ACCT 5301 Boot Camp
Homework, Modules 2 and 4
Select the best answer for each question, then place the answer in the space provided.
You may use your class notes and other resources; these questions will be helpful study aids
for the final exam.
____1. The account titled “Accounts Receivable” would appear on which of the following
statements?
A. Balance sheet, as a current asset
B. Balance sheet as an investment
C. Income statement, as an expense
D. Income statement, as a revenue
E. Balance sheet, as a current liability
For the next 7 questions, indicate the classification of the following accounts in the financial
statements (i.e., where would the account first appear in the financial statements?). Note to
students: you should be able to do this classification for any of the accounts discussed in your text
in the first 4 chapters.
Use the following choices to indicate your answer:
A. Balance Sheet – Asset
B. Balance Sheet – Liability
C. Equity: Income Statement – Revenue
D. Equity: Income Statement – Expense
E. None of the Above (some other place in the financials)
____2. Depreciation Expense
____3. Cost of Goods Sold
____4. Prepaid Insurance
____5. Dividends
____6. Unearned Revenues
____7. Fees Earned
____8. Common Stock
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____9. Which of the following statements is correct?
A. When a future expense is paid in advance, the payment is normally recorded in a liability
account called Prepaid Expense.
B. Promises of future payment from the company to its creditors are called Accounts
Receivable.
C. Increases and decreases in cash are always recorded in the stockholders’ equity account.
D. An account called Land is commonly used to record the liability owed for the purchase of the
land.
E. Current liabilities include Unearned Revenues.
For the next 10 questions, indicate the normal balance for the account. Indicate your answer with
one of the following options:
DR (normal debit balance)
CR (normal credit balance)
____10. Mortgage Payable
____11. Prepaid Insurance
____12. Accumulated Depreciation
____13. Supplies Expense
____14. Service Revenue
____15. Unearned Revenue
____16. Dividends
____17. Common Stock
____18. Equipment
____19.Cash
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The following information is for the next four questions. The balances relate to Cordova Company
at the end of 2009 (its first year of activity).
Wages expense
$
2,300
Merchandise Inventory
2,500
Property, plant & equipment
11,000
Dividends
1,000
Sales revenue
10,200
Wages payable
200
Accounts payable
2,300
Cost of goods sold
2,500
Cash
1,800
Accounts receivable
3,000
Rent Expense
1,200
Notes payable (long-term)
3,000
Common stock
9,800
Interest expense
200
Accumulated depreciation
500
Depreciation expense
500
____20.Determine Net Income for Cordova Company for 2009:
A. $3,500
B. $2,500
C. $3,000
D. $4,500
____21.Determine the balance for Total Assets on the balance sheet at December 31, 2009
A. $19,300
B. $17,800
C. $27,800
D. $21,800
____22.Determine the balance for Total Liabilities on the balance sheet at December 31, 2009
A. $5,500
B. $3,000
C. $13,500
D. $8,500
____23.Determine the balance for Retained Earnings on the balance sheet at December 31, 2009
A. –0B. $13,300
C. $3,500
D. $2,500
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____24.The journal entry to record the collection of $100 on accounts receivable would be:
A.
Accounts Receivable
100
Cash
100
B.
Accounts Receivable
100
Revenue
100
C.
Cash
100
Accounts Receivable
100
D.
Cash
100
Revenue
100
____25.The journal entry to recognize $1,000 of commissions earned but not collected would
include:
A.
a debit to Commissions Revenue for 1,000
B.
a credit to Unearned Commissions Revenue for 1,000
C.
a debit to Cash for 1,000
D.
a debit to Accounts Receivable for 1,000
____26.True or false: The ending balance in Retained Earnings shows the total cash that has been
retained in the company.
A. True
B. False
____27. Which of the following statements regarding financial statements is correct (select the best
answer)?
A.
The balance sheet represents activities at a point in time
B.
The income statement represents activities for a period of time
C.
Both (A) and (B) are correct
D.
Neither (A) nor (B) are correct
____28. Llano Company purchased land costing $30,000, by paying cash of $5,000 and issuing a
note for the balance. The journal entry to record this transaction would be:
A. Land
Cash
30,000
5,000
Notes Payable
35,000
B. Land
Cash
Notes Payable
30,000
C. Cash
Notes Payable
Land
5,000
25,000
D. Notes Payable
Cash
Land
30,000
5,000
25,000
30,000
5,000
25,000
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____29. Llano Company paid cash dividends of $3,000. The journal entry to record this transaction
would include
A.
a debit to Dividends for $3,000
B.
a debit to Dividends Expense for $3,000
C.
a debit to Dividends Revenue for $3,000
D.
a debit to Cash for $3,000
____30.The Prepaid Insurance account, before the 2007 adjusting journal entries, showed a balance of
$2,000. An analysis of the insurance policies showed that $400 of unexpired benefits remain on the
policies at December 31. The adjusting journal entry to reflect this information would be:
A.
Prepaid Insurance
1,600
Insurance Expense
1,600
B.
C.
D.
Insurance Expense
Prepaid Insurance
1,600
1,600
Prepaid Insurance
Insurance Expense
400
Insurance Expense
Prepaid Insurance
400
400
400
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