9. The financial statement that identifies where a company's cash came from and where it went during the period is the: (Points : 5)
Statement of financial position.
Statement of cash flows.
Balance sheet.
Income statement.
Statement of changes in owner's equity.
10. The balance sheet shows a company's net income or loss due to earnings activities over a period of time. (Points : 5)
True
False
11. In a double-entry accounting system, the total amount debited must always equal the total amount credited.
(Points : 5)
True
False
12. The chart of accounts is a list of all the accounts used by a company and includes an identification number assigned to each account.
(Points : 5)
True
False
13. Wisconsin Rentals purchased office supplies on credit. The general journal entry made by Wisconsin Rentals will include a: (Points : 5)
Debit to Accounts Payable.
Debit to Accounts Receivable.
Credit to Cash.
Credit to Accounts Payable.
Credit to Wisconsin Rentals, Capital.
14. An asset created by prepayment of an expense is:
(Points : 5)
Recorded as a debit to an unearned revenue account.
Recorded as a debit to a prepaid expense account.
Recorded as a credit to an unearned revenue account.
Recorded as a credit to a prepaid expense account.
Not recorded in the accounting records until the earnings process is complete.
15. What is a trial balance? What is its purpose?
(Points : 10)
16. Maria Sanchez began business as Sanchez Law Firm and completed the following transactions. Prepare the journal entries for these transactions. Omit explanations.
(a) Sanchez invested $15,000 cash into the business
(b) Purchased $7,500 of office equipment on credit
(c) Completed legal work for a client and received $1,500 cash for amount owed
(d) Paid $150 cash for month's utility bill
(e) Sanchez withdrew $2,000 cash for personal use. (Points : 10)
17. Explain why ethics are an integral part of accounting.
(Points : 10)
Statement of financial position.
Statement of cash flows.
Balance sheet.
Income statement.
Statement of changes in owner's equity.
10. The balance sheet shows a company's net income or loss due to earnings activities over a period of time. (Points : 5)
True
False
11. In a double-entry accounting system, the total amount debited must always equal the total amount credited.
(Points : 5)
True
False
12. The chart of accounts is a list of all the accounts used by a company and includes an identification number assigned to each account.
(Points : 5)
True
False
13. Wisconsin Rentals purchased office supplies on credit. The general journal entry made by Wisconsin Rentals will include a: (Points : 5)
Debit to Accounts Payable.
Debit to Accounts Receivable.
Credit to Cash.
Credit to Accounts Payable.
Credit to Wisconsin Rentals, Capital.
14. An asset created by prepayment of an expense is:
(Points : 5)
Recorded as a debit to an unearned revenue account.
Recorded as a debit to a prepaid expense account.
Recorded as a credit to an unearned revenue account.
Recorded as a credit to a prepaid expense account.
Not recorded in the accounting records until the earnings process is complete.
15. What is a trial balance? What is its purpose?
(Points : 10)
16. Maria Sanchez began business as Sanchez Law Firm and completed the following transactions. Prepare the journal entries for these transactions. Omit explanations.
(a) Sanchez invested $15,000 cash into the business
(b) Purchased $7,500 of office equipment on credit
(c) Completed legal work for a client and received $1,500 cash for amount owed
(d) Paid $150 cash for month's utility bill
(e) Sanchez withdrew $2,000 cash for personal use. (Points : 10)
17. Explain why ethics are an integral part of accounting.
(Points : 10)
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