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Accounting: asset accounting

1. Which of the following is not an asset:
a. Accounts Payable
b. Furnishing and Equipment
c. Supplies
d. Cash

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

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.

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

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.

6. Liabilities are generally classified on a balance sheet as
a. small liabilities and large liabilities.
b. present liabilities and future liabilities.
c. tangible liabilities and intangible liabilities.
d. current liabilities and long-term liabilities.

7. Office equipment is classified on the balance sheet as
a. a current asset.
b. property, plant, and equipment.
c. an intangible asset.
d. a long-term investment.

Use the following information to answer questions 8-12:
Benton Office Supplies
Balance Sheet
December 31, 2007

Cash $ 65,000 Accounts Payable $ 70,000
Prepaid Insurance 30,000 Salaries Payable 10,000
Accounts Receivable 50,000 Mortgage Payable 80,000
Inventory 70,000 Total Liabilities $160,000
Land held for investment 75,000
Land 90,000
Building $100,000 Common Stock $120,000
Less Accumulated Retained Earnings 250,000
Depreciation (20,000) 80,000 Total stockholders' equity $370,000
Trademark 70,000 Total Liabilities and
Total Assets $530,000 Stockholders' Equity $530,000

8. The total dollar amount of assets to be classified as current assets is
a. $290,000.
b. $215,000.
c. $180,000.
d. $145,000.

9. The total dollar amount of assets to be classified as property, plant, and equipment is
a. $320,000.
b. $170,000.
c. $245,000.
d. $190,000.

10. The total dollar amount of assets to be classified as investments is
a. $0.
b. $150,000.
c. $75,000.
d. $180,000.

11. The total amount of working capital is
a. $135,000.
b. $295,000.
c. $75,000.
d. $60,000.

12. The current ratio is
a. 1.94 : 1.
b. 1.57 : 1.
c. 3.14 : 1.
d. 2.69 : 1.

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

14. Current assets divided by current liabilities is known as the
a. working capital.
b. current ratio.
c. profit margin.
d. capital structure.

15. State the accounting equation:
a. Assets + Liabilities = Equity
b. Assets + Equity = Liabilities
c. Assets = Liabilities - Equity
d. Assets = Liabilities + Equity

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

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

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

19. Based on the following data, what is the amount of current assets?

Accounts payable................................................................. $31,000
Accounts receivable.............................................................. 50,000
Cash.................................................................................. 15,000
Intangible assets.................................................................. 50,000
Inventory............................................................................ 69,000
Long-term investments.......................................................... 80,000
Long-term liabilities...................................................................... 100,000
Marketable securities............................................................. 40,000
Notes payable...................................................................... 28,000
Plant assets........................................................................ 670,000
Prepaid expenses................................................................. 1,000

a. $ 96,000
b. $175,000
c. $106,000
d. $105,000

Use the following balance sheet and income statement information to answer questions 20-23:
Current assets $ 7,000 Net income $ 12,000
Current liabilities 4,000 Stockholders' equity 27,000
Average assets 40,000 Total liabilities 9,000
Total assets 30,000
Average common shares outstanding was 10,000

20. What is the total amount of working capital?
a. $1,000
b. $7,000
c. $2,000
d. $3,000

21. What is the current ratio?
a. 1.75 : 1
b. 1.6 : 1
c. 0.57 : 1
d. 2 : 1

22. What is the earnings per share?
a. $3.60
b. $4.00
c. $1.20
d. $0.83

23. What is the debt to total assets?
a. 22.5 percent
b. 13 percent
c. 75 percent
d. 30 percent

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?
a. $16,000
b. $20,000
c. $30,000
d. $28,000

25. The cost principle requires that when assets are acquired, they be recorded at
a. market value.
b. the amount paid for them.
c. selling price.
d. list price.

The following information applies to Questions 26 - 29.

At the beginning of 2006 Oslo Co. had the following account balances:

Assets $10,000
Liabilities 6,000
Common stock 3,000
Retained Earnings 1,000

During 2006 the following cash events occurred:

a. Provided services to customers for $8,000.
b. Repaid $2,000 of debt.
c. Owners invested an additional $3,000 in the business.
d. Incurred operating expenses of $5,000.
e. Dividends amounted to $1,000.

26. Oslo's net income for 2006 was:
a. $1,000
b. $2,000
c. $3,000
d. $4,000

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

28. Total liabilities at the end of 2006 are:
a. $ 0
b. $4,000
c. $6,000
d. $8,000

29. Retained earnings at the end of 2006 are:
a. $1,000
b. $2,000
c. $3,000
d. $4,000

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:
a. $300
b. $600
c. $800
d. $900

31. Hines Co. purchased land for $2,000 cash. As a result of this event:
a. Cash flow from operating activities would decrease.
b. Cash flow from investing activities would increase.
c. Cash flow from financing activities would decrease.
d. Cash flow from investing activities would decrease.

32. Which of the following is a stockholders' equity item:

a. Property, Plant and Equipment
b. Accounts Payable
c. Inventory
d. Contributed Capital

33. Net Income is -

a. Assets minus Liabilities
b. Revenues minus Expenses
c. Contributed Capital minus Dividends
d. Stockholders' Equity minus Liabilities

34. The Injoy Corp. has assets of $20,000 and stockholders' equity of $12,000. The amount of its liabilities is:

a. $8,000
b. $12,000
c. $20,000
d. $32,000

35. Jumpy Company sold merchandise for $500,000. The merchandise that it sold had a cost of $300,000. Jumpy Company has net income of:

a. $200,000
b. $300,000
c. $500,000
d. $800,000

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

a. cash paid to suppliers and employees
b. cash paid to purchase equipment
c. cash paid on notes payable
d. cash paid for dividends

37. ___________ includes cash, equipment and inventory.

c. Stockholders' Equity
b. Net Income
c. Revenues
d. Assets

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Solution Preview

Please see the attached file for answers in blue.

1. Which of the following is not an asset:
a. Accounts Payable
b. Furnishing and Equipment
c. Supplies
d. Cash

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

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.

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

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.

6. Liabilities are generally classified on a balance sheet as
a. small liabilities and large liabilities.
b. present liabilities and future liabilities.
c. tangible liabilities and intangible liabilities.
d. current liabilities and long-term liabilities.

7. Office equipment is classified on the balance sheet as
a. a current asset.
b. property, plant, and equipment.
c. an intangible asset.
d. a long-term investment.

Use the following information to answer questions 8-12:
Benton Office Supplies
Balance Sheet
December 31, 2007

Cash $ 65,000 Accounts Payable $ 70,000
Prepaid Insurance 30,000 Salaries Payable 10,000
Accounts Receivable 50,000 Mortgage Payable 80,000
Inventory 70,000 Total Liabilities $160,000
Land held for investment 75,000
Land 90,000
Building $100,000 Common Stock $120,000
Less Accumulated Retained Earnings 250,000
Depreciation (20,000) 80,000 Total stockholders' equity $370,000
Trademark 70,000 Total Liabilities and
Total Assets $530,000 Stockholders' Equity $530,000

8. The total dollar amount ...

Solution Summary

This solution is comprised of a detailed explanation to answer which of the following is not an asset.

$2.19