Exam 1 Study Guide

Midterm 1 Practice Questions (Acct 201 Fall 2012) 1. Retained earnings at the halt of the period is stir to a. retained earnings at the beginning of the period plus meshwork income minus liabilities. b. retained earnings at the beginning of the period plus net income minus dividends. c. net income. d. assets plus liabilities. 2. Pinson Company began the year with retained earnings of $550,000. During the year, the company recorded revenues of $600,000, expenses of $380,000, and paid dividends of $140,000. What was Pinsons retained earnings at the end of the year? a. 910,000 b. $630,000 c. $1,010,000 d. $480,000 3. Patent would appear in which balance sheet section? a. Intangible assets b. Investments c. Property, plant, and equipment d. Current assets 4. A balance sheet shows a. revenues, liabilities, and demarcationholders equity. b. expenses, dividends, and stockholders equity. c. revenues, expenses, and dividends. d. assets, liabilities, and stockholders equity. 5. For 2012 Fi elder Corporation inform net income of $30,000 net sales $400,000 and average share outstanding 12,000. There were no preferred stock dividends.What was the 2012 earnings per share? a. $2. 33 b. $0. 40 c. $33. 33 d. $2. 50 6. Use the following data to determine the total dollar amount of assets to be classified as current assets. Koonce tycoon Supplies Balance tack December 31, 2012 Cash$ 130,000Accounts Payable$ 140,000 postpaid Insurance60,000Salaries Payable20,000 Accounts Receivable100,000Mortgage Payable 160,000 Inventory 140,000 thorough Liabilities$320,000 Land held for Investment150,000 Land180,000 Buildings$200,000Common Stock$240,000 Less AccumulatedRetained internet 500,000Depreciation(40,000)160,000 Total Stockholders Equity$740,000 Trademarks 140,000 Total Liabilities and Total Assets$1,060,000 Stockholders Equity$1,060,000 a. $580,000. b. $430,000. c. $360,000. d. $290,000. 7. Using the following balance sheet and income statement data, what is the total amount o f working capital? Current assets$ 14,000Net income$ 24,000 Current liabilities8,000Stockholders equity42,000 number assets 80,000Total liabilities18,000 Total assets 60,000 Average common shares outstanding was 10,000 a. $ 2,000 b. $14,000 . $ 4,000 d. $ 6,000 8. Stockholders equity is increased by a. dividends. b. revenues. c. expenses. d. liabilities. 9. McKinney Corporation had beginning retained earnings of $2,292,000 and ending retained earnings of $2,499,000. During the year they issued common stock totaling $141,000. What was their net income for the year? a. $207,000 b. $ 66,000 c. $348,000 d. $273,000 10. The purchase of an asset by paying cash a. increases assets and stockholders equity. b. increases assets and liabilities. c. decreases assets and increases liabilities. d. eaves total assets unchanged. 11. Which of the following accounts has a normal calculate balance? a. Accounts Payable b. Prepaid Rent c. Retained Earnings d. Common Stock 12. When a company has perfor med a service but has not yet received payment, it a. debits accounts receivable and attribute revenue from services. b. debits revenue from services and sources accounts receivable. c. debits revenue from services and credits accounts payable. d. pee-pees no entry until the cash is received. 13. When a company receives a utility history but testament not pay it right away, it should . debit Utilities Expense and credit Accounts Receivable. b. debit Utilities Expense and credit Accounts Payable. c. debit Accounts Payable and credit Utilities Expense. d. make no entry until the bill is paid. 14. In a service-type business, revenue is considered earned a. at the end of the month. b. at the end of the year. c. when the service is performed. d. when cash is received. 15. The following is selected info from L Corporation for the fiscal year ending October 31, 2011. Cash received from customers $300,000 Revenue earned 370,000Cash paid for expenses 170,000 Cash paid for computers on November 1, 2010 that will be used for 3 years 48,000 Expenses incurred including any depreciation 216,000 Proceeds from a bank loan, part of which was used to pay for the computers 100,000 Based on the assemblage basis of accounting, what is L Corporations net income for the year ending October 31, 2011? a. $184,000 b. $154,000 c. $152,000 d. $170,000 16. Boyce Company purchased office supplies costing $5,000 and debited Office Supplies for the full amount.At the end of the accounting period, a physical count of office supplies revealed $1,400 still on hand. The appropriate adjusting journal entry to be made at the end of the period would be a. debit Office Supplies Expense, $3,600 credit Office Supplies, $3,600. b. debit Office Supplies, $1,400 credit Office Supplies Expense, $1,400. c. debit Office Supplies Expense, $1,400 credit Office Supplies, $1,400. d. debit Office Supplies, $3,600 credit Office Supplies Expense, $3,600. 17. On January 1, 2010, Leardon Inc. urchased equipm ent for $45,000. The company is depreciating the equipment at the rate of $600 per month. At January 31, 2010, the adjusting entry would be in Accumulated Depreciation is a. debit Accumulated Depreciation $600 b. credit Accumulated Depreciation $600 c. cebit Equipment $600 d. credit Depreciation Expense $600 18. The closing entry process consists of closing a. all asset and liability accounts. b. out the Retained Earnings account. c. all permanent accounts. d. all temporary accounts.