1. On September 30, the Cash account of Value Company had a normal balance of $6,000. During September, the account was debited for a total of $13,200 and credited for a total of $12,500. What was the balance in the Cash account at the beginning of September?
A $6,700 debit balance.
A $5,300 credit balance.
A $0 balance.
A $5,300 debit balance.
A $6,700 credit balance.
2. On April 30, Holden Company had an Accounts Receivable balance of $19,800. During the month of May, total credits to Accounts Receivable were $53,800 from customer payments. The May 31 Accounts Receivable balance was $14,800. What was the amount of credit sales during May?
$34,600.
$58,800.
$5,000.
$48,800.
$53,800.
3. During the month of February, Hoffer Company had cash receipts of $8,700 and cash disbursements of $9,800. The February 28 cash balance was $3,000. What was the January 31 beginning cash balance?
$0.
$4,900.
$1,100.
$4,100.
$1,900.
4. The following transactions occurred during July:
1. Received $1,080 cash for services provided to a customer during July.
2. Received $4,000 cash investment from Barbara Hanson, the owner of the business.
3. Received $930 from a customer in partial payment of his account receivable which arose from sales in June.
4. Provided services to a customer on credit, $465.
5. Borrowed $7,800 from the bank by signing a promissory note.
6. Received $1,430 cash from a customer for services to be rendered next year.
What was the amount of revenue for July?
$1,545.
$15,240.
$1,080.
$2,975.
$3,905.
5. Zed Bennett opened an art gallery and as a dealer completed these transactions:
1. Started the gallery, Artery, by investing $42,500 cash and equipment valued at $20,500.
2. Purchased $120 of office supplies on credit.
3. Paid $1,450 cash for the receptionist’s salary.
4. Sold a painting for an artist and collected a $5,000 cash commission on the sale.
5. Completed an art appraisal and billed the client $450.
What was the balance of the cash account after these transactions were posted?
$13,930.
$66,880.
$46,050.
$14,380.
$46,380.
6. At the beginning of January of the current year, Thomas Law Center’s ledger reflected a normal balance of $55,200 for accounts receivable. During January, the company collected $18,000 from customers on account and provided additional services to customers on account totaling $14,100. Additionally, during January one customer paid Thomas $6,600 for services to be provided in the future. At the end of January, the balance in the accounts receivable account should be:
$3,900.
$51,300.
$52,500.
$57,900.
$59,100.
7. During the month of March, Cooley Computer Services made purchases on account totaling $44,300. Also during the month of March, Cooley was paid $8,800 by a customer for services to be provided in the future and paid $37,300 of cash on its accounts payable balance. If the balance in the accounts payable account at the beginning of March was $78,100, what is the balance in accounts payable at the end of March?
$76,300.
$5,300.
$85,100.
$7,000.
$93,900.
8. On January 1 of the current year, Bob’s Lawn Care Service reported owner’s capital totaling $124,300. During the current year, total revenues were $97,800 while total expenses were $83,700. Also, during the current year Bob withdrew $21,800 from the company. No other changes in equity occurred during the year. If, on December 31 of the current year, total assets are $196,000, the change in owner’s capital during the year was:
An increase of $7,700.
Impossible to determine from the information provided.
An decrease of $35,900.
A decrease of $7,700.
A increase of $35,900.
9. Andrea Conaway opened Wonderland Photography on January 1 of the current year. During January, the following transactions occurred and were recorded in the company’s books:
1. Conaway invested $17,000 cash in the business.
2. Conaway contributed $23,500 of photography equipment to the business.
3. The company paid $2,800 cash for an insurance policy covering the next 24 months.
4. The company received $7,100 cash for services provided during January.
5. The company purchased $6,900 of office equipment on credit.
6. The company provided $3,100 of services to customers on account.
7. The company paid cash of $1,850 for monthly rent.
8. The company paid $3,450 on the office equipment purchased in transaction #5 above.
9. Paid $310 cash for January utilities.
Based on this information, the balance in the cash account at the end of January would be:
$49,500.
$15,690.
$22,900.
$19,100.
$17,000.
10. Andrea Conaway opened Wonderland Photography on January 1 of the current year. During January, the following transactions occurred and were recorded in the company’s books:
1. Conaway invested $18,000 cash in the business.
2. Conaway contributed $24,500 of photography equipment to the business.
3. The company paid $3,000 cash for an insurance policy covering the next 24 months.
4. The company received $7,500 cash for services provided during January.
5. The company purchased $7,100 of office equipment on credit.
6. The company provided $3,200 of services to customers on account.
7. The company paid cash of $1,950 for monthly rent.
8. The company paid $3,550 on the office equipment purchased in transaction #5 above.
9. Paid $320 cash for January utilities.
Based on this information, the balance in the Andrea Conaway, Capital account reported on the Statement of Owner’s Equity at the end of the month would be:
$39,500.
$50,000.
$40,600.
$50,930.
$40,280.
11. Stride Along has total assets of $555 million. Its total liabilities are $175 million. Its equity is $380 million. Calculate the debt ratio.
31.7%.
14.6%.
46.1%.
31.5%.
14.0%.
12. At the end of the current year, Norman Company reported total liabilities of $340,000 and total equity of $140,000. The company’s debt ratio on the last year-end was:
48.6%.
41.2%.
70.8%.
20.6%.
Cannot be determined from the information provided.
13. At the beginning of the current year, Taunton Company’s total assets were $253,000 and its total liabilities were $177,500. During the year, the company reported total revenues of $98,000, total expenses of $78,500 and owner withdrawals of $5,500. There were no other changes in owner’s capital during the year and total assets at the end of the year were $265,000. Taunton Company’s debt ratio at the end of the current year is:
70.2%.
66.2%.
33.8%.
51.0%.
Cannot be determined from the information provided.
14. A company had the following accounts and balances year-end:
Cash$30,500
Accounts receivable32,500
Accounts payable20,100
Fees earned66,200
Rent expense15,100
Insurance expense4,900
Supplies5,100
Sam, Capital19,900
Sam, Withdrawals18,100
If all of the accounts have normal balances, what are the totals for the trial balance?
$46,200.
$68,100.
$106,200.
$212,400.
$189,200.
15. An accountant has debited an account for $4,300 and credited a liability account for $2,600. Which of the following would be an incorrect way to complete the recording of this transaction?
Credit an expense account for $1,700.
Credit another asset account for $1,700.
Credit the owner’s capital account for $1,700.
Debit another asset account for $1,700.
Credit another liability account for $1,700.
16. A $30 credit to Sales was posted as a $210 credit. By what amount is Sales in error?
$30 understated.
$180 overstated.
$210 overstated.
$180 understated.
$210 understated.
17. A trial balance taken at year-end showed total credits exceed total debits by $6,210. This discrepancy could have been caused by:
A net income of $6,210.
An error in the general journal where a $6,210 increase in Accounts Payable was recorded as a decrease in Accounts Payable.
The balance of $62,100 in Accounts Payable being entered in the trial balance as $690.
An error in the general journal where a $6,210 increase in Accounts Receivable was recorded as an increase in Cash.
The balance of $6,900 in the Office Equipment account being entered on the trial balance as a debit of $690
18. A $220 credit to Office Equipment was credited to Fees Earned by mistake. By what amounts are the accounts under- or overstated as a result of this error?
Office Equipment, overstated $220; Fees Earned, understated $220.
Office Equipment, understated $440; Fees Earned, overstated $220.
Office Equipment, overstated $440; Fees Earned, understated $220.
Office Equipment, understated $220; Fees Earned, overstated $220.
Office Equipment, overstated $220; Fees Earned, overstated $220.
19. Hal Smith opened Smith’s Repairs on March 1 of the current year. During March, the following transactions occurred and were recorded in the company’s books:
1. Smith invested $27,500 cash in the business.
2. Smith contributed $105,000 of equipment to the business.
3. The company paid $2,500 cash to rent office space for the month.
4. The company received $18,500 cash for repair services provided during March.
5. The company paid $6,700 for salaries for the month.
6. The company provided $3,500 of services to customers on account.
7. The company paid cash of $550 for monthly utilities.
8. The company received $3,600 cash in advance of providing repair services to a customer.
9. Smith withdrew $5,500 for his personal use from the company.
Based on this information, net income for March would be:
$12,250.
$15,850.
$6,750.
$10,350.
$15,950.
20. Hal Smith opened Smith’s Repairs on March 1 of the current year. During March, the following transactions occurred and were recorded in the company’s books:
1. Smith invested $27,000 cash in the business.
2. Smith contributed $104,000 of equipment to the business.
3. The company paid $2,400 cash to rent office space for the month.
4. The company received $18,000 cash for repair services provided during March.
5. The company paid $6,600 for salaries for the month.
6. The company provided $3,400 of services to customers on account.
7. The company paid cash of $540 for monthly utilities.
8. The company received $3,500 cash in advance of providing repair services to a customer.
9. Smith withdrew $5,400 for his personal use from the company.
Based on this information, the balance in Hal Smith, Capital reported on the Statement of Owner’s Equity at the end of March would be:
$140,960.
$137,460.
$132,060.
$9,960.
$15,460.
