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BAM 110 Unit 2

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Question;1. A form used to organize and check data;before preparing financial reports is known as a(n);a.;trial balance;b.;income statement;c.;balance sheet;d.;worksheet;2. Equipment with a cost of $150,000 has an;accumulated depreciation of $100,000. What is;the historical cost of the equipment?;a.;$150,000;b.;$50,000;c.;$200,000;d.;$100,000;3. Bailey?s received its electric bill for;December on December 31, but did not pay nor record it in the general journal. This resulted in;a.;understated assets;b.;overstated net income;c.;overstated liabilities;d.;understated capital;4. The adjusted trial balance columns;a.;help to ensure the ledger is still in balance;b.;help to identify any errors that may have been made during adjustment;c.;show updated account balances to aid in preparation of the financial;statements;d.;All of the above.;5. The capital balance amount shown in the;balance sheet column of the worksheet represents;a.;the beginning capital plus net income;b.;the beginning capital plus net income less withdrawal;c.;the beginning capital less withdrawals;d.;the beginning capital plus any investments to capital that occurred;during the period;BAM 110 Introduction to Accounting;6. On a worksheet, the income statement;debit column totals $10,200 and the credit column totals $10,000. Which of the following statements;is correct?;a.;The company had a net loss of $200.;b.;The company had a net income of $200.;c.;The company?s revenues were greater than expenses.;d.;None of the above are correct.;7. Adjusting journal entries;a.;need not be journalized since they appear on the worksheet.;b.;need not be posted if the financial statements are prepared from the;worksheet.;c.;are not needed if closing entries are prepared.;d.;must be journalized and posted.;8. Accounts in which the balances are;carried over from one accounting period to the next are called;a.;real accounts;b.;nominal accounts;c.;temporary accounts;d.;zero accounts;9. Closing entries;a. need not be journalized since they appear;on the worksheet;b.;need not be posted if the financial statements are prepared from the;worksheet;c.;are not needed if adjusting entries are prepared;d.;must be journalized and posted;10. The entry to close income summary (net;loss) was entered in reverse?income summary was debited and capital was credited. This;error will cause;a.;income summary to have a credit balance;b.;income summary to have a debit balance;c.;the assets to be overstated;d.;the liabilities to be overstated;Unit 2 Examination;75;BAM 110 Introduction to Accounting;11. In the normal accounting cycle, the;a.;financial statements are prepared after the adjusting entries are posted;b.;financial statements are prepared before the adjusting entries are;posted;c.;adjusting and closing entries are journalized before the financial;statements are prepared d. post-closing trial balance is prepared;before the closing entries are posted;12. Closing entries will;a.;increase the owner?s capital;b.;decrease the owner?s capital balance;c.;either increase or decrease owner?s capital;d.;not affect the owner?s capital balance;13. The adjusting entry to record;depreciation for the company automobile would be;a.;debit accumulated depreciation, automobile, credit depreciation;expense, automobile;b.;debit accumulated depreciation, automobile, credit automobile;c.;debit depreciation expense, automobile, credit accumulated depreciation;auto mobile;d.;debit depreciation expense, automobile, credit automobile;14. Internal control over a company?s;assets should include the following policy;a.;responsibilities and duties of employees will be divided;b.;all cash receipts will be deposited into the bank the same day they;arrive;c.;all cash payments will be made by check (except petty cash);d.;All of the above.;15. Company policy for internal control;should include all of the following except;a.;employees will be rotated;b.;monthly bank statements should be sent to and reconciled by the same;employees who authorize payments and write checks;c.;the owner (or responsible employee) signs all checks after receiving;authorization to pay from the;departments concerned;d.;at time of payment, all supporting invoices or documents will be stamped;?paid?;16. If the written amount on the check does;not match the amount expressed in figures, the bank may;a.;pay the amount written in words;b.;return the check unpaid;c.;contact the drawer to see what was meant;d.;All of the above.;Unit 2 Examination;76;BAM 110 Introduction to Accounting;17. The bank would issue a credit;memorandum to Maria?s Life Management when the bank;a.;received the deposits in transit b. collects a note receivable from a;customer c. discovered a check;that was deposited was returned for nonsufficient funds d. None of the above.;18. How would outstanding checks be handled;when reconciling the ending cash balance per the bank statement to the correct adjusted;cash balance?;a.;They would be added to the balance of the bank statement.;b.;They would be subtracted from the balance of the bank statement.;c.;They would be added to the balance per books.;d.;They would be ignored.;19. A petty cash fund is set up;a.;to pay for large expenses;b.;to pay for small expenses;c.;for the owner to withdraw money for personal use conveniently;d.;None of the above.;20. A pay period is defined as;a.;weekly;b.;bi-weekly;c.;monthly;d.;All of the above.;21. Gross earnings are the same as;a.;regular earnings only b.;regular earnings + overtime earnings c. net earnings d. net earnings + overtime earnings;22. Bob Hill?s hourly rate is $25.00, and;he worked 38 hours during the week. What is his gross pay for the week?;a.;$950;b.;$780;c.;$1,000;d.;$975;Unit 2 Examination;77;BAM 110 Introduction to Accounting;23. Another name for the Fair Labor;Standards Act is;a.;Federal Insurance Contribution Act;b.;Federal Wage and Hour Law;c.;Federal Income Tax Act;d.;Federal Hourly Law;24. Which of the below allowances would;have the least amount of taxes withheld for federal income tax purposes?;a.;S-1;b.;S-0;c.;S-3;d.;S-2;25. Blue?s Tax Service has two types of;employees: management and clerical support. The company estimates that it will pay the;clerical support $300,000 next year and the managers $255,000. For every $100, the company;pays $0.14 into the workers? compensation;insurance. Calculate the amount of workers? compensation insurance.;a.;$777;b.;$336;c.;$441;d.;None of the above.

 

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