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1) a trial balance proves
a.the mathematical equality of debits and credits after the posting process.
b.the ledger is posted correctly.
c.that all transactions have been recorded correctly.
d.that all transactions have been posted.
2) which of the following is least likely to help a company minimize losses as credit
standards are relaxed?
a.require potential customers to provide bank guarantees
b.ask a potential customer for references regarding payment history
c.increase the estimate of uncollectible accounts at the end of each period
d.check a potential customer's credit rating
3) sielert corporation borrowed $600,000 from national bank on may 31, 2011. the
three-year, 7% note required annual payments of $228,630 beginning may 31, 2012.
interest expense for the year ended december 31, 2011 was
a.$24,500
b.$28,000
c.$42,000
d.$0
4) the agency of the united states government that oversees the u.s. financial markets is
the
a.internal revenue service
b.security exchange commission
c.financial accounting standards board
d.international auditing standards committee
5) internal controls are not designed to safeguard assets from
a.natural disasters
b.employee theft
c.robbery
d.unauthorized use
6) *john jones company has 20,000 shares of $100 par value common stock. assuming
that the proper journal entry was made to record a 5% common stock dividend on the
declaration date when the market value of the stock was $135, which of the following
accounts would be debited when the stock dividend is distributed?
a.retained earnings
b.dividends payable
c.common stock dividends distributable
d.paid-in capital in excess of par value
7) a company using a perpetual inventory system that returns goods previously
purchased on credit would
a.debit accounts payable and credit inventory
b.debit sales and credit accounts payable
c.debit cash and credit accounts payable
d.debit accounts payable and credit purchases
8) gibson company recorded the following cash transactions for the year:
paid $180,000 for salaries.
paid $80,000 to purchase office equipment.
paid $20,000 for utilities.
paid $8,000 in dividends.
collected $300,000 from customers.
what was gibsons net cash provided by operating activities?
a.$100,000
b.$20,000
c.$120,000
d.$92,000
9) which account will have a zero balance after closing entries have been journalized
and posted?
a.service revenue
b.advertising supplies
c.prepaid insurance
d.accumulated depreciation
10) of the following employees, who should prepare the bank reconciliation?
a.anne, the bookkeeper, because she is aware of all transactions that affected cash
b.michael, the treasurer, because he has control of the checkbook and has taken more
accounting courses than any other employee
c.mary, the cashier, because she does not pay bills
d.frank, the purchasing agent, because he does not work in the accounting department
11) the number of shares of issued stock equals
a.unissued shares minus authorized shares
b.outstanding shares plus treasury shares
c.authorized shares minus treasury shares
d.outstanding shares plus authorized shares
12) a plant asset with a cost of $180,000 and accumulated depreciation of $171,000 is
sold for $21,000. what is the amount of the gain or loss on disposal of the plant asset?
a.$21,000 loss
b.$12,000 loss
c.$12,000 gain
d.$21,000 gain
13) land improvements should be depreciated over the useful life of the
a.land
b.buildings on the land
c.land or land improvements, whichever is longer
d.land improvements
14) the trial balance for greenway corporation appears as follows:
if as of december 31, 2011, rent of $120 for december had not been recorded or paid,
the adjusting entry would include a:
a.credit to accumulated rent for $120
b.credit to cash for $120
c.debit to rent payable for $120
d.debit to rent expense for $120
