Accounting 1 Quiz

Enrichment Program

I. True or False

1. When payment is received for services not yet

rendered, no entry is recorded until that service has
been rendered.
2. The normal balance of Cash is on the credit side
3. In a trial balance, all debits are listed before all
credits.
4. Utilities expense, Supplies and Revenues are called
nominal accounts
5. An account is a storage unit that stores similar items
or transactions
6. It is sometimes correct for a compound entry`s debit
totals and credit totals to be unequal
7. Ledgers are also referred as the Books of Original
Entry
8. When an entity hires a new employee, a recordable
event has occurred
9. Companies use the same standard set of accounts
10. All transactions whether financial or non-financial
are recognizable and must be journalized.

II. Multiple Choice

1. The best definition of assets is
a. The collection of resources belonging to the company
and the sources of, or claims on these resources
b. The cash and properties owned by the company
c. The resources belonging to a company having future
benefits to the company
d. The owner`s investment in the business

2. If an individual asset is increased, then

a. there must be an equal decrease in a specific
liability.
b. there must be an equal decrease in owner’s equity.
c. there must be an equal decrease in another asset.
d. None of these is possible.

3. Sources of increases to owner’s equity are

a. Additional investments by owners
b. Purchases of merchandise
c. Withdrawals by the owners
d. Expenses

4. The concept that the financial statements of an

organization be based on solid evidence.
a. Accounting entity concept
b. Objectivity principle
c. Consistency principle
 d. Materiality concept

5. These are company’s long-term investments where the final

full value within the accounting year
a. Current assets
b. Noncurrent assets
c. Current Liabilities
d. Noncurrent Liabilities

6. It means that the business entity will continue to

operate indefinitely, or at least for twelve months
a. Accrual Basis of Accounting
b. Going Concern Assumption
c. Accounting Entity Concept
d. Monetary Unit Assumption

7. All, but one, are nominal accounts

a. Consulting revenues
b. Utilities Expense
c. Interest Expense
d. Interest Receivable

8. A net loss will result during a time period when

a. Liabilities exceed assets
b. Drawings exceed investments
c. Expenses exceed revenues
d. Revenues exceed expenses

9. Credits
a. Decrease both assets and liabilities
b. Decrease assets and increase liabilities
c. Increase both assets and liabilities
d. Increase assets and decrease liabilities

10. Which of the following is not part of the accounting

process?
a. Recording
a. Identifying
b. Financial decision making
c. Communicating

11. Which of the following is not true of the terms debit

and credit?
a. They can be abbreviated as Dr. and Cr.
b. They can be interpreted to mean increase and decrease
c. They can be used to describe the balance of an account
d. They can be interpreted to mean left and right

12. If total liabilities decreased by $15,000 and owner’s

equity increased by $5,000 during a period of time, then
total assets must change by what amount and direction
during that same period?
 a. $20,000 decrease
b. $20,000 increase
c. $10,000 increase
d. $10,000 decrease

13. If total liabilities increased by $15,000 and owner’s

equity increased by $5,000 during a period of time, then
total assets must change by what amount and direction
during that same period?
a. $20,000 decrease
b. $20,000 increase
c. $10,000 increase
d. $10,000 decrease

14. An accounting time period that is one year in length,

but does not begin on January 1, is referred to as
a. An interim period
b. Fiscal year
c. Calendar Year
d. A reporting period

15. The matching principle matches

a. Customers with businesses
b. Expenses with revenues
c. Assets with liabilities
d. Creditors with businesses

III. Enumeration. (15pts)

1. Enumerate the Accounting Process (In proper order. 10pts)

2. Enumerate the Elements of Financial Statements(5pts)

IV. Journalize the following:

On July 1, 2018, Feeldog started medical practice. During
the month of July, the following transactions were
completed.
July 1 Feeldog invested 42,500 personal funds in the
business
2 Acquired medical equipment costing 95,000 from
Bora Medical Equipment paying
15,000 in cash, and financing the remainder by
issuing a note payable
3 Paid rent for the month 7,500
5 Acquired medical supplies from Bigstar Medical
Supply on account 15,250
7 Received 18,450 cash from patients for medical
services rendered this week
12 Paid salaries of medical technician and
receptionist 9,600
15 Billed patients 51,700 for services rendered
17 Paid Bigstar Medical Supply 3,750 on account
21 Paid miscellaneous expense 1,150
 22 Received 27,500 from patients billed on July 15
26 Billed patients 40,150 for services rendered
27 Paid Bigstar 6,150
28 Withdraw 15,000 for personal use

For the above transactions, use the following accounts:

110 CASH
120 ACCOUNTS RECEIVABLE
130 MEDICAL SUPPLIES
140 MEDICAL EQUIPMENT
210 ACCOUNTS PAYABLE
220 NOTES PAYABLE
310 FEELDOG, CAPITAL
320 FEELDOG, WTIHDRAWAL
410 MEDICAL REVENUES
510 SALARIES EXPENSE
520 RENT EXPENSE
530 LABORATORY EXPENSE
540 MISCELLANEOUS EXPENSE