Deck 2: Processing Accounting Information

Question 1

The most important source documents used in analyzing transactions are a firm's general journal and general ledger.

Answer 1

False

Question 2

Two examples of source documents are a seller's invoice and a bank deposit slip.

Answer 2

True

Question 3

A general journal has three amount columns: a debit column, a credit column, and a balance column.

Answer 3

False

Question 4

A journal is a record of original entry which presents chronologically, and in one place, the total effect of a business transaction.

Question 5

A compound journal entry involves at least three accounts.

Question 6

Posting is the process of transferring the debits and credits of each journal entry to the appropriate general ledger accounts.

Question 7

Posting is the process of formally recording a business transaction in the appropriate journal.

Question 8

Which of the following is one effect of a purchase of $600 of supplies on credit?

A) It would decrease liabilities by $600
B) It would decrease cash assets by $600
C) It would increase liabilities by $600
D) It would decrease retained earnings $600

Question 9

The Cash T-account of Rainbow, Inc. has a beginning balance of $52,000. During the year, $244,000 was debited and $241,000 was credited to the account. What is the ending balance of cash?

A) $55,000
B) $37,000
C) ($ 5,000)
D) Cannot be determined from the information given

Question 10

The Cash T-account of Firefly, Inc. has a beginning balance of $156,000. During the year, $732,000 was debited and $723,000 was credited to the account. What is the ending balance of cash?

A) $111,000
B) ($ 15,000)
C) $165,000
D) Cannot be determined from the information given

Question 11

If the beginning Cash account balance of Crossbow, Inc. was $36,800, the ending balance was $20,400, and total cash received during the period was $88,000, what amount of cash was paid out during the period?

A) $ 3,600
B) $ 84,800
C) $104,400
D) $ 71,600

Question 12

If the beginning Cash account balance of Firefly, Inc. was $110,400, the ending balance was $61,200, and total cash received during the period was $264,000, what amount of cash was paid out during the period?

A) $ 313,200
B) $ 214,800
C) $ 25,800
D) $ 254,850

Question 13

If the beginning Cash account balance of Crossbow, Inc. was $20,000, the ending balance was $33,600, and the total cash paid out during the period was $64,000, what amount of cash was received during the period?

A) $ 74,400
B) $ 77,600
C) $ 9,600
D) $ 93,600

Question 14

If the beginning Cash account balance of Firefly, Inc. was $60,000, the ending balance was $100,800, and the total cash paid out during the period was $192,000, what amount of cash was received during the period?

A) $280,800
B) $223,200
C) $232,800
D) $ 28,800

Question 15

Beginning and ending Cash account balances of Crossbow, Inc. were $19,000 and $8,000, respectively. If total cash received during the period was $37,000, what amount of cash was paid out during the period?

A) $ 48,000
B) $ 30,000
C) $ 46,000
D) $ 53,000

Question 16

Beginning and ending Cash account balances of Firefly, Inc. were $57,000 and 24,000, respectively. If total cash received during the period was $111,000, what amount of cash was paid out during the period?

A) $159,000
B) $144,000
C) $ 90,000
D) $138,000

Question 17

Beginning and ending Cash account balances of Crossbow, Inc. were $14,000 and $32,000 respectively. If total cash paid out during the period was $30,000, what amount of cash was received during the period?

A) $ 24,000
B) $ 48,000
C) $ 40,000
D) $ 36,000

Question 18

Beginning and ending Cash account balances of Firefly, Inc. were $42,000 and $96,000 respectively. If total cash paid out during the period was $90,000, what amount of cash was received during the period?

A) $ 108,000
B) $ 72,000
C) $ 144,000
D) $ 120,000

Question 19

Which of the following is not true of the general journal?

A) It is a record of original entry
B) It reflects the entire effect of a transaction in one place
C) It receives postings of dollar amounts from the general ledger
D) It shows transactions recorded in chronological order

Question 20

Which of the following is true of a chart of accounts?

A) It is the same thing as a trial balance
B) It shows the account title and numerical code of all general ledger accounts
C) It lists accounts in alphabetical order
D) The first accounts listed are the revenue accounts

Question 21

A company incurred $60,000 (to be paid next year) for the current year's advertising activities.
What would the effect of this transaction on the current year's accounting equation?

A) No effect on Assets; $60,000 decrease in Liabilities; $60,000 increase in Stockholders' Equity
B) $60,000 increase in Assets; $60,000 increase in Liabilities; No effect on Stockholders' Equity
C) $60,000 increase in Assets; No effect on Liabilities; $60,000 increase in Stockholders' Equity
D) No effect on Assets; $60,000 increase in Liabilities; $60,000 decrease in Stockholders' Equity

Question 22

A company incurred $180,000 (to be paid next year) for the current year's advertising activities.
What would the effect of this transaction on the current year's accounting equation?

A) No effect on Assets; $180,000 decrease in Liabilities; $180,000 increase in Stockholders' Equity
B) $180,000 increase in Assets; $180,000 increase in Liabilities; No effect on Stockholders' Equity
C) $180,000 increase in Assets; No effect on Liabilities; $180,000 increase in Stockholders' Equity
D) No effect on Assets; $180,000 increase in Liabilities; $180,000 decrease in Stockholders' Equity

Question 23

A company incurred $40,000 (to be paid next year) for the current year's insurance coverage.
What would the effect of this transaction on the current year's accounting equation?

A) No effect on Assets; $40,000 decrease in Liabilities; $40,000 increase in Stockholders' Equity
B) $40,000 increase in Assets; $40,000 increase in Liabilities; No effect on Stockholders' Equity
C) $40,000 increase in Assets; No effect on Liabilities; $40,000 increase in Stockholders' Equity
D) No effect on Assets; $40,000 increase in Liabilities; $40,000 decrease in Stockholders' Equity

Question 24

A company incurred $120,000 (to be paid next year) for the current year's insurance coverage.
What would the effect of this transaction on the current year's accounting equation?

A) No effect on Assets; $120,000 decrease in Liabilities; $120,000 increase in Stockholders' Equity
B) $120,000 increase in Assets; $120,000 increase in Liabilities; No effect on Stockholders' Equity
C) $120,000 increase in Assets; No effect on Liabilities; $120,000 increase in Stockholders' Equity
D) No effect on Assets; $120,000 increase in Liabilities; $120,000 decrease in Stockholders' Equity

Question 25

To take advantage of a zero percent rent increase for the coming year, a company paid, at year-end, $150,000 rent for the first three months of the next year.
What would the effect of this transaction on the company's year-end accounting equation?

A) No effect on Assets; $150,000 decrease in Liabilities; $150,000 increase in Stockholders' Equity
B) $150,000 increase in Assets; $150,000 increase in Liabilities; No effect on Stockholders' Equity
C) $150,000 increase in Assets; No effect on Liabilities; $150,000 increase in Stockholders' Equity
D) No effect on Assets; No effect on Liabilities; No effect on Stockholders' Equity

Question 26

To take advantage of a zero percent rent increase for the coming year, a company paid, at year-end, $450,000 rent for the first three months of the next year.
What would the effect of this transaction on the company's year-end accounting equation?

A) No effect on Assets; $450,000 decrease in Liabilities; $450,000 increase in Stockholders' Equity
B) $450,000 increase in Assets; $450,000 increase in Liabilities; No effect on Stockholders' Equity
C) $450,000 increase in Assets; No effect on Liabilities; $450,000 increase in Stockholders' Equity
D) No effect on Assets; No effect on Liabilities; No effect on Stockholders' Equity

Question 27

A company received a $24,000 payment for services to be performed over the next few months.
What would the effect of this transaction on the current year's accounting equation?

A) No effect on Assets; $24,000 decrease in Liabilities; $24,000 increase in Stockholders' Equity
B) $24,000 increase in Assets; $24,000 increase in Liabilities; No effect on Stockholders' Equity
C) $24,000 increase in Assets; No effect on Liabilities; $24,000 increase in Stockholders' Equity
D) No effect on Assets; $24,000 increase in Liabilities; $24,000 decrease in Stockholders' Equity

Question 28

A company received a $72,000 payment for services to be performed over the next few months.
What would the effect of this transaction on the current year's accounting equation?

A) No effect on Assets; $72,000 decrease in Liabilities; 72,000 increase in Stockholders' Equity
B) $72,000 increase in Assets; $72,000 increase in Liabilities; No effect on Stockholders' Equity
C) $72,000 increase in Assets; No effect on Liabilities; $72,000 increase in Stockholders' Equity
D) No effect on Assets; $72,000 increase in Liabilities; $72,000 decrease in Stockholders' Equity

Question 29

A company received $11,000 cash in exchange for 200 shares of the company's common stock.
What would the effect of this transaction on the current year's accounting equation?

A) No effect on Assets; $11,000 decrease in Liabilities; $11,000 increase in Stockholders' Equity
B) $11,000 increase in Assets; $11,000 increase in Liabilities; No effect on Stockholders' Equity
C) $11,000 increase in Assets; No effect on Liabilities; $11,000 increase in Stockholders' Equity
D) No effect on Assets; $11,000 increase in Liabilities; $11,000 decrease in Stockholders' Equity

Question 30

A company received $33,000 cash in exchange for 200 shares of the company's common stock.
What would the effect of this transaction on the current year's accounting equation?

A) No effect on Assets; $33,000 decrease in Liabilities; $33,000 increase in Stockholders' Equity
B) $33,000 increase in Assets; $33,000 increase in Liabilities; No effect on Stockholders' Equity
C) $33,000 increase in Assets; No effect on Liabilities; $33,000 increase in Stockholders' Equity
D) No effect on Assets; $33,000 increase in Liabilities; $33,000 decrease in Stockholders' Equity

Question 31

To meet its cash flow needs, a company obtained a 6 month bank loan in the amount of $10,000. Annual interest on the loan (note payable) is 10%, payable when the note is due.
What would the effect of this transaction on the company's current month accounting equation?

A) No effect on Assets; $10,000 decrease in Liabilities; $10,000 increase in Stockholders' Equity
B) $10,000 increase in Assets; $10,000 increase in Liabilities; No effect on Stockholders' Equity
C) $10,000 increase in Assets; No effect on Liabilities; $10,000 increase in Stockholders' Equity
D) No effect on Assets; $10,000 increase in Liabilities; $10,000 decrease in Stockholders' Equity

Question 32

To meet its cash flow needs, a company obtained a 6 month bank loan in the amount of $30,000. Annual interest on the loan (note payable) is 10%, payable when the note is due.
What would the effect of this transaction on the company's current month accounting equation?

A) No effect on Assets; $30,000 decrease in Liabilities; $30,000 increase in Stockholders' Equity
B) $30,000 increase in Assets; $30,000 increase in Liabilities; No effect on Stockholders' Equity
C) $30,000 increase in Assets; No effect on Liabilities; $30,000 increase in Stockholders' Equity
D) No effect on Assets; 30,000 increase in Liabilities; $30,000 decrease in Stockholders' Equity

Question 33

At the beginning of the month, a company purchased a new truck for $45,000, paying $21,000 cash and agreeing to pay the balance over 12 months through a no-interest financing offer provided by the car dealer. The entry to record the purchase of the truck is recorded at month-end.
What would the effect of this transaction on the company's current month-end accounting equation? (Hint: First financing payment was made before current month-end.)

A) No effect on Assets; $45,000 decrease in Liabilities; $45,000 increase in Stockholders' Equity
B) $22,000 increase in Assets; $22,000 increase in Liabilities; No effect on Stockholders' Equity
C) $45,000 increase in Assets; No effect on Liabilities; $45,000 increase in Stockholders' Equity
D) No effect on Assets; $24,000 increase in Liabilities; $24,000 decrease in Stockholders' Equity

Question 34

At the beginning of the month, a company purchased a new truck for $135,000, paying $63,000 cash and agreeing to pay the balance over 12 months through a no-interest financing offer provided by the car dealer. The entry to record the purchase of the truck is recorded at month-end.
What would the effect of this transaction on the company's current month-end accounting equation? (Hint: First financing payment was made before current month-end.)

A) No effect on Assets; $135,000 decrease in Liabilities; $135,000 increase in Stockholders' Equity
B) $66,000 increase in Assets; $66,000 increase in Liabilities; No effect on Stockholders' Equity
C) $135,000 increase in Assets; No effect on Liabilities; $135,000 increase in Stockholders' Equity
D) No effect on Assets; $72,000 increase in Liabilities; $72,000 decrease in Stockholders' Equity

Question 35

A company performed $8,635 of services and received $3,000 in cash with the remaining amount to be paid in 60 days with no interest.
What would the effect of this transaction on the company's current month-end accounting equation?

A) $3,000 increase in Assets; $5,635 decrease in Liabilities; $8,635 increase in Stockholders' Equity
B) $8,635 increase in Assets; $8,635 increase in Liabilities; No effect on Stockholders' Equity
C) $5,635 increase in Assets; No effect on Liabilities; $5,635 increase in Stockholders' Equity
D) $8,635 increase in Assets; No effect on Liabilities; $8,635 increase in Stockholders' Equity

Question 36

A company performed $25,905 of services and received $9,000 in cash with the remaining amount to be paid in 60 days with no interest.
What would the effect of this transaction on the company's current month-end accounting equation?

A) $9,000 increase in Assets; $16,905 decrease in Liabilities; $25,905 increase in Stockholders' Equity
B) $25,905 increase in Assets; $25,905 increase in Liabilities; No effect on Stockholders' Equity
C) $16,905 increase in Assets; No effect on Liabilities; $16,905 increase in Stockholders' Equity
D) $25,905 increase in Assets; No effect on Liabilities; $25,905 increase in Stockholders' Equity

Question 37

A company paid employee wages of $24,000 for the month.
What would the effect of this transaction on the current month's accounting equation?

A) No effect on Assets; $24,000 decrease in Liabilities; $24,000 increase in Stockholders' Equity
B) $24,000 increase in Assets; $24,000 increase in Liabilities; No effect on Stockholders' Equity
C) $24,000 decrease in Assets; No effect on Liabilities; $24,000 decrease in Stockholders' Equity
D) $24,000 decrease in Assets; $24,000 decrease in Liabilities; No effect on Stockholders' Equity

Question 38

A company paid employee wages of $72,000 for the month.
What would the effect of this transaction on the current month's accounting equation?

A) No effect on Assets; $72,000 decrease in Liabilities; $72,000 increase in Stockholders' Equity
B) $72,000 increase in Assets; $72,000 increase in Liabilities; No effect on Stockholders' Equity
C) $72,000 decrease in Assets; No effect on Liabilities; $72,000 decrease in Stockholders' Equity
D) $72,000 decrease in Assets; $72,000 decrease in Liabilities; No effect on Stockholders' Equity

Question 39

A company received payment of $10,000 from a customer that had previously received services performed on account.
What would the effect of this transaction on the company's current month accounting equation?

A) No effect on Assets; No effect on Liabilities; No effect on Stockholders' Equity
B) $10,000 increase in Assets; $10,000 increase in Liabilities; No effect on Stockholders' Equity
C) $10,000 increase in Assets; No effect on Liabilities; $10,000 increase in Stockholders' Equity
D) No effect on Assets; $10,000 increase in Liabilities; $10,000 decrease in Stockholders' Equity

Question 40

A company received payment of $30,000 from a customer that had previously received services performed on account.
What would the effect of this transaction on the company's current month accounting equation?

A) No effect on Assets; No effect on Liabilities; No effect on Stockholders' Equity
B) $30,000 increase in Assets; $30,000 increase in Liabilities; No effect on Stockholders' Equity
C) $30,000 increase in Assets; No effect on Liabilities; $30,000 increase in Stockholders' Equity
D) No effect on Assets; $30,000 increase in Liabilities; $30,000 decrease in Stockholders' Equity

Question 41

A company paid a cash dividend of $24,000 to stockholders.
What would the effect of this transaction on the current month's accounting equation?

A) No effect on Assets; $24,000 decrease in Liabilities; $24,000 increase in Stockholders' Equity
B) $24,000 increase in Assets; $24,000 increase in Liabilities; No effect on Stockholders' Equity
C) $24,000 decrease in Assets; No effect on Liabilities; $24,000 decrease in Stockholders' Equity
D) $24,000 decrease in Assets; $24,000 decrease in Liabilities; No effect on Stockholders' Equity

Question 42

A company paid a cash dividend of $72,000 to stockholders.
What would the effect of this transaction on the current month's accounting equation?

A) No effect on Assets; $72,000 decrease in Liabilities; $72,000 increase in Stockholders' Equity
B) $72,000 increase in Assets; $72,000 increase in Liabilities; No effect on Stockholders' Equity
C) $72,000 decrease in Assets; No effect on Liabilities; $72,000 decrease in Stockholders' Equity
D) $72,000 decrease in Assets; $72,000 decrease in Liabilities; No effect on Stockholders' Equity

Question 43

Anisha Company had a transaction that caused a $30,000 increase in both assets and liabilities. This transaction could have been a(n):

A) Purchase of office equipment for $44,000, paying $14,000 cash and issuing a note payable for the balance
B) Investment of $30,000 cash in the business by the stockholders
C) Purchase of office equipment for $30,000 cash
D) Repayment of a $30,000 bank loan

Question 44

Li Company had a transaction that caused a $90,000 increase in both assets and liabilities. This transaction could have been a(n):

A) Purchase of office equipment for $132,000, paying $42,000 cash and issuing a note payable for the balance
B) Investment of $90,000 cash in the business by the stockholders
C) Purchase of office equipment for $90,000 cash
D) Repayment of a $90,000 bank loan

Question 45

Didwania Company had a transaction that caused a $40,000 decrease in both assets and liabilities. This transaction could have been a(n):

A) Purchase of office equipment for $54,000, paying $14,000 cash and issuing a note payable for the balance
B) Investment of $40,000 cash in the business by the stockholders
C) Purchase of office equipment for $40,000 cash
D) Repayment of a $40,000 bank loan

Question 46

Aashish Company had a transaction that caused a $120,000 decrease in both assets and liabilities. This transaction could have been a(n):

A) Purchase of office equipment for $162,000, paying $42,000 cash and issuing a note payable for the balance
B) Investment of $120,000 cash in the business by the stockholders
C) Purchase of office equipment for $120,000 cash
D) Repayment of a $120,000 bank loan

Question 47

Sayali Company had a transaction that caused a $50,000 increase in both assets and stockholders' equity. This transaction could have been a(n):

A) Purchase of office equipment for $64,000, paying $14,000 cash and issuing a note payable for the balance
B) Investment of $50,000 cash in the business by the stockholders
C) Purchase of office equipment for $50,000 cash
D) Repayment of a $50,000 bank loan

Question 48

Xia Company had a transaction that caused a $150,000 increase in both assets and stockholders' equity. This transaction could have been a(n):

A) Purchase of office equipment for $192,000, paying $42,000 cash and issuing a note payable for the balance
B) Investment of $150,000 cash in the business by the stockholders
C) Purchase of office equipment for $150,000 cash
D) Repayment of a $150,000 bank loan

Question 49

Howie Company had a transaction that had no effect on assets, liabilities, or on stockholders' equity. This transaction could have been a(n):

A) Purchase of office equipment for $74,000, paying $14,000 cash and issuing a note payable for the balance
B) Investment of $60,000 cash in the business by the stockholders
C) Purchase of office equipment for $60,000 cash
D) Repayment of a $60,000 bank loan

Question 50

Fernando Company had a transaction that had no effect on assets, liabilities, or on stockholders' equity. This transaction could have been a(n):

A) Purchase of office equipment for $222,000, paying $42,000 cash and issuing a note payable for the balance
B) Investment of $180,000 cash in the business by the stockholders
C) Purchase of office equipment for $180,000 cash
D) Repayment of a $180,000 bank loan

Question 51

A transaction caused a $200,000 increase in both assets and total liabilities. This transaction could have been:

A) Purchase for office equipment for $200,000 cash
B) Repayment of a $200,000 bank loan
C) Investment of $200,000 cash in the business by the owner
D) Purchase of office equipment for $240,000, paying $40,000 cash and issuing a note payable for the balance

Question 52

A transaction caused a $600,000 increase in both assets and total liabilities. This transaction could have been:

A) Purchase for office equipment for $600,000 cash
B) Repayment of a $600,000 bank loan
C) Investment of $600,000 cash in the business by the owner
D) Purchase of office equipment for $720,000, paying $120,000 cash and issuing a note payable for the balance

Question 53

Suzanne Mi, starting her own business, made an investment of a building to the company. The building is valued at $400,000 with a $360,000 outstanding mortgage payable.
The effect of this transaction on the accounting equation of the business would be to:

A) Increase assets by $40,000
B) Increase assets by $360,000
C) Increase stockholders' equity by $40,000
D) Increase stockholders' equity by $400,000

Question 54

Bob Smith, starting his own business, made an investment of a building to the company. The building is valued at $1,200,000 with a $1,080,000 outstanding mortgage payable.
The effect of this transaction on the accounting equation of the business would be to:

A) Increase assets by $120,000
B) Increase assets by $1,080,000
C) Increase stockholders' equity by $120,000
D) Increase stockholders' equity by $1,200,000

Question 55

During its first month of operations, Lavender Company (1) borrowed $600,000 from a bank, and then (2) purchased an equipment costing $240,000 by paying cash of $120,000 and signing a long term note for the remaining amount. During the month, the company also (3) purchased inventory for $180,000 on credit, (4) performed services for clients for $360,000 on account, (5) paid $90,000 cash for accounts payable, and (6) paid $180,000 cash for utilities.
What is the amount of total assets at the end of the month?

A) $990,000
B) $570,000
C) $810,000
D) $750,000

Question 56

During its first month of operations, Saturn Company (1) borrowed $200,000 from a bank, and then (2) purchased an equipment costing $80,000 by paying cash of $40,000 and signing a long term note for the remaining amount. During the month, the company also (3) purchased inventory for $60,000 on credit, (4) performed services for clients for $120,000 on account, (5) paid $30,000 cash for accounts payable, and (6) paid $60,000 cash for utilities.
What is the amount of total liabilities at the end of the month?

A) $190,000
B) $270,000
C) $250,000
D) $330,000

Question 57

During its first month of operations, Lavender Company (1) borrowed $600,000 from a bank, and then (2) purchased an equipment costing $240,000 by paying cash of $120,000 and signing a long term note for the remaining amount. During the month, the company also (3) purchased inventory for $180,000 on credit, (4) performed services for clients for $360,000 on account, (5) paid $90,000 cash for accounts payable, and (6) paid $180,000 cash for utilities.
What is the amount of total liabilities at the end of the month?

A) $990,000
B) $570,000
C) $810,000
D) $750,000

Question 58

During its first month of operations, Neptune Company (1) borrowed $200,000 from a bank, and then (2) purchased an equipment costing $80,000 by paying cash of $40,000 and signing a long term note for the remaining amount. During the month, the company also (3) purchased inventory for $60,000 on credit, (4) performed services for clients for $120,000 on account, (5) paid $30,000 cash for accounts payable, and (6) paid $60,000 cash for utilities.
What is the amount of Stockholders' equity at the end of the month?

A) ($ 60,000)
B) $ 90,000
C) $ 60,000
D) $180,000

Question 59

During its first month of operations, Lavender Company (1) borrowed $600,000 from a bank, and then (2) purchased an equipment costing $240,000 by paying cash of $120,000 and signing a long term note for the remaining amount. During the month, the company also (3) purchased inventory for $180,000 on credit, (4) performed services for clients for $360,000 on account, (5) paid $90,000 cash for accounts payable, and (6) paid $180,000 cash for utilities.
What is the amount of Stockholders' equity at the end of the month?

A) $240,000
B) $180,000
C) $210,000
D) $360,000

Question 60

Mr. Montana started a company (Montana Company) by contributing $100,000 cash, and a building valued at $800,000. The company then purchased a machine by making a $100,000 down payment (which accounted for half its purchase price), and signed a note payable to the bank.
After recording the above transactions, Montana Company's balance sheet will show:
Assets Liabilities Stockholders' Equity

A) $ 920,000 $ 60,000 $860,000
B) $ 900,000 $100,000 $800,000
C) $1,000,000 $900,000 $100,000
D) $1,000,000 $100,000 $900,000

Question 61

Ken Baar started a company (Baar Company) by contributing $300,000 cash, and a building valued at $2,400,000. The company then purchased a machine by making a $300,000 down payment (which accounted for half its purchase price), and signed a note payable to the bank.
After recording the above transactions, Larson Company's balance sheet will show:
Assets Liabilities Stockholders' Equity

A) $2,760,000 $ 180,000 $2,580,000
B) $2,700,000 $ 300,000 $2,400,000
C) $3,000,000 $2,700,000 $ 300,000
D) $3,000,000 $ 300,000 $2,700,000

Question 62

On December 31, 2019, the end of the first month of operation, the balance sheet of Drake's Driving School reported total assets of $400,000. The following transactions occurred during the month of January 2020:
(1) The business purchased land for $500,000, paying $200,000 cash and issuing a note payable for the balance.
(2) The business collected accounts receivable totaling $90,000.
(3) The business sold land (which had cost $100,000) for $120,000 cash.
(4) The business paid off $100,000 of Notes Payable.
What is the amount of the company's total assets on January 31, 2020?

A) $920,000
B) $620,000
C) $910,000
D) $730,000

Question 63

On December 31, 2019, the end of the first month of operation, the balance sheet of Michaelene's Real Estate Training School reported total assets of $1,200,000. The following transactions occurred during the month of January 2020:
(1) The business purchased land for $1,500,000, paying $600,000 cash and issuing a note payable for the balance.
(2) The business collected accounts receivable totaling $270,000.
(3) The business sold land (which had cost $300,000) for $360,000 cash.
(4) The business paid off $300,000 of Notes Payable.
What is the amount of the company's total assets on January 31, 2020?

A) $2,190,000
B) $2,760,000
C) $1,860,000
D) $2,730,000

Question 64

On February 1 2019 Cibula's Accounting Services had a cash balance of $10,000, and completed the following transactions during February 2019:
1) Purchased office supplies on account, $600.
2) Completed work for a client on credit, $1,000.
3) Paid cash for the office supplies purchased in (1).
4) Completed work for a client and received $1,600 cash.
5) Received $1,000 cash for the work described in (2).
6) Received $2,000 from a client for accounting services to be performed in March.
What was the balance of the company's cash account after these transactions?

A) $ 4,000
B) $ 5,000
C) $14,000
D) $ 3,400

Question 65

On February 1 2019, Zultner's Accounting Services had a cash balance of $30,000, and completed the following transactions during February 2019:
1) Purchased office supplies on account, $1,800.
2) Completed work for a client on credit, $3,000.
3) Paid cash for the office supplies purchased in (1).
4) Completed work for a client and received $4,800 cash.
5) Received $3,000 cash for the work described in (2).
6) Received $6,000 from a client for accounting services to be performed in March.
What was the balance of the company's cash account after these transactions?

A) $10,200
B) $12,000
C) $15,000
D) $42,000

Question 66

When Holly received her paycheck, she realized that her employer made an error in computing her wages, and overpaid her by $2,600. So, Holly promptly returned the excess amount.
When the employer receives a check from her for the amount of the overpayment, which of the following journal entries will be made by the employer?

A) Debit Cash $2,600 and credit Wages Expense $2,600
B) Debit Wages Expense $2,600 and credit Cash $2,600
C) Debit Cash $2,600 and credit Wages Payable $2,600
D) Debit Wages Payable $2,600 and credit Wages Expense $2,600

Question 67

When Trina received her paycheck, she realized that her employer made an error in computing her wages, and overpaid her by $7,800. So, Trina promptly returned the excess amount.
When the employer receives a check from her for the amount of the overpayment, which of the following journal entries will be made by the employer?

A) Debit Wages Payable $7,800 and Credit Wages Expense $7,800
B) Debit Cash $7,800 and Credit Wages Expense $7,800
C) Debit Wages Expense $7,800 and Credit Cash $7,800
D) Debit Cash $7,800 and Credit Wages Payable $7,800

Question 68

Lambchop Company purchased supplies for $14,000 on credit on January 1, 2019. On January 15, the company made a cash payment of $4,000 to the supplier and signed a one-year note for the remaining amount to settle the account.
Lambchop Company's journal entry on January 15 will include:

A) Debit Notes Payable for $10,000
B) Credit Accounts Payable for $10,000
C) Credit Notes Payable for $10,000
D) Debit Cash for $10,000

Question 69

Xia Company purchased supplies for $42,000 on credit on January 1, 2019. On January 15, the company made a cash payment of $12,000 to the supplier, and signed a one-year note for the remaining amount to settle the account.
Xia Company's journal entry on January 15 will include:

A) Debit Cash for $30,000
B) Debit Notes Payable for $30,000
C) Credit Accounts Payable for $30,000
D) Credit Notes Payable for $30,000

Question 70

Lumos Pet Supplies had the following transactions during December 2019:
•Paid a note of $34,000, owed since March, plus $850 for interest.
•Sold $73,050 of merchandise to customers on account. Cost of goods sold was $42,500.
[Hint: Cost of goods sold is an expense related to the reduction of inventory (merchandise sold).]
•Paid accounts payable of $4,100.
As a result of these transactions, at year-end, liabilities and stockholders' equity would show a combined total:

A) Decrease by $ 9,600
B) Increase by $ 26,850
C) Decrease by $ 9,150
D) Decrease by $ 8,400

Question 71

Mouser Pet Supplies had the following transactions during December 2019:
•Paid a note of $102,000, owed since March, plus $2,550 for interest.
•Sold $219,150 of merchandise to customers on account. Cost of goods sold was $127,500. [Hint: Cost of goods sold is an expense related to the reduction of inventory (merchandise sold).]
•Paid accounts payable of $12,300.
As a result of these transactions, at year-end, liabilities and stockholders' equity would show a combined total:

A) Decrease by $ 25,200
B) Increase by $ 28,800
C) Decrease by $ 80,550
D) Decrease by $ 27,450

Question 72

During January 2019, Randolph Corporation purchased $200,000 of inventory; they paid one-fourth in cash, and signed a note for the remaining balance.
This transaction will be recorded as:

A)
B)
C)
D)

Question 73

During January 2019, Dakota Corporation purchased $600,000 of inventory; they paid one-fourth in cash, and signed a note for the remaining balance.
This transaction will be recorded as:

A)
B)
C)
D)

Question 74

Horizon Company, an internet service provider, has 2,000,000 customers. The customers make electronic payments of $140 each for that month's service on the last day of each month. Horizon Company does not send any bills to their customers.
The company's journal entry on the day they receive the payment will include:

A) A credit to Internet Service Revenue for $280,000,000
B) A debit to Accounts Receivable for $280,000,000
C) A credit to Accounts Receivable for $280,000,000
D) A debit to Internet Service Expense for $280,000,000

Question 75

Vista Company, an internet service provider, has 2,000,000 customers. The customers make electronic payments of $420 each for that month's service on the last day of each month. Buena Company does not send any bills to their customers.
The company's journal entry on the day they receive the payment will include:

A) A debit to Internet Service Expense for $840,000,000
B) A credit to Internet Service Revenue for $840,000,000
C) A debit to Accounts Receivable for $840,000,000
D) A credit to Accounts Receivable for $840,000,000

Question 76

A customer received and then paid an $18,000 utility bill from West Haven Natural Gas Company. The journal entry by West Haven Natural Gas Company to record receipt of the payment would include:

A) A credit to Accounts Payable
B) A credit to Accounts Receivable
C) A credit to Utilities Revenue
D) A debit to Accounts Receivable

Question 77

Ringstar Company purchased a new car for $60,000 by paying $24,000 cash, and trading in an old car with a recorded net cost and market value of $20,000. They also signed a Note for $16,000.
The required journal entry will not:

A) Debit New Car for $60,000
B) Debit Notes Payable for $16,000
C) Credit Old Car for $20,000
D) Credit Notes Payable for $16,000

Question 78

Stone Circle Company purchased a new car for $135,000 by paying $54,000 cash, and trading in an old car with a recorded net cost and market value of $45,000. They also signed a Note for $36,000.
The required journal entry will not:

A) Credit Notes Payable for $36,000
B) Debit New Car for $135,000
C) Debit Notes Payable for $36,000
D) Credit Old Car for $45,000

Question 79

During the current week, Julissa, (1) received a cash payment for services previously billed to one of her clients. Also, she (2) paid her telephone bill, and (3) bought equipment on credit.
For the three separate transactions, at least one of the journal entries will include a:

A) Credit to Retained Earnings
B) Debit to Notes Payable
C) Debit to Accounts Receivable
D) Credit to Accounts Receivable

Question 80

Hannibal Company's Accounts Payable account had a balance of $7,400 on September 1, 2019, and a balance of $9,000 on September 30, 2019. During September 2019, the company made total payments of $65,600 on accounts payables.
What must have been their total purchases on account during September 2019.

A) $74,600
B) $58,200
C) $67,200
D) $64,000