Quiz 3
January 21, 2015
Name___________________________________
MULTIPLE CHOICE. Choose the one alternative that best answers the question.
1)
2)
Miller Motor Co. orders a car from the factory for a customer. When should
MMMC record revenue ?
.
When MMC delivers the car to the customer and the customer signs an
agreement to pay for the car on Feb. 21, 2015
A)
When MMC orders the c ar fr om the BM W factor y
C)
D)
E)
When MMC pays the BMW factor y for the c ar
When MMC c ollects the payment from the cus tomer on Feb. 21, 2015
Both deli ver y of the car and c ollecti on of the payment are nec ess ar y to r ecor d r evenue.
Measure the expenses, and recognize them in the same period in which any
related revenues are earned.
1) _______
2) _______
This is referred to as the
Expense recognition principle
3)
A)
Revenue pri ncipl e
C)
D)
E)
Comparability princi ple
Timeliness princi ple
Faithful repres entation princi ple
Which of the following statements is correct
We first record transactions in the journal then post them to the general
ledger
B)
C)
D)
E)
4)
We first rec ord trans acti ons in the g eneral ledger then rec ord them to the general journal
We first post trans acti ons in the gener al ledger then post them to the gener al journal
We first rec ord trans acti ons in the g eneral ledger then post them to the gener al journal
All of the above may be correct under di fferent circ umstances
What journal entry would Miller Motor Co. when Patricia Miller invests $25,000
in Miller Motor Co.
.
A)
Investments
C as h
Common s toc k
B)
25,000
25,000
25,000
Cash
25,000
25,000
Common stock
D)
Retained earni ngs
C as h
Cash
E)
25,000
25,000
25,000
25,000
Revenue
Which journal entry would Miller Motor Co. make when they purchase a
computer costing $73,500, on account? The computer is expected to last 3
years.
.
A)
Cash
Computer
Cash
C omputer expense
73,500
73,500
Cash
73,500
73,500
73,500
Computer
Accounts payable
Computer expense
73,500
73,500
73,500
Cash
6)
73,500
Which journal entry would Miller Motor Co. make on Jan. 21st when they
perform a front end alignment on a customer's car for $90. The customer
agrees to pay MMC on Feb. 15th.
.
Cash
6) _______
90
Ser vic e R evenue
90
Accounts receivable
Service Revenue
C)
Acc ounts rec ei vabl e
D)
Ser vic e R evenue
E)
Acc ounts rec ei vabl e
90
90
90
Unearned revenue
90
90
Cash
90
90
Cash
7)
5) _______
73,500
Equipment
B)
C)
E)
4) _______
25,000
Cash
5)
3) _______
90
On which financial statement(s) do Retained Earnings appear?
.
A)
B)
C)
D)
Inc ome statement
Statement of retained ear nings
Bal anc e sheet
Inc ome statement and statement of retai ned earni ngs
F)
Inc ome statement, statement of retai ned earni ngs and bal ance sheet
Statement of retained earnings and balance sheet
7) _______
8)
9)
Miller Motor Co. pays its employees $20,000 every Friday evening. December
31st fell on Tuesday this year. How much salary expense should MMC accrue
on Dec. 31st? How much liability should MMC record as of Dec. 31st?
'
$ 8,000 salary expense
$ 8,000 salary payable
A)
$
4,000 s alar y expens e
C)
D)
E)
$ 8,000 s alar y expens e
$ 12,000 s alar y expens e
$ 12,000 s alar y expens e
4,000 s alar y payabl e
$ 12,000 s alar y payabl e
$ 12,000 sal ar y payable
$
8,000 s alar y payabl e
Miller Motor Co. began the year with $270 in supplies. On March 30th, they
purchased additional supplies costing $720. On Dec. 31st, $300 worth of
supplies remain on hand. How much Supplies expense should MMC report for
the year? What should they report in their Supplies account on the Dec. 31st
balance sheet?
A)
B)
$
$
990 insur anc e expens e
720 insur anc e expens e
$
D)
E)
10)
$
$
$
270 insur anc e expens e
270 insur anc e expens e
$
$
$
0 s upplies expense
330 supplies expens e
445 supplies expens e
E)
$
990 s uppli es expens e
9) _______
$
0 pr epaid ins uranc e
$ 270 prepaid i ns urance
690 supplies expense
$ 300 supplies
$ 720 prepaid i ns urance
$ 990 prepaid i ns urance
On Jan. 1, 2014 Miller Motor Co. began the year with $990 in their Prepaid
Insurance account. The insurance policy will expire in 18 months on June 30,
2015. How much supplies expense should MMC report for the year ending
Dec. 31, 2014? What should they report in their supplies account as of Dec. 31,
2014?
..
.
$
660 insurance expense
$ 330 prepaid insurance
A)
B)
C)
8) _______
$ 990 s uppli es
$ 660 s uppli es
$ 445 s uppli es
$
0 s upplies
10) ______
1)
2)
3)
4)
5)
6)
7)
8)
9)
10)
B
B
A
C
D
B
E
B
C
D