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What is Melody's Net Income for May using the accrual basis of accounting?


A) $400
B) $300
C) $350
D) $600

E) A) and D)
F) B) and C)

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Expenses are the same as expenditures.

A) True
B) False

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Your company received payment last month for a service that you provided this month.How will the business activity of the current month affect the basic accounting equation?


A) Assets will not change;liabilities (Unearned Revenue) will decrease;and stockholders' equity (Service Revenue) will increase.
B) Assets (Cash) will increase,liabilities (Unearned Revenue) will increase,and stockholders' equity will not change.
C) Assets (Cash) will increase,liabilities will not change,and stockholders' equity (Service Revenue) will increase.
D) Assets (Prepaid Expenses) will decrease,liabilities will not change,and stockholders' equity (Service Revenue) will increase.

E) B) and C)
F) A) and B)

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The following is a series of accounts for the Sprinkler Blowout Company,listed alphabetically and numbered for identification.Following the accounts is a series of transactions.For each transaction,indicate the account(s)that should be debited and credited by entering the appropriate account number(s)to the right of each transaction.If no journal entry is needed,write none after the transaction.The first transaction is given as an example. The following is a series of accounts for the Sprinkler Blowout Company,listed alphabetically and numbered for identification.Following the accounts is a series of transactions.For each transaction,indicate the account(s)that should be debited and credited by entering the appropriate account number(s)to the right of each transaction.If no journal entry is needed,write none after the transaction.The first transaction is given as an example. The following is a series of accounts for the Sprinkler Blowout Company,listed alphabetically and numbered for identification.Following the accounts is a series of transactions.For each transaction,indicate the account(s)that should be debited and credited by entering the appropriate account number(s)to the right of each transaction.If no journal entry is needed,write none after the transaction.The first transaction is given as an example.

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A: 5,12;B: 14,1;C: 4...

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During March,the Long Life Consulting Company provides $23,000 in consulting services of which $12,000 is immediately paid for and $11,000 is on account.


A) Cash increases $12,000,revenue increases $11,000,and accounts receivable increases $23,000.
B) Cash increases $12,000,Accounts Receivable increases $11,000,and revenues increase $23,000.
C) Accounts Receivable increases $11,000,liabilities decrease $12,000,and stockholders' equity increases $1,000.
D) Revenues increase $12,000,liabilities decrease $12,000,and stockholders' equity is unchanged.

E) None of the above
F) A) and B)

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What will be the trial balance total?


A) $439,200
B) $367,700
C) $608,400
D) $304,200

E) All of the above
F) A) and B)

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What is the amount of Current Assets on the classified balance sheet at the end of January?


A) $25,750
B) $26,500
C) $41,750
D) $40,250

E) A) and B)
F) A) and C)

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BD One Company entered into the following transactions.Choose the one which represents an accounting error.


A) A shareholder of BD One Company purchases a new car,but this was not recorded by the company.
B) Revenue was recognized when a customer received services from BD One Company.
C) Cash received from a customer in payment of his account was debited to Cash and credited to Accounts Receivable.
D) BD One Company ordered inventory and the order was recorded by a debit to Inventory and a credit to Accounts Payable.

E) A) and C)
F) A) and B)

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On December 31,2013,a company paid $10,000 to rent a storage facility from July 1,2014 to July 1,2015.Choose the true statement.


A) The Balance Sheet at December 31,2013 should report prepaid rent of $10,000 as a non-current asset.
B) The income statement at December 31,2013 should report rent expense of $10,000.
C) The Income Statement for the year ended December 31,2013 is unaffected by this transaction.
D) The Balance Sheet at December 31,2014 will not report any of this rent as an asset.

E) C) and D)
F) B) and C)

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What is the amount to be reported as total liabilities on the balance sheet at the end of January?


A) $4,750
B) $4,150
C) $8,150
D) $8,500

E) A) and C)
F) All of the above

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Your company receives advance payment in October for services that are provided during November.Which of the following is true?


A) A liability is recorded in October;in November the liability is reduced and revenue is recorded.
B) Revenue is recorded in October and expenses are recorded in November.
C) An asset is recorded in October;in November,the asset is reduced and revenue is recorded.
D) Revenue and expenses are recorded in October.

E) B) and D)
F) A) and D)

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If debits equal credits on the trial balance,it means that the accounting records do not contain any errors.

A) True
B) False

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West Corporation issued a $1,000 gift certificate.What journal entry will West Corporation record?


A) Debit Cash,credit Sales Revenue.
B) Debit Cash,credit Unearned Revenue.
C) Debit Unearned Revenue,credit Cash.
D) Debit Accounts Receivable,credit Cash.

E) B) and C)
F) None of the above

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If revenues are not growing faster than expenses,then Net income will decrease.

A) True
B) False

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What is the amount of net income for the year?


A) $44,000
B) $34,000
C) $24,000
D) $54,000

E) A) and B)
F) B) and C)

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Which of the following would not be reported on the Income Statement?


A) Utilities expense in the amount of a bill received for utilities used during the current period but unpaid as of the end of the period.
B) Rent expense in the amount of rent paid during the period for use of a storage facility in the current period.
C) Revenue in the amount of services provided to customers who promise to pay in the next period.
D) Cost of land,paid in cash,and purchased for future use.

E) A) and B)
F) A) and C)

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Which of the following is not true of the Income Statement of a company that was formed 10 years ago?


A) Reports a Net Loss for the year if expenses are more than revenues.
B) Reports the financial effects of activities that have occurred since the company's inception.
C) Reports the amount of the increase in stockholders' equity this year as a result of the company's operations.
D) Reports Net Income which is not an account in the ledger.

E) B) and C)
F) A) and B)

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What is the amount of total revenue to be reported on the Income Statement for the month of January?


A) $45,000
B) $9,000
C) $29,000
D) $25,000

E) A) and B)
F) A) and C)

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Which of the following is the journal entry to record activity #1?


A) Which of the following is the journal entry to record activity #1? A) B) C) D)
B) Which of the following is the journal entry to record activity #1? A) B) C) D)
C) Which of the following is the journal entry to record activity #1? A) B) C) D)
D) Which of the following is the journal entry to record activity #1? A) B) C) D)

E) A) and C)
F) None of the above

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Which of the following is true?


A) Credits increase both revenues and expenses.
B) Credits increase expenses and decrease revenues.
C) Credits increase revenues and decrease expenses.
D) Credits decrease both revenues and expenses.

E) B) and D)
F) B) and C)

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