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Financial Tests Essay

2007 words - 9 pages

Quiz 1

12. Examples of assets include cash, inventory, and capital stock issued to investors.
a. True
b. False

13. Inventory is goods held by a company for the purpose of sale to customers, and is considered a liability on the balance sheet.
a. True
b. False

14. A balance sheet is dated for a period of time, such as "for the year ended December 31, 20X2".
a. True
b. False

15. Owners' equity is the residual interest in the organization's assets after deducting liabilities.
a. True
b. False

16. An owner’s investment into a business will increase assets and decrease liabilities.
a. True
b. ...view middle of the document...

1. Presented below are the balances, listed in alphabetical order, of Beyer Company, at December 1, 20X4:

Accounts Payable $ 8,100
Accounts Receivable 4,000
Cash 7,300
Land 15,300
Machinery 31,600
Merchandise Inventory 12,200
Long-term Debt Payable 20,700
Note Payable 2,200
Paid-in Capital 39,400

Below are the transactions for Beyer Company for the month of December 20X4:

a. Sold inventory to a friend at cost, which was $800. The friend paid in cash.
b. Borrowed an additional $1,300 in notes payable.
c. Collected $1,900 from credit customers.
d. Paid $2,600 of the amount owed on account.

Prepare a balance sheet as of December 31, 20X4, considering
the beginning balances and incorporating the effects of the
December 20X4 transactions.

Quiz 2

9. Cash for services performed in 20X4 is received in 20X5. Using the accrual basis of accounting, the revenue would appear on the 20X5 income statement.
a. True
b. False

11. Under the accrual method, revenue is produced when cash is collected.
a. True
b. False

13. Accrual accounting uses the matching principle.
a. True
b. False

15. Expenses, such as utilities, whose benefit is consumed by the passage of time rather than by the level of sales are known as period costs.
a. True
b. False

16. Costs that are linked with revenues and are charged as expenses when the related revenue is recognized are known as product costs.
a. True
b. False

114. Presented below is the balance sheet for the Brown Company as of September 30, 20X4:
Brown Company
Balance Sheet
September 30, 20X4

|Assets | |Liabilities | |
|Cash |$ 7,100 |Accounts Payable |$ 6,200 |
|Accounts Receivable | 4,000 |Notes Payable | 8,300 |
|Merchandise Inventory | 13,500 |Total Liab. | 14,500 |
|Prepaid Rent | 4,000 |Paid-in Capital |$17,900 |
|Store Equipment | 15,600 |Retained Earnings | 11,800 |
| | | Total Stockholders' equity | 29,700 |
|Total Assets |$44,200 |Total Liab....

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