Question 1

The income statement for the year ended December 31,2014 will show

Accepted Answer

A)  Total Revenue of $57,500.
B)  Total Expenses of $39,000.
C)  Total Revenue of $55,000.
D)  Total Expenses of $50,000.E) A) and D)
F) All of the above

Question 2

What is the amount of Law Services Revenue to be reported on the Income Statement for the year 2013?

Accepted Answer

A)  $19,000
B)  $22,000
C)  $24,000
D)  $17,000E) A) and B)
F) All of the above

Question 3

An increase in revenue will always:

Accepted Answer

A)  increase stockholders' equity.
B)  increase assets.
C)  decrease stockholders' equity.
D)  decrease assets.E) A) and D)
F) C) and D)

Question 4

Recording the above transactions would include which of the following?

Accepted Answer

A)  Transaction #1 would include a debit to Revenue.
B)  Transaction #3 would include a debit to Accounts Receivable.
C)  Transaction #4 would include a debit to Accounts Receivable.
D)  Transaction #6 would include a debit to Unearned Revenue.E) A) and B)
F) None of the above

Question 5

As a result of these transactions,the cash account will increase by:

Accepted Answer

A)  $9,700.
B)  $13,200.
C)  $2,200.
D)  $7,200.E) C) and D)
F) A) and C)

Question 6

The Fastbank Motorcycle Service Company (FMSC) wins a $10 million bid to provide the repair service for a recall on a popular brand of motorcycles.No money is exchanged.The repairs are expected to take place next quarter.How will these events affect the balance sheet?

Accepted Answer

A)  Accounts Receivable will increase by $10 million this quarter and Inventories will decrease next quarter.
B)  Both Accounts Receivable and Accounts Payable will increase by $10 million this quarter.
C)  Both Accounts Receivable and Stockholders' Equity will increase by $10 million this quarter.
D)  These events will not impact the balance sheet this quarter.E) All of the above
F) C) and D)

Question 7

If a company receives the rent for January 2014 from a tenant in December 2013,this will be reported as:

Accepted Answer

A)  revenue in 2013.
B)  an expense in 2013.
C)  a liability in 2013.
D)  stockholders' equity in 2013.E) A) and B)
F) B) and C)

Question 8

Which of the following is not true about the financial statements of Dudley Do-Right Repair Shop?

Accepted Answer

A)  The balance sheet at December 31,2013 will show Total Liabilities of $10,500.
B)  The balance sheet at December 31,2013 will show Retained earnings of $68,700.
C)  The Income Statement for the year will not include the dividends of $48,000.
D)  The Income Statement for the year will show Total Revenue of $175,000.E) A) and D)
F) A) and B)

Question 9

A company has total revenue of $560,000 and total expenses of $330,000.If the company overstates sales by $10,000,how would the net profit margin be affected?

Accepted Answer

A)  Net profit margin would be overstated.
B)  Net profit margin would be understated.
C)  Net profit margin would be unaffected.
D)  Net profit margin cannot be computed because overstating sales is unethical.E) None of the above
F) B) and D)

Question 10

If accounts receivable has a beginning balance of $4,210 and an ending balance of $3,495,and collections on account were $9,600,how much were credit sales?

Accepted Answer

A)  $8,885
B)  $17,305
C)  $10,315
D)  $1,895E) A) and B)
F) A) and C)

Question 11

A credit of $500 to Equipment was mistakenly credited to Revenue.What is the effect of this error?

Accepted Answer

A)  Equipment is understated and Revenue is understated.
B)  Equipment is overstated and Revenue is overstated.
C)  Equipment is overstated and Revenue is understated.
D)  Equipment is understated and Revenue is overstated.E) A) and B)
F) All of the above

Question 12

What is the amount of Total Assets at December 31?

Accepted Answer

A)  $16,500
B)  $22,000
C)  $17,350
D)  $13,500E) C) and D)
F) B) and D)

Question 13

A company does not need to record the receipt of a bill for utilities used during this year if they will not pay for it until next year.

Accepted Answer

A) True 
 B)False

Question 14

On October 10,a company paid $12,000 to its suppliers,of which $2,000 was for supplies received on October 10 and $10,000 was for supplies received and recorded during September.The $12,000 payment would be recorded as a:

Accepted Answer

A)  $10,000 debit to Supplies,a $2,000 debit to Accounts Payable,and a $12,000 credit to Cash.
B)  $12,000 debit to Supplies and a $12,000 credit to Cash.
C)  $12,000 debit to Supplies Expense and a $12,000 credit to Cash.
D)  $2,000 debit to Supplies,a $10,000 debit to Accounts Payable,and a $12,000 credit to Cash.E) All of the above
F) A) and D)

Question 15

This month,a company recorded sales revenue of $50,000 from sales of goods to customers who agreed to pay later.Next month,the company received payment from customers of $45,000.Choose the TRUE statement.

Accepted Answer

A)  Revenue for this month is $45,000.
B)  Accounts receivable at the end of next month is $5,000.
C)  Accounts Payable at the end of this month is $5,000.
D)  Revenue for next month will be $45,000.E) None of the above
F) A) and D)

Question 16

The Rainbow House Painting Company has been contracted to strip,repair,prime and paint a house for $3,600 to be paid in installments as phases of the work are completed.Rainbow should recognize the revenue when

Accepted Answer

A)  the work begins.
B)  the first payment is received.
C)  half of the work is complete and half of the payments have been received.
D)  the work is complete.E) A) and D)
F) None of the above

Question 17

What the amount of total expense to be reported on the Income Statement for the month of January?

Accepted Answer

A)  $3,750
B)  $7,900
C)  $8,150
D)  $4,500E) All of the above
F) A) and C)

Question 18

What is the amount of Revenue for July?

Accepted Answer

A)  $5,300
B)  $5,700
C)  $4,300
D)  $7,200E) A) and B)
F) B) and D)

Question 19

Which one of the following statements regarding the debit/credit processing of revenues and expenses is true?

Accepted Answer

A)  Debits reduce expenses.
B)  The total credits recorded in revenue accounts must equal the total debits recorded in expense accounts.
C)  Across all revenue accounts,the total value of all debits must equal the total value of all credits.
D)  Credits increase revenues.E) B) and D)
F) B) and C)

Question 20

Which of the following groups of accounts contains only those that normally have credit balances?

Accepted Answer

A)  Accounts Payable;Retained Earnings;Service Revenue.
B)  Equipment;Cash;Contributed Capital.
C)  Notes Payable;Wages Payable;Rent Expense.
D)  Accounts Receivable,Retained Earnings,Cash.E) A) and B)
F) A) and C)

Exam 3: The Income Statement

A company has total revenue of $560,000 and total expenses of $330,000.If the company overstates sales by $10,000,how would the net profit margin be affected?

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Which of the following is not true about the financial statements of Dudley Do-Right Repair Shop?

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Which of the following groups of accounts contains only those that normally have credit balances?

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The Rainbow House Painting Company has been contracted to strip,repair,prime and paint a house for $3,600 to be paid in installments as phases of the work are completed.Rainbow should recognize the revenue when

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The income statement for the year ended December 31,2014 will show

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If accounts receivable has a beginning balance of $4,210 and an ending balance of $3,495,and collections on account were $9,600,how much were credit sales?

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What the amount of total expense to be reported on the Income Statement for the month of January?

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As a result of these transactions,the cash account will increase by:

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An increase in revenue will always:

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This month,a company recorded sales revenue of $50,000 from sales of goods to customers who agreed to pay later.Next month,the company received payment from customers of $45,000.Choose the TRUE statement.

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If a company receives the rent for January 2014 from a tenant in December 2013,this will be reported as:

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A credit of $500 to Equipment was mistakenly credited to Revenue.What is the effect of this error?

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A company does not need to record the receipt of a bill for utilities used during this year if they will not pay for it until next year.

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On October 10,a company paid $12,000 to its suppliers,of which $2,000 was for supplies received on October 10 and $10,000 was for supplies received and recorded during September.The $12,000 payment would be recorded as a:

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What is the amount of Total Assets at December 31?

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Recording the above transactions would include which of the following?

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What is the amount of Law Services Revenue to be reported on the Income Statement for the year 2013?

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What is the amount of Revenue for July?

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The Fastbank Motorcycle Service Company (FMSC) wins a $10 million bid to provide the repair service for a recall on a popular brand of motorcycles.No money is exchanged.The repairs are expected to take place next quarter.How will these events affect the balance sheet?

Correct AnswerverifiedShow Answer

Which one of the following statements regarding the debit/credit processing of revenues and expenses is true?

Correct AnswerverifiedShow Answer

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