In the event of a tie, the score on the last ten questions will be used as a tie-breaker.

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1 NEW YORK STATE ASSOCIATION FUTURE BUSINESS LEADERS OF AMERICA SPRING DISTRICT MEETING ACCOUNTING I 2010 TEST DIRECTIONS 1. Complete the information requested on the answer sheet. PRINT your name on the first line following the word NAME. On the subject line write the name of the event: ACCOUNTING I. On the date line, write the name of your CHAPTER. On the Test No. line, write the number of YOUR DISTRICT. DO NOT OPEN THIS TEST UNTIL GIVEN PERMISSION TO DO SO 2. All answers will be recorded on the answer sheet. DO NOT WRITE on the test booklet at any time, and DO NOT check items there. Scrap paper will be provided. 3. READ each question carefully before answering. When you have decided which answer is correct, find the space on the answer sheet following the number of the problem and with a pencil blacken the entire space in the proper column. DO NOT make and OTHER pencil marks on the answer sheet. If you change your mind, erase your first answer completely. 4. Be sure you use a No. 2 pencil with an eraser. 5. You are allowed 30 minutes for the test. You will be given a starting signal and a warning after 20 minutes have elapsed. In the event of a tie, the score on the last ten questions will be used as a tie-breaker.

2 1. Which group of accounts would be found on the post closing trial balance? a. Assets, costs, and expenses b. Assets, liabilities and capital c. Assets, liabilities and expenses d. Revenue, costs, and expenses 2. After all the closing entries are recorded and posted, which account would still have a balance? a. Income Summary b. Owner s Withdrawals c. Owner s Capital d. Purchases 3. In the General Ledger, the controlling account that summarizes the activities in the customer s ledger is called. a. Accounts Receivable b. Accounts Payable c. Purchases d. Sales 4. Debts owed by a business are referred to as. a. capital b. income c. assets d. liabilities 5. If a business paid $8,000 to its creditors on account, what was the effect of the transaction on the accounting equation? a. An increase in an asset and an increase in a liability b. A decrease in an asset and a decrease in a liability c. An increase in an asset and an increase in owner s equity d. An increase in one asset and a decrease in another asset 6. Which journal entries are used at the end accounting period to clear the balances from the temporary accounts, so that these accounts may be used in accumulation data for preparing the next period s statement? a. Correcting entries b. Closing entries c. Adjusting entries d. Opening entries 7. Assets are generally listed on the balance sheet in order of. a. alphabetic b. generic c. chronological d. liquidity 2

3 8. Which item on the bank reconciliation statement would require the business to record a journal entry? a. Deposit in transit b. Outstanding check c. Canceled check d. Bank service charge 9. The major purpose for maintaining a petty cash fund is to. a. make change for customers b. cash employee paychecks c. issue money for small business expenditures d. have cash available to start each business day 10. An outstanding check is one that has. a. been voided b. been deposited c. not been written d. not been paid 11. Which account is not a fixed (plant) asset? a. Office Supplies b. Equipment c. Building d. Land 12. Entries to record expired insurance and the amount of supplies used are examples of entries. a. reversing b. adjusting c. opening d. closing 13. Billy s Emporium has assets totaling $58,500 and liabilities totaling $7500. The owner s equity of the business equals. a. $66,000 b. $58,000 c. $51,000 d. $7, On a worksheet, if the Trial Balance debit column is larger than the Trial Balance credit column, it would indicate a(n). a. net income b. net loss c. error d. none of the above 3

4 15. The financial rights to the assets of a business are called. a. Liabilities b. Assets c. Equities d. Expenses 16. Debiting a utility expense of $50 and crediting cash for $50 has what effect on the Income Statement? a. Overstated by $50 b. Understated by $50 c. Overstated by $100 d. None of the above 17. Money received for services would increase the accounts. a. Cash in Bank and Accounts Payable b. Office Furniture and Revenue c. Cash in Bank and Revenue d. Cash in Bank and Accounts Receivable 18. A proof of the equality of the debits and credits in the general ledger is called a(n). a. Income Statement b. Reconciliation c. Trial Balance d. Work Sheet 19. A liability account that summarizes the amounts owed to all creditors is called. a. Accounts Payable b. Accounts Receivable c. Sales d. Purchases 20. Income summary is a account. a. revenue b. liability c. temporary capital d. none of the above 21. To close the revenue account, the revenue account balance for the fiscal period is transferred to. a. Income Summary b. Capital c. Cash d. an expense account 4

5 22. Entries in a Purchases Journal affect account balances in the. a. Accounts Payable Ledger and the General Ledger b. Accounts Payable Ledger and the Accounts Receivable Ledger c. Accounts Receivable Ledger and the General Journal d. Accounts Payable Ledger and the Sales Journal 23. After posting the closing entry the sales account has a balance. a. debit b. credit c. zero d. beginning 24. Which of the following is not closed at the end of the accounting period? a. Sales b. Income Summary c. Withdrawals d. Capital 25. Which entry would cause the accounting equation to remain the same? a. Owner invested $10,000. b. Payment was made on account. c. Cash was collected from a customer on account. d. Cash was used to pay an expense. 26. The ABC Corporation purchased $80,000 of office equipment on account. This transaction would. a. cause no change in total assets b. increase owner s equity by $80,000 c. decrease assets by $80,000 d. increase liabilities by $80, F.O.B. Shipping Point means title. a. passes at shipping point; seller pays the transportation costs b. passes at shipping point; buyer pays the transportation costs c. does not pass at shipping point; however buyer is responsible for transportation costs d. none of the above 28. Which of the following is a permanent account? a. Insurance Expense b. Sales c. Withdrawals d. Cash 5

6 29. A journal can best be defined as a(n). a. alphabetical listing of business transactions b. collection and verification of business records c. transfer of increases and decreases to accounts d. chronological listing of all business transactions 30. A source document for recording sales is a. a. register tape b. check stub c. memorandum d. purchase requisition 31. The term debit refers to. a. the left side of an account b. the right side of the account c. a decrease in an asset account d. an increase in a liability account 32. Which item does not belong on a balance sheet? a. Mortgage Payable b. Notes Payable c. Rent Expense d. Capital 33. The accounts receivable subsidiary ledger is a listing of all. a. creditors b. vendors c. suppliers d. customers 34. A transaction involving the buying of merchandise on credit would be recorded in the Journal. a. Cash Payments b. Sales c. Purchases d. Cash Receipts 35. Which document is used to aid in the development of the financial statements? a. Income Statement b. Work Sheet c. Trial Balance d. General Journal 6

7 36. When journalizing a transaction during the month to the sales journal, goes in the posting reference column? a. a checkmark or dash b. an account number c. nothing d. a page number 37. Which statement is true concerning the Sales journal? a. Cash is always debited. b. Accounts Payable is always credited. c. Accounts Receivable is always debited and Sales is always credited. d. Cash is always debited and Sales is always credited. 38. Which of the following general ledger accounts is considered to be a controlling account for a subsidiary ledger? a. Cash b. Merchandise Inventory c. Accounts Receivable d. Capital 39. If the revenue totaled $45,000 and the expenses totaled $75,000 the result would be a net. a. income of $30,000 b. loss of $30,000 c. income of $120,000 d. loss of $75, What is the normal balance of the Sales Discount and Sales Returns and Allowances accounts? a. Credit balance b. Zero balance c. Differential balance d. Debit balance 41. Mickey earns $20 per hour and is paid 1.5 his regular rate of pay for all hours over 40. Last week he worked 60 hours. What is his gross pay? a. $1200 b. $800 c. $1400 d. $1500 7

8 42. If a charge customer owes $1200 and is given a 2% cash discount the amount recorded in the Accounts Receivable Credit column of the cash receipts journal is. a. $1176 b. $24 c. $1200 d. $ If an error is recorded in a journal entry,. a. cancel the error by drawing a neat line through the error b. correct the entry by writing the correct item above the canceled error c. do not erase the incorrect item d. all the above 44. Which federal tax is paid by both the employee and the employer? a. Federal income tax b. FICA tax c. State unemployment tax d. New York State income tax 45. When Cash is debited and Sales is credited, what journal is used to record the transaction? a. Sales Journal b. Cash Receipts Journal c. Purchases Journal d. Cash Payments Journal 46. An asset account with a $600 beginning balance, no deductions, and a $1,000 ending balance, would have the following amount recorded in it entry. a. $600 credit b. $600 debit c. $400 debit d. none of the above 47. ABC Co. pays cash to the XYZ Co., a creditor, for an amount owed. How would the entry be recorded on the books of ABC Co.? a. Debit Cash and credit Accounts Receivable/XYZ Co. b. Debit Cash and credit Accounts Payable/XYZ Co. c. Debit Accounts Receivable/XYZ Co. and credit Cash d. Debit Accounts Payable/XYZ Co. and credit Cash 48. The cash investment by the owner into the business would be recorded as a. a. Debit to Cash and a credit to Withdrawals b. Debit to Cash and a credit to Capital c. Debit to Withdrawals and a credit to Capital d. Debit to Sales and a credit to Cash 8

9 49. A credit entry would. a. increase an asset b. decrease a liability c. increase a revenue d. decrease capital 50. When a business gives a customer a cash refund instead of a credit for a sales return, the entry is recorded in the Journal. a. Sales b. General c. Cash Payments d. Purchases 9

10 1. b 31. a 2. c 32.c 3. a 33.d 4. d 34. c 5 b 35. b 6. b 36. c 7. d 37. c 8. d 38. c 9. c 39. b 10. d 40. d 11. a 41. c 12. b 42. c 13. c 43. d 14. c 44. b 15. c 45. b 16. d 46. c 17. c 47. d 18. c 48. b 19. a 49. c 20. c 50. c 21. a 22. a 23. c 24. d 25. c 26. d 27. b 28. d 29. d 30. a ANSWER KEY 10

In the event of a tie, the score on the last ten questions will be used as a tie-breaker.

In the event of a tie, the score on the last ten questions will be used as a tie-breaker. NEW YORK STATE ASSOCIATION FUTURE BUSINESS LEADERS OF AMERICA SPRING DISTRICT MEETING ACCOUNTING II 2010 TEST DIRECTIONS 1. Complete the information requested on the answer sheet. PRINT your name on the

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