a.

1. Which of the following is not an asset:

a. Accounts Payable
b. Furnishing and Equipment
c. Supplies
d. Cash
b.
2. Amy Co. acquired $500 worth of supplies on credit. Which of the following
journal entries would be recorded?
a. Debit supplies, credit cash
b. Debit cash, credit supplies
c. Debit supplies, credit accounts payable
d. Debit accounts payable, credit supplies payable
c.
3. Baker Company earned $10,000 revenue for services provided. Which of the
following is correct?
a. Baker would credit Revenue.
b. Baker would debit Revenue.
c. Baker must first collect the revenue before recognizing it.
d. Baker would credit an asset.
d.
e.
4. Candy Company collected $5,000 from a customer on account. What journal
entry will Candy Company record?
a. Debit cash, credit accounts receivable
b. Debit cash, credit revenue
c. Debit accounts receivable, credit revenue
d. Debit accounts receivable, credit cash
e. None of the above
f.
g.
5. Ernie Corporation capitalized a $20,000 automobile. Which of the following is
mostly likely true?
a. Ernie recorded a liability for $20,000.
b. Ernie recorded an asset for $20,000.
c. Ernie recorded an expense for $20,000.
d. Ernie recorded revenue for $20,000.
h.
i.
j. 6. Liabilities are generally classified on a balance sheet as
k. a. small liabilities and large liabilities.
l. b. present liabilities and future liabilities.
m. c. tangible liabilities and intangible liabilities.
n. d. current liabilities and long-term liabilities.
o.
p.

q. 7.

Office equipment is classified on the balance sheet as

r. a. a current asset.
s. b. property, plant, and equipment.
t. c. an intangible asset.
u. d. a long-term investment.
v.
w. Use the following information to answer questions 812:
x. Benton Office Supplies
y. Balance Sheet
z. December 31, 2007
aa.
ab. Cash
$ 65,000
ac. Prepaid Insurance 30,000
ad. Accounts Receivable50,000
ae. Inventory
70,000
af. Land held for investment75,000
ag. Land
90,000
ah. Building$100,000
ai. Less Accumulated
aj.
Depreciation (20,000)
$370,000
ak. Trademark
70,000
al. Total Assets
$530,000

am.
an.

aw.

bg.

Accounts Payable
Salaries Payable
Mortgage Payable
Total Liabilities

$ 70,000
10,000
80,000
$160,000

Common Stock
$120,000
Retained Earnings
250,000
80,000
Total stockholders equity
Total Liabilities and
Stockholders Equity

$530,000

8. The total dollar amount of assets to be classified as current assets is

ao. a. $290,000.
ap.b. $215,000.
aq. c. $180,000.
ar. d. $145,000.
as.
at. = $65,000 + $30,000 + $50,000 + $70,000
au.= $215,000
av.
9. The total dollar amount of assets to be classified as property, plant,
and equipment is
ax. a. $320,000.
ay. b. $170,000.
az. c. $245,000.
ba. d. $190,000.
bb.
bc.= $90,000 + ($100,000 - $20,000)
bd.
be.= $170,000
bf.
10. The total dollar amount of assets to be classified as investments is

bh. a.
bi. b.
bj. c.
bk. d.
bl.
bm.

$0.
$150,000.
$75,000.
$180,000.

11. The total amount of working capital is

bn. a.
$135,000.
bo. b. $295,000.
bp. c. $75,000.
bq. d. $60,000.
br.
bs.= $65,000 + $30,000 + $50,000 + $70,000 ($70,000 + $10,000)
bt.
bu. = $135,000
bv.
bw.
12. The current ratio is
bx. a. 1.94 : 1.
by. b. 1.57 : 1.
bz. c. 3.14 : 1.
ca. d. 2.69 : 1.
cb.
cc. = $215,000 / $80,000
cd.
ce. = 2.69
cf.
cg.
ch.
ci.13.
Which of the following is a measure of liquidity?
a. Working capital
b. Profit margin
c. Earnings per share
d. Debt to equity ratio
cj.
ck.14. Current assets divided by current liabilities is known as the
cl. working capital.
cm. current ratio.
cn. profit margin.
co. capital structure.
cp.
15.State the accounting equation:
a. Assets + Liabilities = Equity
b. Assets + Equity = Liabilities
c. Assets = Liabilities Equity
d. Assets = Liabilities + Equity
cq.
16.On which of the following financial statements would you expect to find

revenues and expenses?

a. Balance Sheet
b. Income Statement
c. Statement of Cash Flows
d. Statement of Changes in Equity
cr.
17.On which of the following financial statements would you expect to find
financing, operating, and investing activities?
a. Balance Sheet
b. Income Statement
c. Statement of Cash Flows
d. Statement of Changes in Equity
cs.
18.On which of the following financial statements would you expect to find
assets, liabilities, and stockholders equity?
a. Balance Sheet
b. Income Statement
c. Statement of Cash Flows
d. Statement of Changes in Equity
ct.
cu.
cv.
cw.
cx.
cy. 19. Based on the following data, what is the amount of current assets?
cz.
da. Accounts
payable..
$31,000
db. Accounts receivable..
50,000
dc. Cash.
15,000
dd. Intangible assets
50,000
de. Inventory.
69,000
df. Long-term investments.
80,000
dg. Long-term
liabilities.
100,000
dh. Marketable securities.
40,000
di. Notes payable.
28,000
dj. Plant
assets
670,000

dm.
dn.
do.
dp.

dk. Prepaid expenses..

1,000
dl.
a.
$ 96,000
b. $175,000
c. $106,000
d. $105,000
dq.
dr. Use the following balance sheet and income statement
information to answer questions 2023:
ds. Current assets
$ 7,000
Net income
$ 12,000
dt. Current liabilities
4,000
Stockholders equity
27,000
du. Average assets
40,000
Total liabilities
9,000
dv. Total assets
30,000
dw.Average common shares outstanding was 10,000

dx.
dy.
20. What is the total amount of working capital?
dz.
a. $1,000
ea.
b. $7,000
eb.
c. $2,000
ec.
d. $3,000
ed.
ee.= $7,000 - $4,000
ef.
eg.
21. What is the current ratio?
eh.
a. 1.75 : 1
ei.
b. 1.6 : 1
ej.
c. 0.57 : 1
ek.
d. 2 : 1
el.
em. = $7,000 / $4,000
en.
eo.
ep.22. What is the earnings per share?
a. $3.60
eq.
b.
$4.00
er.
c. $1.20
es.
d. $0.83
et.
eu.= $12,000 / 10,000
ev.
ew.
23. What is the debt to total assets?
ex.
a. 22.5 percent
ey.
b. 13 percent
ez.
c. 75 percent
fa.
d. 30 percent

fb.
fc.= $9,000 / $30,000
fd.
fe.
24. In 2006 Fione Corporation had cash receipts of $14,000 and cash
disbursements of $8,000. Their ending cash balance at December 31,
2006 was $22,000. What was their beginning cash balance?
ff. a. $16,000
fg. b. $20,000
fh. c. $30,000
fi. d. $28,000
fj.
fk.25.
The cost principle requires that when assets are acquired, they be
recorded at
fl. a. market value.
fm. b.
the amount paid for them.
fn. c. selling price.
fo. d. list price.
fp.
fq.
fr.
fs.
The following information applies to Questions 26 - 29.
ft.
fu. At the beginning of 2006 Oslo Co. had the following account balances:
fv.
fw.
Assets
$10,000
fx.
Liabilities
6,000
fy.
Common stock
3,000
fz.
Retained Earnings
1,000
ga.
gb. During 2006 the following cash events occurred:
gc.
gd. a. Provided services to customers for $8,000.
ge. b. Repaid $2,000 of debt.
gf. c. Owners invested an additional $3,000 in the business.
gg. d. Incurred operating expenses of $5,000.
gh. e. Dividends amounted to $1,000.
gi.
gj.
26. Oslo's net income for 2006 was:
gk.
a.
$1,000
gl.
b.
$2,000
gm.
c.
$3,000
gn.
d.
$4,000
go.
gp. Revenue
$ 8,000
gq. less: Expenses
5,000
gr. Net Income
$ 3,000

gt.

gs.
27. Total assets at the end of 2006 are:
gu.
a.
$ 3,000
gv.
b.
$13,000
gw.
c.
$15,000
gx.
d.
$18,000

gy.
gz. Beginning balance
ha. Transaction a
hb. Transaction b
hc. Transaction c
hd. Transaction d
he. Transaction e
hf. Ending balance
hg.
hh.

ht.

ig.

$10,000
8,000
(2,000)
3,000
(5,000)
(1,000)
$13,000

28. Total liabilities at the end of 2006 are:

hi.
a.
$
0
hj.
b.
$4,000
hk.
c.
$6,000
hl.
d.
$8,000
hm.
hn.
ho. Beginning balance
$ 6,000
hp. Transaction b
(2,000)
hq. Ending balance
$ 4,000
hr.
hs.
29. Retained earnings at the end of 2006 are:
hu.
a.
$1,000
hv.
b.
$2,000
hw.
c.
$3,000
hx.
d.
$4,000
hy.
hz.
ia. Beginning balance
$ 1,000
ib. Transaction a
8,000
ic. Transaction d
(5,000)
id. Transaction e
(1,000)
ie. Ending balance
$ 3,000
if.
30. The following amounts were drawn from the records of Gregory Co.:
Total Assets = $1,100; Common stock = $300; Retained Earnings = $200.
Based on this information, total liabilities must be equal to:
ih.
a. $300
ii.
b. $600
ij.
c. $800

35.

ik. d. $900
il.
im.= 1,100 ($300 + $200)
in.
io. 31. Hines Co. purchased land for $2,000 cash. As a result of this
event:
ip.
a. Cash flow from operating activities would decrease.
iq.
b. Cash flow from investing activities would increase.
ir.
c. Cash flow from financing activities would decrease.
is.
d. Cash flow from investing activities would decrease.
it.
iu. 32.
Which of the following is a stockholders equity item:
iv.
iw. a. Property, Plant and Equipment
b. Accounts Payable
c. Inventory
d. Contributed Capital
ix.
iy.
iz. 33. Net Income is
ja.
jb. a. Assets minus Liabilities
jc.
b. Revenues minus Expenses
jd.
c. Contributed Capital minus Dividends
je. d. Stockholders Equity minus Liabilities
jf.
34.
The Injoy Corp. has assets of $20,000 and stockholders equity of
$12,000. The amount of its liabilities is:
jg.
jh. a. $8,000
ji. b. $12,000
jj. c. $20,000
jk. d. $32,000
jl.
jm.= $20,000 - $12,000
jn.
Jumpy Company sold merchandise for $500,000. The merchandise that it
sold had a cost of $300,000. Jumpy Company has net income of:
jo.
jp. a. $200,000
jq. b. $300,000
jr. c. $500,000
js. d. $800,000
jt.
ju. $500,000 - $300,000
jv.

36.

jw.
Which of the following would appear in the cash flow from operations
section of the statement of cash flows?

jx.
jy. a. cash paid to suppliers and employees
jz. b. cash paid to purchase equipment
ka. c. cash paid on notes payable
kb. d. cash paid for dividends
kc.
37.
kd.

___________ includes cash, equipment and inventory.

c. Stockholders Equity
ke. b. Net Income
kf. c. Revenues
kg. d. Assets
kh.