examination booklet version 1 bookkeeping

Examination BookletVersion 1

Bookkeeping

1

The Accounting Equation

When you feel confident that you understand the material in TheAccounting Equation, log in to your Student Portal to take yourexam. Please submit your exam online for feedback prior to movingto the next lesson.

Questions 1–20: Select the one best answer to each question.

EXAMINATION NUMBER:

98609900

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1. Which of the following best describes an asset?

A. Anything of value owned by the businessB. Always equal to a liabilityC. Listed on the right-hand side of a balance sheetD. Something that a business owes

2. Which of the following best describes a liability?

A. Anything of value owned by the businessB. Something that a business owesC. Listed on the left-hand side of a balance sheetD. Always equal to an asset

The Accounting Equation2

3. Which of the following best describes owner’s equity?

A. Equal to the business’ liabilities less the business’ assetsB. The owner’s interest or worth in the businessC. What the owner owes the businessD. What the business owes

4. All of the following describe a balance sheet except which one?

A. The balance sheet reflects the results of multiple transactions.B. The balance sheet contains assets, liabilities, and owner’s equity sections.C. The balance sheet is a picture of a business in financial terms.D. The balance sheet contains only assets and liabilities sections.

Questions 5–10: For the Blue Top Taxi Company, owned by Tom Cotton, classify each of the

following account descriptions in questions 5–10 by choosing the one best answer.

EXAMPLE: Has $630 in cash

Asset C. BothB. Liability D. Neither

5. Owes First National Bank $350 (Accounts Payable)

A. Asset C. BothB. Liability D. Neither

6. Owns taxi (automobile) worth $1,315


7. Supplies (on hand) worth $20


8. Owes Sam’s Garage $50 (Accounts Payable)


9. Owns equipment worth $35


A.

The Accounting Equation 3

10. Owes Ace Auto Company $500 (Accounts Payable)


Questions 11–13: Using the seven account descriptions above for the Blue Top Taxi Company, determine

this company’s owner’s equity. (Don’t forget to include in your calculation the $630 in cash from the

EXAMPLE.) Then answer questions 11–13.

11. What is the amount of assets for Blue Top Taxi Company?

A. $900 C. $2,000B. $1,100 D. $2,900

12. What is the amount of liabilities for Blue Top Taxi Company?

A. $900 C. $2,000B. $1,100 D. $2,900

13. What is the amount of owner’s equity for Tom Cotton in the Blue Top Taxi Company?

A. $900 C. $2,000B. $1,100 D. $2,900

Questions 14–20: Now you’re ready to prepare your first balance sheet for the Blue Top Taxi Company.

Date the balance sheet June 1, 20— to properly present the information from questions 5–10. Prepare

your balance sheet on the form provided below. Then answer questions 14–20.

The Accounting Equation4

14. Which of the following shows how the heading of the balance sheet should appear?

A. Blue Top Taxi Company C. Blue Top Taxi CompanyBalance Sheet June 1, 20—May 31, 20— Balance Sheet

B. Tom Cotton, Owner D. Blue Top Taxi CompanyBalance Sheet Balance SheetJune 1, 20— June 1, 20—

15. The left-hand side of the balance sheet should include entries for

A. both the assets and the liabilities.B. only the assets.C. both the assets and the owner’s equity.D. only the owner’s equity.

16. The right-hand side of the balance sheet should include entries for

A. only the liabilities. C. both the assets and liabilities.B. both the liabilities and the owner’s equity. D. only the owner’s equity.

17. Which of the following shows how the descriptive entry under owner’s equity should appear?

A. Tom Cotton, Owner C. Tom Cotton, CapitalB. Blue Top Taxi Company D. Ace Auto Company

18. A single ruled line should be drawn on the column line above the amount for all of the following except which one?

A. Total AssetsB. Total LiabilitiesC. Total Liabilities and Owner’s EquityD. Owner’s Equity

19. A double-ruled line should be drawn under the amount for

A. only total assets.B. both total assets and total liabilities and owner’s equity.C. both total assets and total liabilities.D. only total liabilities and owner’s equity.

20. The owner’s equity section of the balance sheet for the Blue Top Taxi Company shows that

A. the Blue Top Taxi Company owes more than it owns.B. Tom Cotton has an interest in the company.C. First National Bank is an owner of the company.D. Tom Cotton owes Sam’s Garage.

5

1. Which of the following statements best describes journalizingtransactions?

A. Journalizing occurs after posting to the ledger.B. Journalizing must be done daily.C. Journalizing is the process where events of business are

recorded in the journal.D. Journalizing can’t be completed until the ledger accounts

have been opened.

2. Which of the following describes the ledger?

A. The ledger is known as the book of original entry.B. The ledger contains the accounts of the business,

categorized by account classification.C. The ledger will determine the accuracy of information

recorded in the journal.D. The ledger contains a list of business transactions,

arranged by date.

The Books of Accounting

When you feel confident that you understand the material in TheBooks of Accounting, log in to your Student Portal to take yourexam. Please submit your exam online for feedback prior to moving tothe next lesson.


EXAMINATION NUMBER:

98610000

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The Books of Accounting6

3. Opening a ledger account involves

A. recording the account title on the ledger page.B. recording the account title and account number on the ledger page.C. recording the account title, account number, and account balance on the ledger page.D. posting the debit amount, credit amount, and source explanation to the ledger page.

4. The first and most important step in the posting procedure is

A. posting the amount.B. posting the date.C. posting the explanation.D. recording the posting reference information.

5. Which of the following statements best describes a chart of accounts?

A. It can contain only 39 accounts.B. It assures the equality of debits and credits.C. It contains the beginning balance for each account in the ledger.D. It’s a list of account titles in the order in which they can be found in the ledger.

6. The source document should be written in the

A. Date column. C. Doc. No. column.B. Account Title column. D. Post. Ref. column.

Use the following information to answer questions 7–10.

The following activity for J. C. Breneman Management Services took place on June 1, 20—.Record these transactions on the journal form provided on the next page.

Received $3,290 in cash from the owner as an investment (receipt no. 1).

Borrowed $900 cash from Inland Bank for business expenses (memo 1).

Paid cash for supplies, $290 (check no. 1).

Paid cash for insurance, $1,000 (check no. 2).

Paid cash for equipment, $2,100 (memo 2).

7. The correct entry in the date column is for all the transactions is

A. June 1. C. Jan. 31.B. Dec. 31. D. Dec. 1.

8. The entries for the debit account titles in the “Account Title” column are written

A. about one-half inch away from the left side.B. in pencil so they may be changed later.C. at the far left side.D. about one inch away from the left side.

9. The amounts that increase the Cash account are entered in

A. the Debit column.B. the Credit column.C. both Debit and Credit columns.D. either Debits or Credit columns.

The Books of Accounting 7

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10. The totals of the entries in the Debit and Credit columns are

A. 12,345.00 in the Debit and 8,220.00 in the Credit columns.B. 7,580.00 in both the Debit and Credit columns.C. 8,220.00 in the Debit and 6,290.00 in the Credit columns.D. 6,290 in both the Debit and Credit columns.


Using the form below, prepare a chart of accounts for J. C. Breneman Management Services.Then post the journal entries from the general journal on page 7 to the ledger accountsprovided on the following pages.

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11. What is the first account number used in the Breneman Management Service Chart ofAccounts?

A. 1 C. 11B. 21 D. 10

12. What is the first account number used in the liabilities division?

A. 20 C. 2B. 21 D. 02

13. What is the account title used for owner’s equity?

A. J. C. Breneman, CapitalB. J. C. Breneman, OwnerC. Breneman Management Service, CapitalD. Capital

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14. The account number 13 tells you that the account

A. is the 13th account in the ledger.B. is the first account in the third division.C. is the third account in the first division.D. was posted on the 13th day of the month.

15. The correct entry in the date column of each ledger account for the BrenemanManagement Service entries is

A. Dec. 31. C. June 1.B. Jan. 31. D. Dec. 1.

16. The Item column of the ledger account for the opening first entry for the ledger accountsshould contain the

A. word Cash. C. account title.B. words Opening Entry. D. word Balance.

17. The Posting Reference entry in the ledger account for the Breneman Management Serviceentries is

A. J1. C. 1.B. J. D. 1J.

18. The first step in posting either a debit or a credit entry from the journal to the ledger is totransfer the

A. amount. C. account number.B. explanation. D. date.

19. After posting the entries from the journal, the Breneman Management Service Ledgershould have at least one debit entry in how many accounts?

A. 4 C. 6B. 5 D. 9

20. After posting the entries from the journal, the Breneman Management Service Ledgershould have at least one credit entry in how many accounts?

A. 2 C. 4B. 3 D. 5

13


Listed below are ledger account titles and account balances, as ofMay 1, for the Platt Hardware Store. Prepare a Chart of Accounts forthe store using Exam Figure 1.

Accounts Payable—Bellhaven Bank—$5,000P. Woodsley, Capital—$5,256.82Cash—$4,056.82Prepaid Insurance—$500Accounts Payable—Taylor Investments—$3,700Equipment—Store—$4,500Equipment—Office—$4,400Supplies—$500

Assets, Liabilities, and Owner’s Equity

When you feel confident that you understand the material in Assets,Liabilities, and Owner’s Equity, log in to your Student Portal to takeyour exam. Please submit your exam online for feedback prior to mov-ing to the next lesson.


EXAMINATION NUMBER:

98610100

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Assets, Liabilities, and Owner’s Equity14

Using your completed Chart of Accounts, choose the one correct answer.

1. The assets division should contain what accounts?

A. 11 P. Woodsley, Capital12 Equipment—Store13 Equipment—Office14 Cash15 Accounts Payable—Taylor Investments

B. 11 Accounts Payable—Bellhaven Bank12 Equipment—Store13 Equipment—Office14 P. Woodsley, Capital15 Cash

C. 11 Cash12 Equipment—Store13 Equipment—Office14 Prepaid Insurance15 Accounts Payable—Taylor Investments

D. 11 Cash12 Prepaid Insurance13 Equipment—Store14 Equipment—Office15 Supplies

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EXAM FIGURE 1

Assets, Liabilities, and Owner’s Equity 15

2. The liabilities division should contain what accounts?

A. 21 Accounts Payable—Bellhaven Bank22 P. Woodsley—Capital

B. 21 Accounts Payable—Bellhaven Bank22 Accounts Payable—Taylor Investments

C. 2122

D. 21 Accounts Payable—Bellhaven Bank22 Merchant’s Bank

3. The owner’s equity division should contain what account(s)?

A. 31 P. Woodsley—CapitalB. 31 P. Woodsley—Capital

32 Merchant’s BankC. 31 Merchant’s Bank

32 P. Woodsley—CapitalD. 31

32


Analyze and prepare journal entries for the following transactions on the form provided inExam Figure 2. Pencil-foot the debit and credit columns.

(A) 5/1—Purchased a new calculator for the office for $690 on account from J. C. Hollings,Inc., memo 3.

(B) 5/2—Purchased $3,500 of equipment for the store on account from Craft Bank, memo 4.

(C) 5/4—Paid cash, $42.92, for supplies, check 4.(D) 5/5—Paid cash, $1,000, to Bellhaven Bank for amount owed on account, (check 5).

4. You record the debit entry for transaction (A) 5/1 in the journal as

Date Description Debit CreditA. May 1 Equipment—Office 690.00B. May 1 Equipment—Office 690.00C. May 1 Calculator 690.00D. May 1 A/P—J. C. Hollings, Inc. 690.00


5. You record the credit entry for transaction (A) 5/1 in the journal as

Date Description Debit CreditA. May 31 J. C. Hollings, Inc. 690.00B. May 1 J. C. Hollings, Inc. 690.00C. May 1 A/P—J. C. Hollings, Inc. 690.00D. May 1 Creditor 690.00

6. You record the debit entry for transaction (B) 5/2 in the journal as

Date Description Debit CreditA. May 2 A/P—Craft Bank 3,500.00B. May 2 A/P—Craft Bank 3,500.00C. May 2 Equipment—Store 3,500.00D. May 2 Merchandise 3,500.00

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7. You record the credit entry for transaction (B) 5/2 in the journal as

Date Description Debit CreditA. May 2 A/P—Craft Bank 3,500.00B. May 2 A/P—Craft Bank 3,500.00C. May 2 Merchandise 3,500.00D. May 2 Equipment—Store 3,500.00

8. The account titles for transaction (C) 5/4 should appear in the Account Title column of thejournal entry as

A. SuppliesCash

B. Equipment—StoreP. Woodsley—Capital

C. CashEquipment—Store

D. P. Woodsley, CapitalCash

9. The account titles for transaction (D) 5/5 should appear in the Account Title column of thejournal entry as

A. Merchant’s BankEquipment—Store

B. CashEquipment—Store

C. A/P—Bellhaven BankCash

D. Inventory—MerchandiseP. Woodsley—Capital

10. Assuming that you’re recording the transactions on the first page of the journal, the pageentry at the top right side of the journal should be

A. One.B. J.C. J1.D. 2.

11. Posting references on the journal should be

A. made when journalizing.B. entered when the journal is totaled.C. entered when posting to the ledger.D. entered in alphabetical order.



First, add Accounts Payable—J. C. Hollings and Accounts Payable—Craft Bank from thetransactions prepared in Exam Figure 2 to the chart of accounts in Exam Figure 1. Next,open all ledger accounts using the form in Exam Figure 3. Then, post the journal entriesfrom Exam Figure 2 to the ledger accounts and balance each ledger account. Be sure topost the balance of each account (from page 13 of the exam) before you post the transac-tions you just journalized.

12. After posting the journal entries to the ledger, what is the balance of the Cash account?

A. Debit $4,056.82 C. Credit $1,042.92B. Credit $3,013.90 D. Debit $3,013.90

13. After posting the journal entries to the ledger, what is the balance of the Equipment—Storeaccount?

A. Debit $4,500 C. Debit $8,000B. Credit $1,500 D. Credit $4,500

14. On May 3, what is the balance of the Equipment—Office account?

A. Debit $5,090 C. Debit $4,400B. Debit $690 D. Credit $5,090

15. What is the balance of the Accounts Payable—Bellhaven Bank account?

A. Debit $1,000 C. Credit $5,000B. Debit $4,000 D. Credit $4,000

16. After posting the journal entries to the ledger, what is the balance of the Supplies account?

A. Debit $500 C. 0B. Debit $542.92 D. Credit $542.92

17. After posting the journal entries to the ledger, what is the balance of the AccountsPayable—Craft Bank account?

A. 0 C. Debit $3,500B. Credit $3,500 D. Credit 0

18. After posting the journal entries to the ledger, the opening balance of the P. Woodsley—Capital account was

A. increased. C. unchanged.B. decreased. D. deleted.


19. What entry do you make in the Post Ref. column of the ledger to show that you posted thetransactions from the journal?

A. 1 C. Leave it blankB. J1 D. 11

20. Asset accounts are increased by

A. entries to the debit side of the account.B. crediting a liability account.C. entries to the right side of the account.D. adding a credit entry to the account’s normal balance.

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23

We based questions 1–8 on the following material and on the infor-mation you prepared for the Platt Hardware Store from theexamination in Assets, Liabilities, and Owner’s Equity.

Analyze the following transactions. Determine the accounts, classifi-cations, and changes involved in the transaction, as shown in thefollowing example.

Paid $20.00 in cash for office cleaning.

Account Classification Increase Decrease

Debit Off. Clean. Expense ___✔___ _______Credit Cash __ Asset _ ________ ___✔____

Revenue, Expenses, and Trial Balance

When you feel confident that you understand the material inRevenue, Expenses, and Trial Balance, log in to your Student Portalto take your exam. Please submit your exam online for feedback priorto moving to the next lesson.


EXAMINATION NUMBER:

98610200

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Revenue, Expenses, and Trial Balance24

(A) 5/8—Paid telephone bill of $154.32 with cash (check 106).


Debit _______ _______ _______ _______Credit _______ _______ _______ _______

(B) 5/9—Paid $15.00 in cash for office cleaning (check 107).


Debit _______ _______ _______ _______Credit _______ _______ _______ _______

(C) 5/10—Received cash for weekly Fees Earned of $1,532.94 (tape 1).


Debit _______ _______ _______ _______Credit _______ _______ _______ _______

(D) 5/11—Made $500.00 payment to Bellhaven Bank, (check 108).


Debit _______ _______ _______ _______Credit _______ _______ _______ _______

(E) 5/14—Paid cash of $1,000.00 for rent for month of May (check 109).


Debit _______ _______ _______ _______Credit _______ _______ _______ _______

(F) 5/15—Received cash of $1,385.03 for weekly Fees Earned (tape 2).


Debit _______ _______ _______ _______Credit _______ _______ _______ _______

(G) 5/16—Paid $15.93 in cash for auto repairs (check 110).


Debit _______ _______ _______ _______Credit _______ _______ _______ _______

(H) 5/17—Paid $430.00 cash to owner for personal use (check 111).


Debit _______ _______ _______ _______Credit _______ _______ _______ _______

Revenue, Expenses, and Trial Balance 25

(I) 5/18—Paid cash of $100.00 for cleaning the office (check 112).


Debit _______ _______ _______ _______Credit _______ _______ _______ _______

(J) 5/23—Paid $253.00 cash to the Daily News newspaper for advertising (check 113).


Debit _______ _______ _______ _______Credit _______ _______ _______ _______

1. In transaction (A) on 5/8, the Cash account is an

A. asset account, which increases.B. expense account, which decreases.C. expense account, which increases.D. asset account, which decreases.

2. In transaction (C) on 5/10, the Fees Earned account is a(n)

A. expense account, which increases.B. revenue account, which increases.C. revenue account, which decreases.D. asset account, which decreases.

3. The A/P—Bellhaven Bank account and the Cash account in transaction (D) on 5/11

A. both increase.B. decrease and increase respectively.C. increase and decrease respectively.D. both decrease.

4. In transaction (E) on 5/14, the account that will increase is the

A. Cash account, which is an asset account.B. Rent Expense account, which is an expense account.C. Rent Expense account, which is an asset account.D. Cash account, which is an expense account.

5. The two accounts that change because of transaction (G) on 5/16 are

A. Auto Expense and Cash.B. Equipment and Cash.C. Auto Expense and Auto Repair.D. Equipment and Owner’s Equity.


6. In transaction (H) on 5/17, the account that increases is the

A. Cash account. C. Payroll Expense account.B. P. Woodsley, Drawing account. D. Employee Asset account.

7. You would classify the account debited in transaction (J) on 5/23, as a(n)

A. asset account. C. revenue account.B. liability account. D. expense account.

8. The Advertising Expense account and the Cash account in transaction (J) on 5/23

A. both increase.B. both decrease.C. increase and decrease respectively.D. decrease and increase respectively.

We based questions 9–15 on the following information.

Journalize the transactions listed on pages 24 and 25 using the journal on page 27 and assignthe proper account numbers to the new accounts.

In answering questions 9–15, use only transactions (A)–(J). Don’t use the example given before(A) on page 23.

Open new ledger sheets for the new accounts on pages 28–33, and post the journal entries tothe general ledger. Balance and foot the ledger accounts. The balances in these ledgeraccounts were brought forward from the exam in Assets, Liabilities, and Owner’s Equity.

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Now answer questions 9–15.

9. What is the balance in the Cash account after you made all the entries?

A. $3,309.30 C. $3,463.62B. $3,363.62 D. $3,643.62

10. What is the balance in the Rent Expense account?

A. $100.00 C. $1,000.00B. $253.00 D. $1,500.00

11. The A/P—Bellhaven Bank account has a debit entry for $500.00. What is the accountbalance?

A. $3,500.00 debit C. $4,500.00 creditB. $3,500.00 credit D. $5,500.00 debit

12. Which of the following statements is true about the Advertising Expense account?

A. It has a single $253.00 credit entry. C. It has a $253.00 debit balance.B. It has a $253.00 credit balance. D. Its account balance is zero.

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13. The P. Woodsley, Capital account balance

A. increased $1,000 during the month of May.B. has a $5,265.82 debit balance.C. has a $4,256.82 credit balance.D. didn’t change during the month of May and

has a $5,256.82 credit balance.

14. What were the postings to the Fees Earned account during May?

A. A credit of $1,532.94 and a debit of $1,385.03B. A credit of $1,532.94 and a credit of $1,385.03C. A debit of $1,532.94 and a credit of $1,385.03D. A debit of $1,532.94 and a debit of $1,385.03

15. The balance in the Office Cleaning Expense account is

A. $115.00 credit. C. $115.00 debit.B. $85.00 debit. D. $15.00 credit.


We based questions 16–20 on the trial balance, which you’ll prepare using the form onthe previous page. First, prepare a trial balance as of May 31, 20—. Then answerquestions 16–20.

16. Which of the following is the correct heading for the trial balance?

A. Platt Hardware StoreMay 31, 20—Trial Balance

B. Trial BalanceMay 31, 20—

Platt Hardware Store

C. Platt Hardware StoreTrial Balance

For the period ending May 31, 20—

D. Platt Hardware StoreTrial Balance

As of May 31, 20—

17. Which of the following best describes the trial balance?

A. It’s a list of all the debit balances and credit balances in the ledger.B. It has the same information in it as the balance sheet.C. It’s prepared after the balance sheet.D. It’s the final statement prepared before closing the books.

18. What is the balance of both the debit and the credit columns in the trial balance?

A. $19,564.79 B. $19,554.79C. $18,357.82 D. $18,552.82

19. The accounts listed on the trial balance with a credit balance include

A. liability, owner’s capital, and revenue accounts.B. asset, liability, and owner’s capital accounts.C. owner’s capital, revenue, and expense accounts.D. liability, owner’s capital, and expense accounts.

20. Revenue and expense accounts are considered temporary accounts because they

A. are used only once in a while.B. are closed out periodically.C. represent the asset and liability accounts.D. are used when preparing the balance sheet.

37

Before you answer any questions, prepare the following for the PlattHardware Store using the forms provided.

I. Worksheet (Use the information from the trial balance in ExamFigure 2. Write the worksheet information on the form in ExamFigure 1.) You’ll need the following adjustment information:

a. P. Woodsley counted the supplies on May 31 and found that the supplies on hand were $342.92.

b. On May 31, Mr. Woodsley checked the insurance recordsand found that the value of insurance coverage remaining was $400.00.

II. Income statement (Use the form in Exam Figure 3.)

III. Balance sheet (Use the form in Exam Figure 4.)

IV. Journalize adjusting and closing entries. (Use the form inExam Figure 5.)

V. Post the adjusting and closing entries. (Use the forms inExam Figure 6.)

VI. Prepare a post closing trial balance. (Use the form in Exam Figure 7.)

Financial Reports

When you feel confident that you understand the material inFinancial Reports log in to your Student Portal to take your exam.Please submit your exam online for feedback prior to moving to thenext lesson.


EXAMINATION NUMBER:

98610300

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Financial Reports38

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Financial Reports 39

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Financial Reports40

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Financial Reports42

EXAM FIGURE 5—Adjusting and Closing Journal Entries

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Financial Reports44

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Financial Reports46

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Financial Reports48

EXAM FIGURE 7—Post Closing Trial Balance

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1. The heading of the worksheet should appear as

A. Platt Hardware StoreMay 31, 20—Worksheet

B. WorksheetPlatt Hardware Store


C. Platt Hardware StoreWorksheet


D. Platt Hardware StoreWorksheet

May 31, 20—

2. What is the total liabilities and owner’s equity in the balance sheet you prepared inExam Figure 4?

A. $5,906.54 C. $17,296.54B. $11,390.00 D. $18,376.26

3. What is the total of the expenses in the income statement you prepared in ExamFigure 3?

A. $1,079.72 C. $2,791.97B. $1,838.25 D. $2,917.97

4. If Prepaid Insurance has a debit balance of $500 in the trial balance and the valueof insurance coverage remaining is $400, what would be the amount of the adjustment?

A. $100 C. $500B. $400 D. $900

5. Which of the following best describes a worksheet?

A. It’s a formal report used to summarize the journal.B. It reports the financial position of a business on a monthly basis.C. It’s used to gather information to be used in preparing financial statements.D. It’s an eight-column report that reports only the position of owner’s equity.

6. What adjusting entry did you make in the journal in Exam Figure 5 for the SuppliesExpense?

A. Credit Supplies Expense $542.92 and debit Supplies $542.92B. Debit Supplies Expense $342.92 and credit Supplies $342.92C. Credit Supplies Expense $200 and debit Supplies $200D. Debit Supplies Expense $200 and credit Supplies $200

Financial Reports50

7. Which of the following is the correct way to determine the net profit, and what is the netprofit?

A. Subtract the total expenses from revenue; the net profit is $2,358.50.B. Add the total expenses to the revenue; the net profit is $2,358.50.C. Subtract the total expenses from revenue; the net profit is $1,079.72.D. Add the total expenses to the revenue; the net profit is $1,0740.90.

8. What is the net profit you reported on the income statement in Exam Figure 3?

A. $2,917.97 C. $1,709.72B. $1,838.25 D. $1,079.72

9. The assets section of the balance sheet should include

A. Cash C. CashEquipment—Store Equipment—OfficeEquipment—Office Equipment—StorePrepaid Insurance P. Woodsley, CapitalInsurance Expense Net Profit

B. Cash D. CashEquipment—Store Prepaid InsuranceEquipment—Office Equipment—StoreSupplies Expense Equipment—OfficeP. Woodsley, Capital Supplies

10. The owner’s equity section of the balance sheet should appear as

A. Owner’s Equity C. Owner’s EquityP. Woodsley, Capital Woodsley, CapitalPlus Net Profit Less DrawingLess P. Woodsley, Drawing Plus Net ProfitTotal Owner’s Equity Total Owner’s Equity

B. Owner’s Equity D. Owner’s EquityP. Woodsley, Capital Less DrawingLess Drawing Plus Net ProfitNet Profit Total Owner’s Equity

11. Which of the following best describes a closing entry?

A. It’s an entry made in the balance sheet to close out the assets.B. It’s an entry made in the trial balance to show a final entry.C. It’s an entry made in the general journal to close a temporary ledger account.D. It’s an entry made in the general ledger to close a permanent ledger account.


12. What entry did you make to close the Fees Earned account?

A. A debit entry of $2,917.97 to the Fees Earned accountB. A credit entry of $2,917.97 to the Fees Earned accountC. A credit entry of $2,917.97 to P. Woodsley, CapitalD. A debit entry of $2,917.97 to P. Woodsley, Capital

13. What entry did you make to close all of the expense accounts?

A. A debit entry of $1,838.25 to the Expense and Revenue SummaryB. A credit entry of $1,838.25 to the Expense and Revenue SummaryC. A debit entry of $1,838.25 to SalesD. A credit entry of $1,838.25 to Sales

14. The entry closing the Expense and Revenue Summary is a

A. debit of $1,079.72 because there’s net profit.B. debit of $1,079.72 because there’s a net loss.C. credit of $1,079.72 because there’s net profit.D. credit of $1,079.72 because there’s a net loss.

15. You would transfer the net profit for a period to

A. an asset account. C. an owner’s equity account.B. a liability account. D. to the general ledger.

16. What will be the balance in the Expense and Revenue Summary on June 1, 20—?

A. A credit of $1,079.72 C. A debit of $1,079.72B. 0 D. A credit of $1,838.25

17. After you made the adjusting entry, what is the balance of the Supplies account?

A. $542.92 debit balance C. $342.92 credit balanceB. $342.92 debit balance D. $200 credit balance

18. What is the balance of the Prepaid Insurance account after you made the adjusting entry?

A. $600 debit balance C. $400 credit balanceB. $600 credit balance D. $400 debit balance

19. What is the balance of the P. Woodsley, Capital account as reported on the post closingtrial balance?

A. $6,766.54 C. $5,256.82B. $5,906.54 D. $4,607.10

20. The total amount of the liability accounts reported on the post closing trial balance is

A. $11,390.00. C. $20,757.72.B. $17,296.54. D. $25,436.00.

examination booklet version 1 bookkeeping

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