Question

This questions are for MULTIPLE CHOICE and Calculation

REV #3 September 2008

1. Prepare the necessary journal entry to record the purchase of $100 of supplies on account:

2. The steps in an accounting cycle can be best described as:

1. Journalize, Post, prepare Unadjusted trial balance, prepare financial statements, close

2. Journalize, Post, prepare Unadjusted trial balance, prepare adjusting entries, prepare adjusted trial balance, prepare financial statements, close, prepare post closing trial balance

3. Analyze Transactions, Journalize, Post, prepare Unadjusted trial balance, prepare adjusted trial balance, prepare financial statements, close, prepare post closing trial balance

4. Analyze transactions, Journalize, Post, prepare Unadjusted trial balance, prepare adjusting entries, prepare adjusted trial balance, prepare financial statements, close, prepare post closing trial balance

3. Prepare the necessary adjusting journal entry. The work week starts on Monday and ends on Friday. The work day is 8 hours long. There are 5 employees. Each employee earns $100 per day. The month ends on a Tuesday. What adjusting journal entry is needed?

4. As part of the closing process for a sole proprietorship, the income summary has a debit to close all of the related expense accounts for $45,000 and a credit to close all of the related revenue accounts of $80,000.   What is needed to close the income summary account?

1. Debit income summary for $35,000

2. Debit income summary for 125,000

3. Credit income summary for $35,000

4. Credit income summary for $125,000

5. When preparing a worksheet, what would be the adjusted trial balance amount for the following account?

Account	Unadjusted Trial Balance		Adjustments		Adjusted Trial balance
	Debit	Credit	Debit	Credit	Debit	Credit
Prepaid Rent	$5,000			$1,500

1. $3,500 adjusted debit balance

2. $3,500 adjusted credit balance

3. $6,500 adjusted debit balance

4. $6,500 adjusted credit balance

6. On a worksheet, the unearned consulting revenue account has a $3,000 normal balance. When preparing the income statement columns on the worksheet, the unearned consulting revenue amount would be put into which column?

1. Debit Income Statement

2. Credit Income Statement

3. Debit Balance Sheet

4. Credit Balance Sheet

7. As you look at the bottom totals of the following worksheet, you see that it has not been completed. Does this company have a net income or a net loss and for how much?

Account	Income Statement		Balance Sheet & Statement of Owners Equity
	Debit	Credit	Debit	Credit
Totals	$56,000	$106,000	$450,000	$400,000
Net Income/Loss
Totals

1. Net Income $50,000

2. Net Income $162,000

3. Net Loss $50,000

4. Net Loss $162,000

8. The correct sequence order in which to prepare financial statements is:

1. Income statement, Balance sheet, Statement of Owners Equity

2. Balance Sheet, Statement of Owners Equity, Income Statement

3. Statement of Owners Equity, Income Statement, Balance Sheet

4. Income Statement, Statement of Owners Equity, Balance Sheet

5. Balance Sheet, Income Statement, Statement of Owners Equity

6. Statement of Owners Equity, Balance Sheet, Income Statement

9. When recording the sale of inventory that cost $700 in a perpetual inventory system, which of the following is needed?

1. Debit Inventory $700

2. Credit Inventory $700

3. Debit Inventory Purchases $700

4. Credit Cost of Goods Sold $700

10. Howe Company has the following inventory transactions during the month.

Beginning Inventory	50 units @ $10 unit cost
05/15 Purchase	100 units @ $12 unit cost
05/20 Sold	60 units
05/22 Purchase	50 units @ $13 unit cost
05/30 Sold	80 units

What is the value of the ending inventory using First In First out for a periodic Inventory System?    

1. $620

2. $770

3. $775

4. $780         

Answer 1