ACC 301 -S1 2018 Extra Credit (20 points) Please review the ACC 213 material before completing this assignment. You can earn a total of 20 points for this assignment and these points will be counted as extra-credit points towards your final course grade. Completed assignment should be submitted to the Assignments folder on the Blackboard course site before 8 am on Monday August 28. No late submissions will be accepted. Clearly highlight/circle the best answer 1. Which of the following elements are found on the income statement? a. Cash b. Accounts receivable c. Common stock d. Retained earnings e. Salaries expense 2. Which of the following elements are found on the balance sheet? a. Service revenue. b. Net income. c. Operating activities. d. Utilities expense. e. Retained earnings. 3. Generally Accepted Accounting Principles: a. focus on the review of a situation. b. are not applicable to financial statements in the US. c. do not apply to public corporations. d. intend to improve the decision usefulness of the information on the financial statements. e. oversees the Security and Exchange Commission.
4. Which of the following is the primary purpose of accounting? a. To establish a business. b. To measure and communicate information related to business transactions. c. To earn a large profit. d. To reduce taxes owed for the business. e. To establish credit for a company. 5. A collection of all accounts showing a list of transactions affecting each account and account balance for each account is called a: a. Journal b. T- Account c. Income statement d. Trial balance e. General ledger 6. A list of all accounts used by a company and the identification number assigned to each account is a: a. General ledger b. Journal c. Trial balance d. Chart of accounts e. General Journal 7. Which of the following statements is incorrect? a. The normal balance of accounts receivable is a debit. b. The normal balance of dividends is a debit. c. The normal balance of unearned revenues is a credit. d. The normal balance of an expense account is a credit. e. The normal balance of common stock is a credit.
8. Of the following accounts, which account will increase with a credit: a. Cash b. Office Equipment c. Sales Salaries Payable d. Dividends e. Sales Salaries Expense 9. An account used to record the owners' investments in the business is called: a. Dividends b. Common Stock c. Revenue d. Expense e. Liability 10. Unearned revenues are: a. Revenues that have been earned and received in cash. b. Revenues that have been earned but not yet collected in cash. c. Liabilities created when a customer pays in advance for products or services before the revenue is earned. d. Recorded as an asset in the accounting records. e. Increases to retained earnings. 11. The Fireside Country Inn is a very popular destination for tourists. The Inn requires guests to make reservations at least two months in advance of their stay. A 20 percent down payment is required at the time the reservation is made. When should this inn recognize room rental revenue? a. On the date the reservation is received. b. On the date the money for the reservation is received. c. On the date the guests stay in the inn. d. On the date the guests pay the remaining 80 percent due. e. Once all cash has been received.
12. Which of the following is the appropriate journal entry if a company hires a new employee? a. Debit to Cash, credit to Wages Revenue. b. No entry should be made. c. Debit to Wages Expense, credit to Cash. d. Debit to Cash, credit to Wages Expense. e. Debit to Wages Payable, credit to Wages Expense. 13. The system of preparing financial statements based on recognizing revenues when the cash is received and reporting expenses when the cash is paid is called: a. Accrual basis accounting. b. Operating cycle accounting. c. Cash basis accounting. d. Revenue recognition accounting. e. Current basis accounting. 14. These transactions were completed by the art gallery opened by Zed Bennett. a. Bennett started the gallery, Artery, by investing $40,000 cash and equipment valued at $18,000 in exchange for common stock. b. Purchased $70 of office supplies on credit. c. Paid $1,200 cash for the receptionist's salary. d. Sold a painting for an artist and collected a $4,500 cash commission on the sale. e. Completed an art appraisal and billed the client $200. What was the balance of the cash account after these transactions were posted? a. $12,230 b. $12,430 c. $43,300 d. $43,430 e. $61,430
15. Management Services, Inc. provides services to clients. On May 1, a client prepaid Management Services $60,000 for a six-month contract in advance. Management Services' journal entry to record this transaction on May 1 will include a: a. Debit to Unearned Management Fees (Unearned revenue) for $60,000. b. Credit to Management Fees Earned (Revenue) for $60,000. c. Credit to Cash for $60,000. d. Credit to Unearned Management Fees (Unearned revenue) for $60,000. e. Debit to Management Fees Earned (Revenue) for $60,000. 16. If beginning retained earnings was $184,300, net income for the period was $200,000 and ending retained earnings was $322,000, what was the total amount of dividend distributed for the period? a. $62,300 b. $306,300 c. $337,700 d. $706,300 e. $137,700 17. The assets of a company total $700,000; the liabilities, $200,000. What are the total claims of the owners? a. $900,000 b. $700,000 c. $500,000 d. $200,000 e. It is impossible to determine unless the amount of owners' investment is known.
18. When cash payments are made to stockholders, what is the effect on the company's accounts? a. Cash decreases and dividends increase. b. Cash increases and dividends decrease. c. Cash decreases and common stock decreases. d. Cash increases and common stock increases. e. None of the above. 19. The following financial information is from Shovels Construction Company: Accounts Payable $15,000 Buildings 80,000 Cash 10,500 Accounts Receivable 9,500 Sales Tax Payable 4,500 Retained Earnings 47,500 Supplies 40,000 Notes Payable (due in 18 months) 35,000 Interest Payable 3,000 Common Stock 35,000 What is the amount of current assets, assuming the accounts above reflect normal activity? a. $20,000. b. $60,000. c. $140,000. d. $175,000. e. $95,000.
20. The following table contains financial information for Trumpeter Inc. before closing entries: Cash $12,000 Supplies 4,500 Prepaid Rent 2,000 Salary Expense 4,500 Equipment 65,000 Service Revenue 30,000 Miscellaneous Expenses 20,000 Dividends 3,000 Accounts Payable 5,000 Common Stock 68,000 Retained Earnings 8,000 What is Trumpeter's net income? a. $3,500. b. $2,500. c. $5,000. d. $5,500. e. $30,000