Acc 201 Examination I Sample Fall 2011
I will post this sample examination on the website at http://seattlecentral.edu/~moneil
under ACCT 201. Copy it into a Word or Google Doc document;  then share it with moneil03@seattlecentral.edu.  You can work on this assignment at Friday’s lab.

I.  True or False? Put a T or F to the left of each statement.

  1. Current assets are assets that will be used up or converted to cash within one year.
  2. The formula for the income statement is:  Revenues - Expenses = Net Income.
  3. An increase in a liability is recorded with a debit to a liability account.
  4. Revenues, Expense, Drawing, and the owner’s Capital account are considered owner’s equity accounts.
  5. Unearned Revenue is a Revenue account.
  6. The trial balance proves conclusively that all transactions were correctly analyzed and recorded.
  7. Accrual accounting requires that we record revenues when earned, not necessarily when the cash is received.
  8. Accumulated Depreciation would be considered a liability because it has a credit balance.
  9. If the owner makes a profit (net income) of $20,000, this amount will be added to the owner’s capital account.
  10. An adjustment affects an income statement account and a balance sheet account.

II.  Write the journal entry for each of the following. Suggestion: Use the enter key after each transaction to create some space. Enter your journal entry. 

  1. Owner invested cash in the business, $25,000.
  2. Our company performed consulting services on account, $4000.
  3. Supplies used up during the period amounted to $500.  (Adj.)
  4. The company borrowed $10,000 on a note payable.
  5. The company incurred advertising expense of $800, to be paid next month.
  6. Depreciation is recorded on equipment, $900.  (Adj.)
  7. The company purchased a building for $102,000.  A $12,000 down payment was made, and issued a note payable for the balance of $90,000.
  8. A customer made an advance payment to us for future services in the amount of $200.
  9. The $200 received in number 8 has now been earned. (Adj.)
  10. At the beginning of April the company invested $1000 at 6% interest.  Make the adjustment for interest that has been earned in April. No cash has been received.

IV.  On which statement does each of the following accounts appear?  IS or BS?

  1. Accounts Receivable              
  2. Interest Receivable
  3. Cash
  4. Unearned Revenue                      
  5. Interest Payable     
  6. Equipment
  7. Fees Earned                                   
  8. Interest Revenue     
  9. Salaries Payable
  10. Depreciation Expense                         
  11. Interest Expense          
  12. Notes Payable 
  13. Accumulated Depreciation                
  14. Prepaid Insurance
  15. Supplies Expense

V. Journalize/Post/TB/IS/OE/BS
a. Jones invests $25,000 in the business Jones Consulting.
b. Jones pays rent on an office of $1,000 cash.
c. Jones provides consulting services of $8,000 on account.
d. Jones borrows $10,000 cash and signs a note payable.
e. Jones purchases a $36,000 computer (Equipment), paying $12,000 down; the rest is on account.
f. Jones collects $4,000 cash on account.
g. Adj: Jones records depreciation on the computer equipment, $2,000.
h. Adj: Salaries owed to an employee = $1,200.
i. Adj: Revenue earned at the end of  the month was $1500, but the bills have not been sent out yet.


Create journal entries for the transactions shown above; post to T-accounts; create Adjusted TB, Income Statement, OE Statement and BS. Suggestion: for your computer document, show journal entries and trial balance only. Do the T-accounts on paper--no need to turn them in.


MULTIPLE CHOICE--choose the best answer.
_____1.  Which of the following items is an income statement item?   a. Insurance Expense           b. Prepaid Insurance   c. Unearned Revenue        d. Johnson Capital            
_____2.  Johnson Company had net income of $10,000 in 2011, but the net income in 2012 was $12,000.  By what percent did the net income increase?   A. 10%   b. 20%        c. 100%    d. 2%
_____3.  Johnson purchased a one-year insurance policy on January 1 for $1200.  The insurance expense for January was…a. $1200     b. $100     c. we cannot determine the amount   d. $300.
_____4.  In which of these cases would a debit be made?   A. a liability increases            b. an expense is incurred   c. an asset decreases   d. a revenue is earned            
_____5.  When do we journalize and post adjustments?  A. anytime   b. at the end of the accounting period   c. only on the 15th of the month   d. when an error has been made            
_____6.  Which of the following items shows whether DR=CR?   A. Balance Sheet        b. Income Statement   c. Trial Balance   d. Owner’s Equity Statement            
_____7.  Which of the following is an asset account with a credit balance?                      A. Accumulated Depreciation   b. Land        c. Accounts Payable        d. Accounts Receivable            
_____8.  Which statement would not contain the words “For the Month Ended”?             a. Income Statement   b. Balance Sheet   c. Owner’s Equity Statement   d. all of these would contain the words “For the Month Ended”            
_____9.  Bob puts $1,000 into a bank account that offers 6% interest.  How much interest would Bob earn in one month?        A. $60        b. $600        c. $5   d. $20            
_____10.  Which of the following is not a current asset?         a.  Equipment        b. Prepaid Insurance        c. Cash        d. Accounts Receivable            

 

Other Questions: 

1. State the rules of debit and credit. 

2. Recite the steps in the accounting cycle. 

3. What is the cost principle? 

4.  Define “accrual accounting”. 

5. What are the formulas for the IS, OE, and BS? 

6. How does a trial balance differ from a balance sheet? 

7. Define depreciation—which assets get depreciated?