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Financial Accounting Sample Questions _1_ [DocGiant]

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									            Financial Accounting Sample Questions (1) [DocGiant]

1. If beginning capital was $28,000, ending capital is $65,000, and the owner's
   withdrawals were $31,000, the amount of net income or net loss was:

    Beginning owner’s capital -withdrawals +additional investment +Net income
    (loss)=Owner’s capital at the end of the period

    28,000- 31,000+NI (NL)=65,000
    65,000 – 28,000 + 31,000 = NI
    Net income of $68,000

2. The balance in the prepaid rent account before adjustment at the end of the year is
   $15,000, which represents five months' rent paid on October 1. The adjusting
   entry required on December 31 is:

    $15,000 / 5 months = $3,000
    $3,000 * 3 months = $9,000
    debit Rent Expense, $9,000; credit Prepaid Rent, $9,000

3. The balance in the office supplies account on June 1 was $7,000, supplies
   purchased during June were $5,500, and the supplies on hand at June 30 were
   $2,000. The amount to be used for the appropriate adjusting entry is:

Beginning Supplies+ Supplies purchased during the period-Ending Supplies=Supplies
used
   $7,000 + 5,500 - 2,000 =
   $10,500

4. A business pays weekly salaries of $55,000 on Friday for a five-day week ending
   on that day. The adjusting entry necessary at the end of the fiscal period ending
   on Wednesday is:

    $55,000 / 5 days = $11,000
    $11,000 * 3 days = $33,000
    debit Salary Expense, $33,000; credit Salaries Payable, $33,000

5. The net income reported on the income statement is $68,000. However, adjusting
   entries have not been made at the end of the period for supplies expense of $2,100
   and accrued salaries of $3,000. Net income, as corrected, is:

    $68,000 – 2,100 – 3,000 =
    $62,900

6. If total assets decreased by $29,000 during a period of time and owner's equity increased
    by $23,000 during the same period, then the amount and direction (increase or decrease)
    of the period's change in total liabilities is:
   A=L+OE
   -29,000=L+23,000
   L=-29,000-23,000
   L=-52000, PLEASE NOTE MINUS SIGNIFIES A DECREASE

7. Equipment with an estimated market value of $47,000 is offered for sale at
   $53,000. The equipment is acquired for $7,000 in cash and a note payable of
   $35,000 due in 30 days. The amount used in the buyer's accounting records to
   record this acquisition is

   Please note that based on Cost Concept, market value or offer price is not
   important. What is important is the price paid for the equipment which includes
   the cash payment and the Note Payable. Therefore the computation is:

   $7,000 + $35,000 =
   $42,000
8. If total
								
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