ACCTG 215 Fall 2013 1 Quiz 1 Name: __________________________ Student Number: ___________________ TA: _____________________________ Quiz Section Time: __________________ Instructions: There are 10 multiple-choice questions and 5 quantitative questions on the following pages. Your final answers must be entered in the spaces provided on this cover page in order to be graded. Code of Conduct: By signing below you acknowledge that you are a member of a learning community at the Foster School of Business that is committed to the highest academic standards and that you adhered to these standards while completing this quiz. Specific to this quiz, by signing below you acknowledge that you did not receive or give help to others, nor did you witness others receiving or giving help to others, during the quiz. “By signing below I affirm that I have not received assistance from any other student, that I have not provided assistance to any other students, and that I have not witnessed any students acting unethically during the administration of this quiz.” Signature: _________________________________ Date: _____________________ (Signature required) Multiple Choice Answers: 1 C 2 A 3 B 4 B 5 D 6 E 7 E 8 D 9 B 10 C Quantitative Answers: 11 $10,500 12 $3,500 13 $50,000 14 $6,500 15 $8,800ACCTG 215 Fall 2013 2 Multiple Choice Questions (1 point each) Be sure to record your answers in the spaces provided on the cover sheet. 1. Which of the following bodies enforces GAAP? A. Internal Revenue Service B. Financial Accounting Standards Board C. Securities and Exchange Commission D. International Financial Reporting Standards E. None of the above Answer: C 2. Which of the following best defines stockholders’ equity? A. The residual interest in the assets once all liabilities are satisfied B. The total investment in other companies’ stocks C. Economic resources owned by the company D. The sum of assets and liabilities E. None of the above Answer: A 3. Transactions of a company that include getting a loan from a bank are referred to as: A. Investing Activities B. Financing Activities C. Expenditure Activities D. Operating Activities E. None of the above Answer: BACCTG 215 Fall 2013 3 4. Pumpkin Inc. sold $500 in pumpkins to a customer on account on August 1, 2013. On August 11, 2013 Pumpkin collected the cash from that customer. What is the impact on Pumpkin's accounting equation on August 11th from the collection of cash? A. Assets decrease by $500 and liabilities increase by $500 B. No net effect on the accounting equation C. Assets increase by $500 and liabilities increase by $500 D. Assets decrease by $500 and stockholders’ equity decreases by $500 E. Stockholders’ equity increases by $500 and assets increase by $500 Answer: B 5. The Dividends Payable account appears in which financial statement? A. Statement of Cash Flows B. Income Statement C. Statement of Liabilities D. Balance Sheet E. Statement of Stockholders’ Equity Answer: D 6. Squash Inc. recorded the following transaction: 9/23/13 Accounts Receivable $17,000 Service Revenue $17,000 Which of the following best describes the above transaction? A. Revenue was earned for a cash payment made earlier in the year B. A service was provided to a customer for cash C. A service will be provided to a customer in the future when cash is received D. Accounts Receivable decreased and a service was provided to a customer E. A service was provided to a customer on account Answer: EACCTG 215 Fall 2013 4 7. Which of the following is not a criteria for the revenue recognition principal? A. Delivery has occurred or services have been rendered B. There is persuasive evidence of an arrangement for customer payment C. The price is fixed or determinable D. Collection is reasonably assured E. The customer has a pre-existing contract with the company Answer: E 8. On December 31, 2012 Mashed Company paid $12,000 for insurance that covers January 1, 2013 through June 30, 2013. What is the journal entry that Mashed Company recorded on December 31, 2012? A. Insurance Expense $2,000 Cash $2,000 B. Prepaid Insurance $2,000 Cash $2,000 C. Insurance Expense $12,000 Cash $12,000 D. Prepaid Insurance $12,000 Cash $12,000 E. No Entry Answer: D 9. On 12/1/12 Potato Bakery’s Accounts Receivable balance is $20,000. On 12/4/12 Potato Bakery purchases $2,000 of baking supplies on account. On 12/10/12 Potato Bakery sells $4,000 of cakes on account. On 12/17/12 Potato Bakery receives $3,000 cash for sales made in the past. If no other transactions occur in the month of December, what will Potato Bakery’s Accounts Receivable balance be at 12/31/2012? A. $23,000 B. $21,000 C. $19,000 D. $26,000 E. $24,000 Answer: BACCTG 215 Fall 2013 5 10. On September 1, 2013, Onion Inc. owned land with a value of $400,000 recorded on the balance sheet. On September 15, 2013 Onion sells this land for $480,000 (cash). What is the journal entry Onion will record on September 15? A. Cash $480,000 Land $480,000 B. Cash $400,000 Gain $80,000 Land $480,000 C. Cash $480,000 Land $400,000 Gain $80,000 D. Cash $400,000 Revenue $80,000 Land $480,000 E. None of the above Answer: CACCTG 215 Fall 2013 6 Numeric Questions (1 point each) Be sure to record your final answers in the spaces provided on the cover sheet. Use the following information for the next three questions. Turkey Inc. has the following trial balance as of January 1, 2013: Accounts Debits Credits Common Stock $7,000 Accounts Payable ? Retained Earnings $34,000 Accounts Receivable $4,000 Inventory $2,500 Land $40,000 Buildings $10,000 Loan Payable $2,000 Salaries Payable $8,000 Cash $3,000 Supplies (to be used in 3 months) $500 Turkey has the following transactions during the month of January (assume no other transactions take place): 1) On January 16, 2013 Turkey purchases inventory for $1,500 on account. 2) On January 20, 2013 Turkey pays $500 of its loan payable balance. 3) On