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ACTG Exam 1: Multiple Choice Questions and Answers, Exams of Accounting

Harrisburg University of Science & Technology (HU)Accounting

A set of multiple choice questions and answers related to the first exam in an introductory accounting course. It covers fundamental accounting concepts such as the accounting equation, debits and credits, financial statements, and the accounting cycle. The questions are designed to test students' understanding of basic accounting principles and their ability to apply them to real-world scenarios.

Typology: Exams

2024/2025

Available from 02/28/2025

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ACTG Exam 1 | 100% Correct Answers |
Verified | Latest 2024 Version
Which of the following transactions does not affect the balance sheet totals?
Select one:
A. Paid off a $3,000 note payable
B. Ordered a new machine that will be paid for upon its delivery in two months
C. Purchased $500 supplies on account
D. Received $4,000 cash from a bank after signing a note payable - ✔✔B. Ordered a new machine that
will be paid for upon its delivery in two months
Tobias Company purchased inventory on account. This transaction will affect:
Select one:
A. Only the balance sheet
B. Only the income statement
C. The income statement and the statement of retained earnings
D. The income statement, balance sheet, and statement of retained earnings - ✔✔A. Only the balance
sheet
If assets increase by $50 and liabilities decrease by $30, stockholders' equity must:
Select one:
A. Decrease by $130
B. Remain unchanged
C. Decrease by $70
D. Increase by $80 - ✔✔D. Increase by $80
A T-account consists of how many parts? - ✔✔3 parts
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Download ACTG Exam 1: Multiple Choice Questions and Answers and more Exams Accounting in PDF only on Docsity!

ACTG Exam 1 | 100% Correct Answers |

Verified | Latest 2024 Version

Which of the following transactions does not affect the balance sheet totals? Select one: A. Paid off a $3,000 note payable B. Ordered a new machine that will be paid for upon its delivery in two months C. Purchased $500 supplies on account D. Received $4,000 cash from a bank after signing a note payable - ✔✔B. Ordered a new machine that will be paid for upon its delivery in two months Tobias Company purchased inventory on account. This transaction will affect: Select one: A. Only the balance sheet B. Only the income statement C. The income statement and the statement of retained earnings D. The income statement, balance sheet, and statement of retained earnings - ✔✔A. Only the balance sheet If assets increase by $50 and liabilities decrease by $30, stockholders' equity must: Select one: A. Decrease by $ B. Remain unchanged C. Decrease by $ D. Increase by $80 - ✔✔D. Increase by $ A T-account consists of how many parts? - ✔✔3 parts

Which of the following is true? Select one: A. The credit is on the left side of a liability account B. The debit is on the right side of an expense account C. The debit is on the left side of an asset account D. The debit is on the right side of an asset account - ✔✔C. The debit is on the left side of an asset account Which of the following accounts has a normal debit balance? Select one: A. Notes Payable B. Advertising Expense C. Accounts Payable D. Common Stock - ✔✔B. Advertising Expense Which of the following accounts is increased by a credit? Select one: A. Dividends B. Accounts Receivable C. Sales Revenue D. Advertising Expense - ✔✔C. Sales Revenue Which of the following is true? Select one: A. A credit will increase an asset account B. A debit will increase a liability account C. A debit will decrease an expense account D. A credit will increase a revenue account - ✔✔D. A credit will increase a revenue account

A journal entry that contains more than just two accounts is called: Select one: A. A compound journal entry B. An erroneous journal entry C. adjusting journal entry D. A posted journal entry - ✔✔A. A compound journal entry Posting refers to the process of transferring information from: - ✔✔A journal to the general ledger accounts Which of the following is not one of the five steps in the accounting cycle? Select one: A. Adjust B. Analyze C. Report D. Eliminate - ✔✔D. Eliminate The purchase of $500 of supplies on account will: Select one: A. Increase both assets and liabilities by $ B. Increase assets and decrease stockholders' equity by $ C. Increase assets and decrease liabilities by $ D. Increase both assets and stockholders' equity by $500 - ✔✔A. Increase both assets and liabilities by $ What are the 5 stages in the accounting cycle? - ✔✔Analyze Adjust Record Report Close

Analyze - ✔✔Analyze transactions from source documents Adjust - ✔✔Journalize adjusting entries and prepare adjusted trial balance Record - ✔✔Journalize transactions and prepare unadjusted trial balance Report - ✔✔Prepare financial statements Close - ✔✔Journalize closing entries and prepare post-closing trial balance Which of the following is an example of an adjusting entry? Select one: A. Recording the purchase of supplies on account B. Recording depreciation expense on a truck C. Recording the payment of wages to employees D. Recording the billing of customers for services rendered - ✔✔B. Recording depreciation expense on a truck An adjusting entry to record utilities used during a month for which no bill has yet been received is an example of Select one: A. Accruing expenses to reflect expenses incurred during the accounting period that are not yet paid or recorded B. Allocating revenues received in advance to revenue to reflect actual revenues earned during the accounting period C. Allocating assets to expense to reflect the actual operating expenses incurred during the accounting period D. Accuring revenues to reflect revenues earned during the accounting period that are not yet received or recorded - ✔✔A. Accruing expenses to reflect expenses incurred during the accounting period that are not yet paid or recorded

Kelly Corporation received an advanced payment of $30,000 in 2018 from Rufus Company for consulting services. Kelly performed half of the consulting in 2018 and the remainder in 2019. Kelly reports using the accrual basis of accounting. How much revenue from this consulting project will Kelly report in 2018? Select one: A. $ 20, B. $10, C. $15, D. $0 - ✔✔C. $15, What is the order of the financial statements? - ✔✔1. Income Statement

  1. Statement of Retained Earnings
  2. Balance Sheet
  3. Statement of Cash Flows What can be found on the Balance Sheet? - ✔✔Assets, Liabilities, and Owners Equity What can be found on the Income Statement? - ✔✔Revenues and Expenses (also net income) What can be found on the Statement of Owner's Equity (Retained Earnings)? - ✔✔Common Stock and Retained Earnings How do you calculate your ending RE? - ✔✔Beg + Inc - Dividends What is the Accounting Equation? - ✔✔Assets = Liabilities + Owner's Equity A balance sheet is a __________, it is for one moment in time. This is unique to the balance sheet. - ✔✔snapshot assets - ✔✔the economic resources of a business that can be expressed in monetary terms

liabilities - ✔✔debts that a business must pay in cash or services owner's equiity - ✔✔refers to the ownership claims on the assets of a business payable = - ✔✔liabilty receivable = - ✔✔asset What are the 3 forms of a business? - ✔✔sole proprietorship, partnership, corporation Sole Proprietorship - ✔✔-one owner control

  • business not taxed, but owner taxed
  • not a legal entity
  • limited life
  • unlimited liability Partnership - ✔✔-shared owner control
  • business not taxed separately, but rather individual owners
  • not legal entity
  • limited life Corporation - ✔✔- all types of owner control
  • business taxed and owners taxed (double taxation)
  • separate legal entity
  • unlimited life
  • limited liability What are the 3 different business activities? - ✔✔Financing Investing Operating