500; credit Accounts Payable $2,250; credit Cash
$6,250.
d. Debit Equipment $8,500; credit Accounts Payable $6,250; credit Cash $2,250.
52. On September 10, MFP Co. paid employee salaries of $7,000 owed to 1/1
its employees last month. What are the effects of this transaction on the
accounting equation?
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53. Following are transactions of Gotebo Tanners, Inc., a new company, 1/1
during the month of January:
What was the total amount of Gotebo's liabilities following these six
transactions?
a. $12,300.
b. $27,300.
c. $22,600.
d. $15,500.
54. Following are transactions of Gotebo Tanners, Inc., a new company, 1/1
during the month of January:
a. One.
b. Two.
c. Three.
d. Four.
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55. How many of the following transactions would increase total liabilities 0/1
in the current period?
- Pay for advertising that will not occur until the following period.
a. One.
b. Two.
c. Three.
d. Four.
Correct answer
b. Two.
Correct answer
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57. A company received a bill for newspaper advertising services, $400. 1/1
The bill will be paid in 10 days. How would the transaction be recorded
today?
58. The following table contains financial information for Trumpeter Inc. 1/1
before closing entries:
a. $1,900.
b. $2,400.
c. $7,600.
d. $6,600.
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59. If Income Summary has a credit balance after revenues and expenses 1/1
have been closed into it, the closing entry for Income Summary will include
a
60. Eastwood Post Pavillion received a $650 check from a customer for 1/1
the balance due. The transaction was erroneously recorded as a debit to
Cash $560 and a credit to Service Revenue $560. The correcting entry is
a. debit Cash, $90 and Accounts Receivable, $560; credit Service Revenue, $650.
c. debit Accounts Receivable, $650; credit Cash, $90 and Service Revenue, $560.
d. debit Cash, $90 and Service Revenue, $560; credit Accounts Receivable,
$650.
b. prove the equality of the income statement account balances that are carried
forward into the next accounting period
c. prove the equality of the balance sheet account balances that are carried forward
into the next accounting period.
d. list all the balance sheet accounts in alphabetical order for easy reference.
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62. Which of the following steps in the accounting cycle may be 1/1
performed most frequently?
63. At the beginning of the year, Paradise Co. had an inventory of 1/1
$200,000. During the year, the company purchased goods costing
$900,000. Paradise Co reported ending inventory of $300,000 at the end of
the year. Their cost of goods sold is
a. $400,000
b. $1,400,000
c. $800,000
d. $1,000,000
64. Under the perpetual inventory system, in addition to making the entry 1/1
to record a sale, a company would
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65. Gross profit equals the difference between net sales and 1/1
a. operating expenses
b. net income
66. The entry for a buyer to record the return of goods under a perpetual 1/1
inventory system assuming the purchase was made on account would
include a
c. debit to inventory
67. Under the perpetual system, cash freight costs incurred by the buyer 1/1
for the transporting of goods is recorded in which account?
a. Freight Expense
b. Inventory
c. Freight-Out
d. Freight-In
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68. Cost of goods sold can be calculating by which of the following 1/1
formulas?
69. The entry to record a sale of $1,800 with terms of 2/10, n/30 will 1/1
include a
70. The entry to record the receipt of payment within the discount period 1/1
on a sale of $10,000 with terms of 3/15, n/60 will include a
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a. the account purchase returns and allowances is credited when goods are
returned to vendors.
Correct answer
72. In the credit terms of 3/15, n/60, the “15” represents the 1/1
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75. Maggie’s Market recorded the following events involving a recent 0/1
purchase of merchandise:
a. $47,930
b. $49,400
c. $48,900
d. $48,192
Correct answer
a. $47,930
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77. Honey Beez Company has the following picture. If Honey Beez 1/1
Company has 7,000 units on hand at December 31, the cost of ending
inventory under the average-cost method is:
a. $56,000.
b. $84,000.
c. $70,000.
d. $75,250.
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78. Harper Co. overstated its ending inventory by $3,500 on December 31, 0/1
2020. It did not correct the error in 2020 or in 2021. As a result, Harper Co's’
equity was
Correct answer
79. Didee has the following inventory information. Assuming that a 1/1
perpetual inventory system is used, what is the ending inventory on a FIFO
basis?
a. $5,860
b. $4,744
c. $4,940
d. $6,346
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80. Quayle Bookstore had 500 units on hand at January 1, costing $9 1/1
each. Purchases and sales during the month of January were as picture.
Quayle does not maintain perpetual inventory records. According to a
physical count, 360 units were on hand at January 31. The cost of the
inventory at January 31, under the FIFO method is:
a. $3,820
b. $3,240
c. $3,650
d. $4,100
Forms
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