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ACCT 102 - Introduction to Accounting

Quiz 1 C Summer 2010




NAME: .

STUDENT #: .






General Instructions:

1. Please verify that there are 8 pages including this cover page.

2. Please use non-erasable pen for answering all questions.

3. You have about 60 minutes to write the quiz.

4. Please do NOT engage in any dishonest behaviors during the quiz. Otherwise, you will get zero mark for the quiz.






















True or False Questions: (Indicate as T or F) (6 marks)


1. In a double-entry accounting system, the total amount debited must always equal the total amount credited. ( ) TRUE


2. Increases in liability accounts are recorded as debits. ( ) FALSE


3. A revenue account normally has a debit balance. ( ) FALSE


4. External users include lenders, shareholders, customers, and regulators. ( ) TRUE


5. The accounting equation implies that: Assets + Liabilities = Equity. ( ) FALSE


6. The business entity principle means that a business will continue operating for an indefinite period of time. ( ) FALSE






















Multiple Choice Questions: (10 marks)
Please choose the ONLY ONE correct answer to each question.


1. On September 30, the Cash account of Value Company had a normal balance of $5,000. During September, the account was debited for a total of $12,200 and credited for a total of $11,500. What was the balance in the Cash account at the beginning of September? ( ) A. A $0 balance. B. A $4,300 debit balance. C. A $4,300 credit balance. D. A $5,700 debit balance. E. A $5,700 credit balance.

Beg. Bal. + $12,200 - $11,500 = $5,000 Beg. Bal. $4,300 debit


2. Which of the following groups of accounts are not balance sheet accounts? ( )
A. Assets. B. Liabilities. C. Revenues. D. Equity accounts. E. All of these are balance sheet accounts.


3. On December 15, 2007, Myers Legal Services signed a $50,000 contract with a client to provide legal services to the client in 2008. Which accounting principle would require Myers Legal Services to record the legal fees revenue in 2008 and not 2007? ( )
A. Monetary unit principle B. Going-concern principle C. Cost principle D. Business entity principle E. Revenue recognition principle


4. Wisconsin Rentals purchased office supplies on credit. The general journal entry made by Wisconsin Rentals will include a: ( ) A. Debit to Accounts Payable. B. Debit to Accounts Receivable. C. Credit to Cash.

5. P