=========================preview======================
(ACCT2010)[2013](s)quiz~=rfbidkdp^_85226.pdf
Back to ACCT2010 Login to download
======================================================

ACCT2010
Principles of Accounting I
Spring 2013
Quiz I

Name:
Student ID:
Section #:
Instructions:
. This is a closed book quiz.
. Please write your name, student ID, lecture section number on this page (put in the time of the

section if you do not know the section number).
. Answer all the questions within the space provided on the answer sheets.
. No pencil is allowed!

1. Which of the following correctly describes retained earnings?
A. It is the cumulative net income of a company.
B. It represents the investments by stockholders in a company.
C. It equals total assets minus total liabilities.
D. It is the cumulative net income of a company less dividend declarations.
Answer: __D_
2. Which of the following properly describes the impact on the financial statements when a company reports wage expense of $7,500, of which $2,500 remains unpaid?
A. Net income decreased $9,000.
B. Net income decreased $7,500.
C. Cash decreased $2,500.
D. Cash decreased $7,500.
Answer: __B_
3. A corporation purchased factory equipment using cash. Which of the following statements regarding this purchase is false?
A. The current years net income for will be reduced by the cost of the factory
equipment.

B. The total assets will not change.
C. The total liabilities will not change.
D. The current stockholders equity will not change.
Answer: __A_
4. Which of the following transactions will not change a companys total stockholders equity?
A. Reporting of net income.
B. Issuing stock to stockholders in exchange for cash.
C. The declaration of a cash dividend.
D. Paying for accounts payable.
Answer: _D__
5. Boones Cleaning Service performed cleaning services during December, 2010, but had not collected any cash from its customers as of December 31, 2010. What impact did performing these services have on the accounting equation?
A. The service increased assets and increased liabilities.
B. The service increased assets and increased stockholders equity.
C. The service increased assets and decreased stockholders equity.
D. The service decreased liabilities and increased stockholders equity.
Answer: __B_
David Chan began his business of David CPA LLP on January 1, 2012. The following transactions occurred in January 2012, the first month of operations: a) David invested $15,000 cash and office equipment valued at $6,000 as shareholders contribution. b) Purchased $7,000 of office equipment from Johnson Bros., paid $2,000 cash and signed a two-year note for the balance. c) Completed $8,000 of auditing service for clients, received $3,000 cash the rest will be received next month. d) Paid three months rent for the office space at $1,000 per month on January 31, 2012.
The payment was for the three months starting from January 1, 2012. e) Incurred and paid $2,000 cash for employee wages. f) Declared and paid $1,000 cash dividends.
David CPA uses th