| 1 | | The accounting cycle consists of which of the following number of specific steps? |
| | | A) | Three |
| | | B) | Four |
| | | C) | Five |
| | | D) | Eight |
| | | E) | Ten |
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| 2 | | The collection of all of the accounts is kept together in the: |
| | | A) | journal, only. |
| | | B) | ledger, only. |
| | | C) | trial balance, only. |
| | | D) | both the journal and the ledger. |
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| 3 | | Which of the following is not true about the normal balance of the accounts or account categories shown below? |
| | | A) | Assets normally have a debit balance. |
| | | B) | Liabilities normally have a credit balance. |
| | | C) | Owners equity accounts normally have a credit balance. |
| | | D) | Accounts receivable normally has a credit balance. |
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| 4 | | Consider the following: If you have $5,000 in Savings and a Car that is worth $10,000 and you still owe $3,000 on the car, what is your equity. |
| | | A) | $5,000 |
| | | B) | $15,000 |
| | | C) | $12,000 |
| | | D) | $18,000 |
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| 5 | | Recording a $100,000 investment by owners on January 1 for capital stock of the company will result in which of the following? |
| | | A) | Increase an asset and decrease owners equity |
| | | B) | Increase an asset and increase owner's equity |
| | | C) | Increase an asset and increase liability |
| | | D) | Increase an asset and decrease a liability |
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| 6 | | Revenue can be described as which of the following? |
| | | A) | Net income for the accounting period |
| | | B) | Sales minus expenses |
| | | C) | Gross increase in owners' equity resulting from operation of the business |
| | | D) | All of the above |
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| 7 | | An advertising program was paid in advance on March 1 for delivery through newspaper advertisements beginning on April 1 and ending on April 15. The advertising program cost $5,000. When should the expense of the advertising program be recognized? |
| | | A) | April 1 |
| | | B) | March 1 |
| | | C) | May 1 |
| | | D) | April 15 |
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| 8 | | If revenue is $50,000 and cost of goods sold was $20,000 and Salaries for the company was $15,000, and taxes are $5,000 how much is net income |
| | | A) | $30,000 |
| | | B) | $10,000 |
| | | C) | $15,000 |
| | | D) | $5,000 |
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| 9 | | The debit balance of the trial balance is $456,000 and the credit balance of the trial balance is $465,000. This indicates which of the following? |
| | | A) | An account was not posted |
| | | B) | An account was posted twice |
| | | C) | An account was posted for an incorrect amount |
| | | D) | Any of the above might have occurred |
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| 10 | | If, in fulfilling your duties as a bookkeeper or accountant, you are requested by a superior to record a nonexistent transaction that will reflect favorably on the financial position of the company, you should do which of the following? |
| | | A) | Not record the transaction, and report the request to a higher supervisor |
| | | B) | Ask for a raise in exchange for the risk involved in the fraud being disclosed |
| | | C) | Record the transaction, adding a note about the circumstances. |
| | | D) | Record the transaction as part of the normal journaliz |
