Multiple Choice

This course is designed to: 
introduce you to college life.
teach you to be an online learner.
provide you with academic skills and strategies to succeed.
be a prerequisite for another course.

Intelligence is measured by: 
an IQ test.
an EIQ test.
multiple intelligence tests.
multiple ways.

Which do you think is the most proven way people, in general, learn? 
What we read
What we see
What we hear
What we do and experience

To become a successful online learner is to: 
be technically and computer savvy.
be a good communicator and writer.
be committed.
learn and apply what it takes to be one.

To focus on your most important goal is to: 
be SMART.
be committed.
prioritize your goals.
set the goal.

According to experts, reading comprehension is greatly aided by: 
reading dense materials.
using a reading system that works for you.
taking lots of notes.
reading all the time.

To write well is to: 
use impressive vocabulary.
express thoughts and ideas completely and concisely.
use a particular style of writing.
research your material.

Critical thinking involves: 
knowing the art of critique.
understanding knowledge.
a thought process that is logical, rational, and systematic.
coming up with the best solutions

Excelling at taking tests depends on: 
knowing the “what” and “how” of test taking.
the amount of hours spent studying.
reviewing all the materials covered in the course.
how well rested you are before the test.

Research is: 
only an academic skill.
self-intuitive.
something anybody can do with Internet.
a systematic inquiry of knowledge.

Multiple Choice


1 Adjusting entries can be classified as
A Postponements and advances
B Accruals and deferrals
C Deferrals and postponements
D Accruals and advances

2 Daly Investments purchased an 18-month insurance policy on May 31, 2010 for $3,600. The December 31, 2010 balance sheet would report Prepaid Insurance of
A $0 because Prepaid Insurance is reported on the Income Statement
B $1,400
C $2,200
D $3,600

3 Daly Investments purchased an 18-month insurance policy on May 31, 2010 for $3,600. The December 31, 2010 balance sheet would report Prepaid Insurance of
A $0 because Prepaid Insurance is reported on the Income Statement
B $1,400
C $2,200
D $3,600

4 Southwestern City College sold season tickets for the 2010 football season for $160,000. A total of 8 games will be played during September, October and November. Assuming all the games are played, the Unearned Revenue balance that will be reported on the December 31 balance sheet will be
A $0
B $60,000
C $100,000
D $160,000

5 The operating cycle of a company is the average time that is required to go from cash to
A Sales in producing revenues
B Cash in producing revenues
C Inventory in producing revenues
D Accounts receivable in producing revenues

6 The income statement for the month of June, 2010 of Ramirez Enterprises contains the following information:

The entry to close Income Summary to Ramirez, Capital includes
A A debit to Revenue for $7,000
B Credits to Expenses totaling $3,600
C A credit to Income Summary for $3,400
D A credit to Ramirez, Capital for $3,400

7 Joyce’s Gifts signs a three-month note payable to help finance increases in inventory for the Christmas shopping season. The note is signed on November 1 in the amount of $50,000 with annual interest of 12%. What is the adjusting entry to be made on December 31 for the interest expense accrued to that date, if no entries have been made previously for the interest?

8 All of the following statements about the post-closing trial balance are correct except it
A Shows that the accounting equation is in balance
B Provides evidence that the journalizing and posting of closing entries have been properly completed
C Contains only permanent accounts
D Proves that all transactions have been recorded

9 The following items are taken from the financial statements of Dinkel Company for the year ending December 31, 2010:
What is the company’s net income for the year ending December 31, 2010?
A $133,000
B $42,000
C $28,000
D $12,000

10 O.K.C. Company collected $8,400 in May of 2010 for four months of service which would take place from October of 2010 through January of 2011. The revenue reported from this transaction during 2010 would be
A 0
B $6,300
C $8,400
D $2,010

11 The following information is for Benton Office Supplies:
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

12 Henry-K Company purchased a computer system for $3,600 on January 1, 2010. The company expects to use the computer system for 3 years. It has no salvage value. Monthly depreciation expense on the asset is
A $0
B $100
C $1,200
D $3,600

13 What is the proper adjusting entry at June 30, the end of the fiscal year, based on a prepaid insurance account balance before adjustment, $15,500, and unexpired amounts per analysis of policies of $4,500?
A Debit Insurance Expense, $4,500; Credit Prepaid Insurance, $4,500
B Debit Insurance Expense, $15,500; Credit Prepaid Insurance, $15,500
C Debit Prepaid Insurance, $11,000; Credit Insurance Expense, $11,000
D Debit Insurance Expense, $11,000; Credit Prepaid Insurance, $11,000

14 The following items are taken from the financial statements of Dinkel Company for the year ending December 31, 2010:
The sub-classifications for assets on the company’s classified balance sheet would include all of the following except
A Current Assets
B Property, Plant, and Equipment
C Intangible Assets
D Long-term Assets

15 Can financial statements be prepared directly from the adjusted trial balance?
A They cannot. The general ledger must be used
B Yes, adjusting entries have been recorded in the general journal and posted to the ledger accounts
C No, the adjusted trial balance merely proves the equality of the total debit and total credit balances in the ledger after adjustments are posted. It has no other purpose
D They can because that is the only reason that an adjusted trial balance is prepared

16 The following information is for Acme Auto Supplies:
The total dollar amount of assets to be classified as current assets is
A 220,000
B $150,000
C $300,000
D $180,000

17 A post-closing trial balance is prepared
A After closing entries have been journalized and posted
B Before closing entries have been journalized and posted
C After closing entries have been journalized but before the entries are posted
D Before closing entries have been journalized but after the entries are posted

18 The following information is for Acme Auto Supplies:
The total dollar amount of assets to be classified as investments is
A $0
B $150,000
C $80,000
D $180,000

19 The following selected account balances appear on the December 31, 2010 balance sheet of Chen Co.
Land (location of the corporation’s office building) $150,000
Land (held for future use) 225,000
Corporate Office Building 900,000
Inventory 300,000
Equipment 675,000
Office Furniture 150,000
Accumulated Depreciation 450,000
What is the total amount of property, plant, and equipment that will be reported on the balance sheet?
A $1,950,000
B $1,650,000
C $2,400,000
D $1,425,000

20 A post-closing trial balance should be prepared
A Before closing entries are posted to the ledger accounts
B After closing entries are posted to the ledger accounts
C Before adjusting entries are posted to the ledger accounts
D Only if an error in the accounts is detected

21 The balance in the Prepaid Rent account before adjustment at the end of the year is $15,000, which represents three months’ rent paid on December 1. The adjusting entry required on December 31 is to
A Debit Rent Expense, $5,000; credit Prepaid Rent, $5,000
B Debit Rent Expense, $10,000; credit Prepaid Rent $10,000
C Debit Prepaid Rent, $5,000; credit Rent Expense, $5,000
D Debit Prepaid Rent, $10,000; credit Rent Expense, $10,000

22 Closing entries
A Are prepared before the financial statements
B Reduce the number of permanent accounts
C Cause the revenue and expense accounts to have zero balances
D Summarize the activity in every account

23 uestion: On January 1, 2010, Masters and Masters Company purchased equipment for $30,000. The company is depreciating the equipment at the rate of $700 per month. The book value of the equipment at December 31, 2010 is
A $0
B $8,400
C $21,600
D $30,000

24 James Corporation purchased a one-year insurance policy in January 2010 for $48,000. The insurance policy is in effect from May 2010 through April 2011. If the company neglects to make the proper year-end adjustment for the expired insurance
A Net income and assets will be understated by $32,000
B Net income and assets will be overstated by $32,000
C Net income and assets will be understated by $16,000
D Net income and assets will be overstated by $16,000

25If errors occur in the recording process, they
A Should be corrected as adjustments at the end of the period
B Should be corrected as soon as they are discovered
C Should be corrected when preparing closing entries
D Cannot be corrected until the next accounting period

26 Prepaid expenses are
A Paid and recorded in an asset account before they are used or consumed
B Paid and recorded in an asset account after they are used or consumed
C Incurred but not yet paid or recorded
D Incurred and already paid or recorded

27 Niagara Corporation purchased a one-year insurance policy in January 2010 for $66,000. The insurance policy is in effect from March 2010 through February 2011. If the company neglects to make the proper year-end adjustment for the expired insurance
A Net income and assets will be understated by $55,000
B Net income and assets will be overstated by $55,000
C Net income and assets will be understated by $11,000
D Net income and assets will be overstated by $11,000

28 An accounting time period that is one year in length, but does not begin on January 1, is referred to as
A A fiscal year
B An interim period
C The time period assumption
D A reporting period

29 The balance in the income summary account before it is closed will be equal to
A The net income or loss on the income statement
B The beginning balance in the owner’s capital account
C The ending balance in the owner’s capital account
D Zero

30 Betty Carson has performed $500 of CPA services for a client but has not billed the client as of the end of the accounting period. What adjusting entry must Betty make?
A Debit Cash and credit Unearned Revenue
B Debit Accounts Receivable and credit Unearned Revenue
C Debit Accounts Receivable and credit Service Revenue
D Debit Unearned Revenue and credit Service Revenue