AC 201 Principles of Accounting I Name Version A
Exam 1A- Chapters 1-3
Multiple Choice Questions ( 2 points each) Select the ONE, BEST Answer
1.|External users of accounting information include: E.|All of the above.|| 2.|Accounting certifications include the: E.|All of the above.|| 3.|The major activities of a business include: B.|Financing.|| 4.|The accounting process begins with: A.|Analysis of business transactions and events.|| 5.|A debit is: C.|A decrease in an account.|| 6.|Of the following accounts, the one that normally has a credit balance is: C.|Sales Salaries Payable.|| 7.|A balance column ledger account is: .|B.|An account with debit and credit columns for posting entries and another column for showing the balance of the account after each entry is posted.|C.|D.|E.|| 8.|The time period principle assumes that an organization's activities can be divided into specific time periods including: E.|All of the above.|| 9.|Profit margin is defined as: A.|B.|C.|Net income divided by net sales.|| 10.|A trial balance prepared before any adjustments have been recorded is: A.||B.|Used to prepare financial statements.|||| |On November 1 of the current year, Lois Bell began Lois Bell, Interior Design with an initial investment of $50,000 cash. On November 30 her records showed the following (alphabetically arranged) items and amounts: | Problem #1 (25 points )

.|From the information given, prepare a November income statement. Income StatementFor Nov 1, 2010- Nov 30 2010| Net Sales 17,200
Cost of goods sold 30,000
Gross Profit 47,200

Operating Expenses
Office Furnishings 40,000
Rent 3,600
Telephone 250
Salaries 6,200
Total Operating 29,950

Non Operating 23,000 6000 4250 12000

Balance 28250
Problem #2 ( 30 points )
|Dolly Barton began Barton Office Services in October and during that month completed these transactions: (a) Invested $10,000 cash, and $15,000 of computer equipment.(b) Paid $500 cash for an insurance premium covering the next 12 months.(c) Completed a word processing assignment for a customer and collected $1,000 cash.(d) Paid $200 cash for office supplies.(e) Paid $2,000 for October's rent.Prepare journal entries to record the above transactions. Explanations are unnecessary. Investment 10000 Supplies 15,000Revenue 1000 2000Rent 2000Balance (8000) |
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Problem #3 ( 25 points )
13.|Prior to recording adjusting entries on December 31, a company's Store Supplies account had an $880 debit balance. A physical count of the supplies showed $325 of unused supplies available as of December 31. Prepare the required adjusting entry. Supplies Dec 31 880 Balance 1205 |
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