1) Questions & Your AnswersYour Answer1.(Multiple Choice) Purchasing an item of equipment for cash will cause total assets, total liabilities, and stockholders’ equity to: A. increase, increase, and remain unchanged, respectively. B. remain unchanged, remain unchanged, and remain unchanged, respectively. C. increase, remain unchanged, and increase, respectively. D. increase, remain unchanged, and decrease, respectively. E. None of these.INSTRUCTIONS: Please show your final answers in Column C (tab1) for all questions (Multiple Choice and Essey).2.(Multiple Choice) Paying a previously recorded accounts payable will cause total assets, total liabilities, and stockholders' equity to: A. decrease, remain unchanged, and decrease, respectively. B. remain unchanged, remain unchanged, and decrease, respectively. C. remain unchanged, remain unchanged, and remain unchanged, respectively. D. decrease, decrease, and remain unchanged, respectively. E. None of these.NOTE: The Essey question requires one "number" as answer. Please put your final number/answer in Column C here (tab 1). You can show your work (back-up) in the next tab (tab 2). If your final answer is incorrect here, I will give you partial credit base on the back-up.3.(Multiple Choice) Which of the following is considered a revenue item? A. Proceeds of a bank loan. B. Investments by owner. C. Sales on account. D. All of these. E. None of these.4.(Multiple Choice) Which of the following would not cause stockholders' equity to fluctuate? A. Investments by shareholders. B. Dividends. C. Providing services at a profit or loss. D. Collection of accounts receivable. E. None of these.5.(Multiple Choice) Assume beginning assets of $60,000, ending assets of $80,000, a $10,000 decrease in liabilities, and ending stockholders' equity of $45,000. If dividends exceeded capital stock issuances by $20,000, how much was net income for the period? A. $15,000. B. $30,000. C. $50,000. D. Cannot be determined from the information given. E. None of these.6.(Essay) Microtel began operations at the beginning of 20X6 with a $10,000 cash investment by stockholders. During 20X6, Microtel had revenue on account of $5,000; of this amount $2,000 was collected during 20X6 and $3,000 was an outstanding receivable at year-end. Microtel incurred $3,000 of operating expenses during 20X6; of this amount $1,000 was unpaid at year-end. During 20X6, $1,000 cash was disbursed as dividends. The only other transaction during 20X6 was the purchase of $5,000 of equipment for cash near the end of the year. How much were Microtel's total assets at year-end?7.(Multiple Choice) Of the following account types, which normally display a credit balance: A. Assets and expenses. B. Assets and stockholders' equity. C. Assets, revenues, and stockholders' equity. D. Liabilities and expenses. E. None of these.8.(Multiple Choice) The dividend account: A. is an expense a ...

1. 1) Questions & Your AnswersYour Answer1.(Multiple Choice)
Purchasing an item of equipment for cash will cause total
assets, total liabilities, and stockholders’ equity to:
A. increase, increase, and remain unchanged, respectively.
B. remain unchanged, remain unchanged, and remain
unchanged, respectively.
C. increase, remain unchanged, and increase, respectively.
D. increase, remain unchanged, and decrease, respectively.
E. None of these.INSTRUCTIONS: Please show your final
answers in Column C (tab1) for all questions (Multiple Choice
and Essey).2.(Multiple Choice)
Paying a previously recorded accounts payable will cause total
assets, total liabilities, and stockholders' equity to:
A. decrease, remain unchanged, and decrease, respectively.
B. remain unchanged, remain unchanged, and decrease,
respectively.
C. remain unchanged, remain unchanged, and remain
unchanged, respectively.
D. decrease, decrease, and remain unchanged, respectively.
E. None of these.NOTE: The Essey question requires one
"number" as answer. Please put your final number/answer in
Column C here (tab 1). You can show your work (back-up) in
the next tab (tab 2). If your final answer is incorrect here, I will
give you partial credit base on the back-up.3.(Multiple Choice)
Which of the following is considered a revenue item?
A. Proceeds of a bank loan.
B. Investments by owner.
C. Sales on account.

2. D. All of these.
E. None of these.4.(Multiple Choice)
Which of the following would not cause stockholders' equity to
fluctuate?
A. Investments by shareholders.
B. Dividends.
C. Providing services at a profit or loss.
D. Collection of accounts receivable.
E. None of these.5.(Multiple Choice)
Assume beginning assets of $60,000, ending assets of $80,000,
a $10,000 decrease in liabilities, and ending stockholders'
equity of $45,000. If dividends exceeded capital stock
issuances by $20,000, how much was net income for the period?
A. $15,000.
B. $30,000.
C. $50,000.
D. Cannot be determined from the information given.
E. None of these.6.(Essay)
Microtel began operations at the beginning of 20X6 with a
$10,000 cash investment by stockholders. During 20X6,
Microtel had revenue on account of $5,000; of this amount
$2,000 was collected during 20X6 and $3,000 was an
outstanding receivable at year-end. Microtel incurred $3,000 of
operating expenses during 20X6; of this amount $1,000 was
unpaid at year-end. During 20X6, $1,000 cash was disbursed as
dividends. The only other transaction during 20X6 was the
purchase of $5,000 of equipment for cash near the end of the
year. How much were Microtel's total assets at year-
end?7.(Multiple Choice)
Of the following account types, which normally display a credit

3. balance:
A. Assets and expenses.
B. Assets and stockholders' equity.
C. Assets, revenues, and stockholders' equity.
D. Liabilities and expenses.
E. None of these.8.(Multiple Choice)
The dividend account:
A. is an expense account.
B. appears on the income statement.
C. appears on the statement of retained earnings.
D. normally has a credit balance.
E. None of these.9.(Multiple Choice)
Richards billed patients for $12,000 of services rendered. The
appropriate journal entry to record this transaction is:
A. Debit Cash/Credit Revenue.
B. Debit Accounts Receivable/Credit Revenue.
C. Debit Revenue/Credit Cash.
D. Debit Accounts Receivable/Credit Capital Stock.
E. None of these.10.(Multiple Choice)
Richards Corporation paid $3,000 toward an outstanding
accounts payable that was previously established when supplies
were purchased. The appropriate journal entry to record this
transaction is:
A. Debit Cash/Credit Accounts Payable.
B. Debit Supplies/Credit Accounts Payable.
C. Debit Accounts Payable/Credit Supplies.
D. Debit Accounts Payable/Credit Cash.
E. None of these.11.(Multiple Choice)

4. Richards Corporation collected $5,000 on an outstanding
accounts receivable that was previously established when
services were provided to customers. The appropriate journal
entry to record this transaction is:
A. Debit Cash/Credit Accounts Receivable.
B. Debit Revenues/Credit Accounts Receivable.
C. Debit Accounts Receivable/Credit Revenues.
D. Debit Accounts Receivables/Credit Cash.
E. None of these.12.(Multiple Choice)
Archie Corporation's trial balance included debits to expense
accounts of $125,000, credits to revenue accounts of $175,000,
and debits to the Dividends account of $50,000. Based on this
information, the company's ending retained earnings is:
A. $0.
B. $50,000.
C. $125,000.
D. Cannot be determined.
E. None of these.13.(Essay)
Jennings Company had a beginning Accounts Receivable
account balance of $380. During the period Jennings' sold
goods on account for $1,400. Ending Accounts Receivable had
a $630 balance. How much was collected on account during the
period?14.(Essay)
Jorden Company reports total assets and total liabilities of
$251,000 and $100,000, respectively, at the conclusion,of its
first year of business. The company earned $75,000 during the
first year, and distributed $30,000 to shareholders as dividends.
How much did shareholders initially invest in the
business?15.(Essay)
Beginning and ending balances of Accounts Receivable were

5. $43,000 and $22,000, respectively. If collections from clients
during the period were $65,000, how much were services
rendered on account?16.(Multiple Choice)
For purposes of reporting the results of operations, the life of a
business is:
A. considered to be one continuous reporting period..
B. divided into discrete accounting periods.
C. divided into one-year time intervals.
D. divided into specific points in time.
E. None of these.17.(Multiple Choice)
On March 1, 20X3, Jimenez purchased a one-year insurance
policy for $2,400. On that date, Jimenez debited Prepaid
Insurance for $2,400. If Jimenez desires to prepare financial
statements at the end of March, the adjusting journal entry
would include a:
A. debit to Insurance Expense for $2,400.
B. debit to Insurance Expense for $200.
C. credit to Insurance Expense for $2,200.
D. credit to Prepaid Insurance for $2,200.
E. None of these.18.(Multiple Choice)
A company failed to record utilities consumed during the
current period. The company will be billed for the utilities
during the next accounting period. As a result, current period
assets, liabilities, stockholders' equity, and income,
respectively, are:
A. overstated, overstated, correct, correct..
B. correct, understated, overstated, overstated.
C. overstated, understated, overstated, overstated.
D. overstated, understated, correct, correct.
E. None of these.19.(Multiple Choice)

6. The proper journal entry to record depreciation of a truck would
entail which of the following?
A. A debit to Depreciation Expense.
B. A credit to Accumulated Depreciation.
C. A credit to Truck.
D. Two of the above.
E. None of these.20.(Multiple Choice)
On January 7, Collin purchased supplies on account for $1,000,
and recorded this purchase to the Supplies account. At the end
of January, Collin had $600 of these supplies still on hand. The
proper adjusting journal entry at January 31 would:
A. include a debit to Supplies for $1,000.
B. include a credit to Supplies for $400.
C. include a debit to Accounts Payable for $400.
D. include a debit to Supplies Expense for $600.
E. None of these.21.(Multiple Choice)
On January 26, a customer paid Collin Printing $250 in advance
for printing. On January 28, Collin printed 500 posters for
Grubb at a price of 30¢ each. The proper entry on January 26
would include a:
A. debit to Unearned Revenue of $250.
B. credit to Unearned Revenue for $100.
C. credit to Unearned Revenue for $250.
D. debit to Unearned Revenue for $100.
E. None of these.22.(Multiple Choice)
On January 26, a customer paid Collin Printing $250 in advance
for printing. On January 28, Collin printed 500 posters for
Grubb at a price of 30¢ each. The proper entry on January 28
would include a:

7. A. debit to Unearned Revenue of $250.
B. credit to Unearned Revenue for $100.
C. credit to Unearned Revenue for $250.
D. debit to Unearned Revenue for $100.
E. None of these.23.(Multiple Choice)
Net income may be found in the:
A. balance sheet and income statement.
B. income statement and statement of retained earnings.
C. income statement and balance sheet.
D. balance sheet and statement of retained earnings.
E. None of these.24.(Multiple Choice)
After closing all Revenue and Expense accounts, Weiss
Company had a debit balance in its Income Summary account of
$5,000. The proper entry to record the closing of the Income
Summary account would include:
A. a debit to Expenses of $5,000.
B. a credit to Retained Earnings of $5,000.
C. a credit to Income Summary of $5,000.
D. a credit to Revenues of $5,000.
E. None of these.25.(Multiple Choice)
In a post-closing trial balance:
A. debits should equal credits..
B. no balances remain in the Dividends, Revenue, and Expense
accounts.
C. Retained earnings includes net income.
D. All of the above.
E. None of these.26.(Multiple Choice)
Current assets are those assets which management intends to

8. convert into cash or consume within:
A. one year.
B. the operating cycle.
C. the longer of A or B.
D. the shorter of A or B.
E. None of these.27.(Multiple Choice)
Lena White Corporation has a current ratio of 3:1. If Lena uses
cash to pay an outstanding accounts payable, the revised current
ratio will:
A. remain the same.
B. increase.
C. decrease.
D. Cannot be determined from the information given.
E. None of these.28.(Essay)
Conner Corporation's adjusted trial balance included the
following items:
Accounts payable ($65,000), Accounts receivable ($45,000),
Capital stock ($100,000), Cash ($50,000), Dividends ($10,000),
Goodwill ($47,000), Interest expense ($4,000), Interest payable
($2,000), Inventory ($32,000), Notes payable ($80,000), Prepaid
expenses ($5,000), Property, plant & equipment ($123,000),
Retained earnings ($46,000), Rent expense ($18,000), Revenues
($101,000), and Salary expense ($60,000). How much are total
debits/credits in the trial balance?29.(Essay)
Conner Corporation's adjusted trial balance included the
following items:
Accounts payable ($65,000), Accounts receivable ($45,000),
Capital stock ($100,000), Cash ($50,000), Dividends ($10,000),
Goodwill ($47,000), Interest expense ($4,000), Interest payable
($2,000), Inventory ($32,000), Notes payable ($80,000), Prepaid
expenses ($5,000), Property, plant & equipment ($123,000),

9. Retained earnings ($46,000), Rent expense ($18,000), Revenues
($101,000), and Salary expense ($60,000). How much is
retained earnings to be reported in the balance sheet?30.(Essay)
Conner Corporation's adjusted trial balance included the
following items:
Accounts payable ($65,000), Accounts receivable ($45,000),
Capital stock ($100,000), Cash ($50,000), Dividends ($10,000),
Goodwill ($47,000), Interest expense ($4,000), Interest payable
($2,000), Inventory ($32,000), Notes payable ($80,000), Prepaid
expenses ($5,000), Property, plant & equipment ($123,000),
Retained earnings ($46,000), Rent expense ($18,000), Revenues
($101,000), and Salary expense ($60,000). The note payable
balance is not due for many years, although interest is paid
annually. How much is Conner's quick ratio?
2) Back-up for Essey QuestionsNOTE: This applies to the Essey
questions ONLY. You can choose show your back-up details to
the Essey questions here (tab 2). If your final answer (tab 1) is
invorrect, I will give you partial credit base on the back-up
information. (Please number your work clearly so that I can
follow your logic.)
Sheet2Your
Answer1.02.03.04.05.06.07.08.09.010.011.012.013.014.015.016
.017.018.019.020.021.022.023.024.025.026.027.028.029.030.0