Question

5.     On June 1, 2008, Delbert Inc. reported a cash balance of $12,000. During June, Delbert made deposits of $3,000 and made disbursements totalling $16,000. What is the cash balance at the end of June?

a.   $1,000 debit balance

b.   $15,000 debit balance

c.   $1,000 credit balance

d.   $4,000 credit balance

    6.     At January 1, 2008, Burton Industries reported owner’s equity of $130,000. During 2008, Burton had a net income of $30,000 and owner drawings of $20,000. At December 31, 2008, the amount of owner’s equity is

a.   $130,000.

b.   $140,000.

c.   $100,000.

d.   $80,000.

    7.     Able Company pays its employees twice a month, on the 7^th and the 21^st. On June 21, Able Company paid employee salaries of $5,000. This transaction would

a.   decrease net income for the month by $5,000.

b.   increase owner’s equity by $4,000.

c.   decrease the balance in Salaries Expense by $4,000.

d.   be recorded by a $4,000 debit to Salaries Payable and a $4,000 credit to Salaries Expense.

    8.     In the first month of operations for Pocket Industries, the total of the debit entries to the cash account amounted to $9,000 ($5,000 investment by the owner and revenues of $4,000). The total of the credit entries to the cash account amounted to $5,000 (purchase of equipment $2,000 and payment of expenses $3,000). At the end of the month, the cash account has a(n)

a.   $2,000 credit balance.

b.   $2,000 debit balance.

c.   $3,000 credit balance.

d.   $4,000 debit balance.

9.         Denton Company showed the following balances at the end of its first year:

Cash                                                        $ 7,000

Prepaid insurance                                           700

Accounts receivable                                     3,500

Accounts payable                                        2,800

Notes payable                                              4,200

Denton, Capital                                            1,400

Denton, Drawing                                             700

Revenues                                                   21,000

Expenses                                                   17,500

What did Denton Company show as total credits on its trial balance?

a.$30,100

b.$29,400

c.$28,700

d.$30,800

10.     Cerner Company showed the following balances at the end of its first year:

Cash                                                        $ 5,000

Prepaid insurance                                           500

Accounts receivable                                     2,500

Accounts payable                                        2,000

Notes payable                                              3,000

Cerner, Capital                                             1,000

Cerner, Drawing                                              500

Revenues                                                   15,000

Expenses                                                   12,500

What did Cerner Company show as total credits on its trial balance?

a.   $21,500

b.   $21,000

c.   $20,500

d.   $22,000

11.       During February 2008, its first month of operations, the owner of Rutwing Enterprises invested cash of $25,000. Rutwing had cash revenues of $4,000 and paid expenses of $7,000. Assuming no other transactions impacted the cash account, what is the balance in Cash at February 28?

a.   $3,000 credit

b.   $22,000 debit

c.   $29,000 debit

d.   $18,000 credit

12.     At January 31, 2008, the balance in Prieto Inc.’s supplies account was $250. During February, Prieto purchased supplies of $300 and used supplies of $400. At the end of February, the balance in the supplies account should be

a.   $250 debit.

b.   $350 credit.

c.   $950 debit.

d.   $150 debit.

13.     At December 1, 2008, Marco Company’s accounts receivable balance was $1,200. During December, Marco had credit revenues of $5,000 and collected accounts receivable of $4,000. At December 31, 2008, the accounts receivable balance is

a.   $1,200 debit.

b.   $2,200 debit.

c.   $6,200 debit.

d.   $2,200 credit.

14.       The following is selected information from J Corporation for the fiscal year ending October 31, 2008.

Cash received from customers                                                          $300,000

Revenue earned                                                                                   380,000

Cash paid for expenses                                                                        170,000

Cash paid for computers on November 1, 2007 that will be used

   for 3 years (annual depreciation is $16,000)                                      48,000

Expenses incurred, not including any depreciation                              200,000

Proceeds from a bank loan, part of which was used to pay for

     the computers                                                                                  100,000

Based on the accrual basis of accounting, what is J Corporation’s net income for the year ending October 31, 2008?

Use the following information for questions 15–16.

Sheepskin Company had the following transactions during 2008.

Sales of $5,500 on account

Collected $2,225 for services to be performed in 2009

Paid $600 cash in salaries

Purchased airline tickets for $255 in December for a trip to take place in 2009

15.     What is Sheepskin’s 2008 net income using accrual accounting?

a.   $3,875

b.   $5,875

c.   $4,900

d.   $3,625

16.     What is Sheepskin’s 2008 net income using cash basis accounting?

Answer 1

5)
	Cash Balance At Beginning			$           12,000
	Add: Deposit			$             3,000
	Less: Disburment			$         -16,000
	Balance At End			$           -1,000
	Credit Balance = $1000
	Corret Option : C
6)	Balance At Beginning			$       1,30,000
	Add: Net Income			$           30,000
	Less: Drawings			$         -20,000
	Balance At End			$       1,40,000
	Correct Option: b
7)	Correct Option: a
	It has recorded salaries expenses $5000
	Therefore decrease in the net income by $5000
8)	Total Debit		$         9,000
	Less: Total Credit		$         5,000
	Net , Debit		$         4,000
	Correct Option: d
9)	total credis on it trial balance
	Accounts payable		$         2,800
	Notes payable		$         4,200
	Denton, Capital		$         1,400
	Revenues		$       21,000
	Total		$       29,400
	Correct Option: b