ACC 557 Midterm Exam Part 1 Question With Answers
11 May 2016

ACC 557 Midterm Exam Part 1 Question With Answers

 

Question 1

Equipment is classified in the balance sheet as

  • a current asset.
  • property, plant, and equipment.
  • an intangible asset.
  • a long-term investment.

 

Question 2

Correcting entries are made

  • at the beginning of an accounting period.
  • at the end of an accounting period.
  • whenever an error is discovered.
  • after closing entries.

 

Question 3

The first required step in the accounting cycle is

  • reversing entries.
  • journalizing transactions in the book of original entry.
  • analyzing transactions.
  • posting transactions.

 

Question 4

The net income (or loss) for the period

  • is found by computing the difference between the income statement credit column and the balance sheet credit column on the worksheet.
  • cannot be found on the worksheet.
  • is found by computing the difference between the income statement columns of the worksheet.
  • is found by computing the difference between the trial balance totals and the adjusted trial balance totals.

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Question 5

The purpose of the post-closing trial balance is to

  • prove that no mistakes were made.
  • prove the equality of the balance sheet account balances that are carried forward into the next accounting period.
  • prove the equality of the income statement account balances that are carried forward into the next accounting period.
  • list all the balance sheet accounts in alphabetical order for easy reference.

 

Question 6

All of the following are property, plant, and equipment except

  • supplies.
  • machinery.
  • land.
  • buildings.

 

Question 7

The operating cycle of a company is the average time that is required to go from cash to

  • sales in producing revenues.
  • cash in producing revenues.
  • inventory in producing revenues.
  • accounts receivable in producing revenues.

 

Question 8

An accounting time period that is one year in length, but does not begin on January 1, is referred to as

  • a fiscal year.
  • an interim period.
  • the time period assumption.
  • a reporting period.

Download complete answers ofACC 557 Midterm Exam Part 2

 

Question 9

Mary Chain Investments purchased an 18-month insurance policy on May 31, 2015 for $3,600. The December 31, 2015 balance sheet would report Prepaid Insurance of

  • $0 because Prepaid Insurance is reported on the Income Statement.
  • $1,400.
  • $2,200.
  • $3,600.

 

Question 10

A company usually determines the amount of supplies used during a period by

  • adding the supplies on hand to the balance of the Supplies account.
  • summing the amount of supplies purchased during the period.
  • taking the difference between the supplies purchased and the supplies paid for during the period.
  • taking the difference between the balance of the Supplies account and the cost of supplies on hand.

 

Question 11

Depreciation expense for a period is the

  • original cost of an asset – accumulated depreciation.
  • book value of the asset ÷ useful life.
  • portion of an asset’s cost that expired during the period.
  • market value of the asset ÷ useful life.

 

Question 12

If an adjusting entry is not made for an accrued revenue,

  • assets will be overstated.
  • expenses will be understated.
  • stockholders’ equity will be understated.
  • revenues will be overstated.

Mid-Exam Study Guide ACC 557 Midterm Exam

 

Question 13

NWA Air Charter signed a four-month note payable in the amount of $20,000 on September 1. The note requires interest at an annual rate of 9%. The amount of interest to be accrued at the end of September is

  • $150.
  • $200.
  • $600.
  • $1,800.

 

Question 14

At January 31, 2015, the balance in Aislers Inc.’s supplies account was $750. During February, Aislers purchased supplies of $900 and used supplies of $1,125. At the end of February, the balance in the supplies account should be

  • $525 debit.
  • $975 debit.
  • $525 credit.
  • $775 debit.

 

Question 15

Which of the following statements is false?

  • Revenues increase stockholders’ equity.
  • Revenues have normal credit balances.
  • Revenues are a positive factor in the computation of net income.
  • Revenues are increased by debits.

 

Question 16

The first step in posting involves

  • entering in the appropriate ledger account the date, journal page, and debit amount shown in the journal.
  • writing in the journal the account number to which the debit amount was posted.
  • writing in the journal the account number to which the credit amount was posted.
  • entering in the appropriate ledger account the date, journal page, and credit amount shown in the journal.

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Question 17

Transactions in a journal are recorded in

  • account number order.
  • dollar amount order.
  • alphabetical order.
  • chronological order.

 

Question 18

An accountant has debited an asset account for $1,300 and credited a liability account for $500. Which of the following would be an incorrect way to complete the recording of the transaction?

  • Credit an asset account for $800.
  • Credit another liability account for $800.
  • Credit a Stockholders' account for $800.
  • Debit a Stockholders' account for $800.

 

Question 19

A T-account is

  • a way of depicting the basic form of an account.
  • what the computer uses to organize bytes of information.
  • a special account used instead of a trial balance.
  • used for accounts that have both a debit and credit balance.

 

Question 20

Collection of a $1,000 Accounts Receivable

  • increases an asset $1,000; decreases an asset $1,000.
  • increases an asset $1,000; decreases a liability $1,000.
  • decreases a liability $1,000; increases stockholders' equity $1,000.
  • decreases an asset $1,000; decreases a liability $1,000.

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Question 21

Mofro’s Computer Repair Shop started the year with total assets of $300,000 and total liabilities of $200,000. During the year, the business recorded $500,000 in computer repair revenues, $300,000 in expenses, and Mofro paid dividends of $50,000. Stockholders' equity at the end of the year was

  • $200,000.
  • $100,000.
  • $250,000.
  • $300,000.

 

Question 22

The proprietorship form of business organization

  • must have at least three owners in most states.
  • represents the largest number of businesses in the United States.
  • combines the records of the business with the personal records of the owner.
  • is characterized by a legal distinction between the business as an economic unit and the owner.

 

Question 23

The basic accounting equation may be expressed as

  • Assets = Equities.
  • Assets – Liabilities = Stockholders' Equity.
  • Assets = Liabilities + Stockholders' Equity.
  • All of these answers are correct.

 

Question 24

The Duce Company has five plants nationwide that cost a total of $100 million. The current fair value of the plants is $500 million. The plants will be recorded and reported as assets at

  • $100 million.
  • $400 million.
  • $500 million.
  • $600 million.

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Question 25

The accounting equation for Quattro Enterprises is as follows:

Assets              Liabilities       Stockholders' Equity

$120,000      =    $60,000        +       $60,000

If Quattro purchases office equipment on account for $25,000, the accounting equation will change to

Assets           Liabilties       Stockholders' Equity

  • $120,000  =  $60,000   +    $60,000
  • $145,000  =  $60,000   +    $85,000
  • $145,000  =  $72,500   +    $72,500
  • $145,000  =  $85,000   +    $60,000

 

About Author:

This article covers the topic for the Strayed University ACC 557 Midterm Exam Part 1 . The author is working in the field of education from last 5 years. This article covers the questions & answers of ACC 557 . Other topics in the class are as follows:

ACC 557 Week 1 DQ 1

 

ACC 557 Week 1 Homework

 

ACC 557 Week 1 Complete

 

ACC 557 Midterm Exam Part 1

 

ACC 557 Midterm Exam Part 2

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