1.

The revenue recognition principle dictates that revenue should be recognized in the accounting
records

a.
at the end of the month
b.
in the period that income taxes are paid.
 

c.
when cash is received
d.
when it is earned
2. A flower shop makes a large sale for $1,000 on November 30. The customer is sent a
statement on December 5 and a check is received on December 10. The flower shop follows
IFRS and applies the revenue recognition principle. When is the $1,000 considered to be
earned?

a.
November 30
b.
December 1
c.
December 5
d.
December 10
3. Rusthe Company showed the following balances at the end of its first year:
Cash                                                     $  14,000
Prepaid insurance                                        1,400
Accounts receivable                                     7,000
Accounts payable                                        5,600
Notes payable                                             8,400
Share capital-ordinary                                  2,800
Dividends                                                    1,400
Revenues                                                  42,000
Expenses                                                  35,000
What did Rusthe Company show as total credits on its trial balance?

a.
$61,600
b.
$58,800
c.
$57,400
d.
$60,200

4. All of the following transactions increase revenue except the

a.
sale of clothing  by the French Connection.
b.
sale of additional ordinary shares by British Airways.

c.
sale of pertroleum by Royal Dutch Shell.
 

d.
performance of acccounting services by PricewatershouseCoopers.

5. The usual sequence of steps in the recording process is to analyze each transaction, enter the
transaction in the

a.
book of original entry, and transfer the information to the journal
b.
ledger, and transfer the information to the journal
c.
book of accounts, and transfer the information to the journal
d.
journal, and transfer the information to the ledger accounts.

6. In recording an accounting transaction in a double-entry system

a.
the amount of the debits must equal the amount of the credits.
 b.
there must only be two accounts affected by any transaction
c.
the number of debit accounts must equal the number of credit accounts
d.
there must always be entries made on both sides of the accounting equation
7. On October 3, Josh Antonio, a carpenter, received a cash payment for services previously
billed to a client. Josh paid his telephone bill, and he also bought equipment on credit. For
the three transactions, at least one of the entries will include a
a.
credit to Notes Payable
b.
credit to Retained Earnings
c.
credit to Accounts Payable
d.
debit to Accounts Receivable (harusnya kredit)
8. Southwestern City College sold season tickets for the 2020 football season for $180,000. A
total of 8 games will be played during September, October and November. In September,
two games were played. In October, three games were played. The balance in Unearned
Revenue at October 31 is
a.
$45,000
b.
$0
c.
$67,500
d.
$112,500
9. Hercules Company purchased a computer for $3,600 on December 1. It is estimated that
annual depreciation on the computer will be $720. If financial statements are to be prepared on
December 31, the company should make the following adjusting entry:
a.
Debit Office Equipment, $3,600; Credit Accumulated Depreciation, $3,600
b.
Debit Depreciation Expense, $2,880; Credit Accumulated Depreciation, $2,880
c.
Debit Depreciation Expense, $60; Credit Accumulated Depreciation, $60.
d.
Debit Depreciation Expense, $720; Credit Accumulated Depreciation, $720.
10. Cara, Inc. purchased a building on January 1, 2020 for ₤ 500,000. The useful life of the
building is 10 years. The asset is reported on the December 31, 2020 statement of financial
position at ₤ 450,000. What was the impact of the adjusting entry recorded by Cara, Inc.?

a.
Increased Liabilities ₤ 50,000
b.
Increased Assets ₤ 50,000.
c.
Decreased Equity ₤ 50,000
d.
All of the choices are correct regarding the impact of Cara, Inc.’s adjusting entry at December 31,
2020
11. Posting
a.
Accumulates the effects of ledger entries and transfers them to the general journal
b.
Is done only for income statement activity; activity related to the statement of financial position
does not require posting
c.
is done at least once per year
d.
Is done by posting all the debits and credits of one entry before moving on to the next entry
12. Revenues are

a.
the cost of assets consumed during the period
b.
gross increases in equity resulting from business activities
c.
the cost of services used during the period.
d.
actual or expected cash outflows.
13. If the adjusting entry for depreciation is not made,
a.
equity will be understated
b.
net income will be understated
c.
assets will be understated
d.
expenses will be understated
14. Depreciation is the process of

a.
valuing an asset at its fair value
b.
writing down an asset to its real value each accounting period
c.
allocating the cost of an asset to expense over its useful life in a rational and systematic manner.
d.
increasing the value of an asset over its useful life in a rational and systematic manner.

15. Bee-In-The-Bonnet Company purchased office supplies costing $8,000 and debited Office
Supplies for the full amount. At the end of the accounting period, a physical count of office
supplies revealed $3,200 still on hand. The appropriate adjusting journal entry to be made at
the end of the period would be

a.
Debit Office Supplies, $4,800; Credit Office Supplies Expense, $4,800
b.
Debit Office Supplies Expense, $3,200; Credit Office Supplies, $3,200.
c.
Debit Office Supplies Expense, $4,800; Credit Office Supplies, $4,800
d.
Debit Office Supplies, $3,200; Credit Office Supplies Expense, $3,200.
 

16. At September 1, 2020, Crews Co.  reported equity of ₤136,000. During the month, Crews
generated revenues of ₤20,000, incurred expenses of ₤12,000, purchased equipment for ₤5,000
and paid dividends of ₤2,000. What is the amount of equity at September 30, 2020?

a.
₤136,000
b.
₤137,000
c.
₤142,000
d.
₤8,000
17. Posting of journal entries should be done in

a.
alphabetical order
b.
chronological order
c.
dollar amount order
d.
account number order.
18. Which of the following statements is not true?

a.
Expenses increase equity
b.
Expenses decrease equity
c.
Expenses have normal debit balances
d.
Expenses are a negative factor in the computation of net income
19. On January 20, Ericsson Industries purchased supplies of $500 on account. The entry to record
the purchase will include
a.
a debit to Supplies and a credit to Cash
b.
a debit to Supplies and a credit to Accounts Payable
c.
a debit to Accounts Receivable and a credit to Supplies.
d.
a debit to Supplies Expense and a credit to Accounts Receivable
20. BJ, an employee of Walker Corp., will not receive her paycheck until April 2. Based on
services performed from March 15 to March 30, her salary was $800. The adjusting entry for
Walker Corp. on March 31 is
a.
Salaries Payable......................................................................   800
              Cash............................................................................            800

b.
No entry is required
 c.
Salaries Expense.....................................................................   800
              Salaries Payable.........................................................                800

d.
Salaries Expense......................................................................  800
              Cash............................................................................              800

21. The double-entry system requires that each transaction must be recorded
a.
in two sets of books
b.
in a journal and in a ledger
c.
in at least two different accounts
d.
first as a revenue and then as an expense.
 

22. The expense recognition principle refers to

a.
Letting expenses follow revenues
b.
Dividing the life of the business into artificial time periods.
c.
Matching the revenue reported on the income statement with the receivable reported on the
statement of financial position.
d.
Recognizing revenue in the period when it is earned
23. The retained earnings section of the statement of financial position is determined by

a.
revenues,expenses and dividends
b.
revenues, expenses and share capital.
c.
share capital. dividends and residual equity.
 d.
assets,liabilities anad share capital
24. During February 2020, its first month of operations, the owner of Alona Enterprises invested
cash of $50,000. Alona had cash revenues of $8,000 and paid expenses of $14,000. Assuming
no other transactions impacted the cash account, what is the balance in Cash at February 29?
a.
$44,000 debit
b.
$36,000 credit
c.
$58,000 debit
d.
$6,000 credit

25. The expense recognition principle matches

a.
creditors with businesses.
 

b.
customers with businesses
c.
assets with liabilities
d.
expenses with revenues
26. Sherman Air Charter signed a four-month note payable in the amount of $8,000 on September
1. The note requires interest at an annual rate of 6%. The amount of interest to be accrued at
the end of September is

a.
$160
b.
$120
c.
$480
d.
$40
27. At December 1, 2020, Gibson Company’s accounts receivable balance was €1,800. During
December, Gibson had credit revenues of €7,500 and collected accounts receivable of €6,000.
At December 31, 2020, the accounts receivable balance is
a.
€7,800 debit
b.
€3,300 credit
c.
€3,300 debit
d.
€9,300 debit
28. If an adjusting entry is not made for an accrued revenue,

a.
equity will be understated
b.
expenses will be understated
c.
assets will be overstated
d.
revenues will be overstated
29. At December 31, 2020, before any year-end adjustments, Cable Car Company's Insurance
Expense account had a balance of $1,450 and its Prepaid Insurance account had a balance of
$3,800. It was determined that $3,000 of the Prepaid Insurance had expired. The adjusted
balance for Insurance Expense for the year would be

a.
$1,450.
b.
$2,250.
c.
$4,450.
d.
$3,000.
30. At October 1, 2020, Padilla Industries had an accounts payable balance of $30,000. During the
month, the company made purchases on account of $25,000 and made payments on account of
$40,000. At October 31, 2020, the accounts payable balance is

a.
$15,000.
b.
$10,000
c.
$40,000
d.
$30,000
31. At January 1, 2010, LeAnna Industries reported retained earnings of $130,000. During 2011,
LeAnna had a net loss of $30,000 and paid dividends of $20,000. At December 31, 2011, the
amount of retained earnings is

a.
$140,000
b.
$100,000.
c.
$130,000
d.
$80,000.

32. If total liabilities increased by $4,000, then

a.
equity must have increased by $4,000
b.
assets must have decreased by $4,000.
c.
assets must have increased by $4,000, or equity must have decreased by $4,000
d.
assets and equity each increased by $2,000.
33. A company spends $10 million dollars for an office building. Over what period should the cost
be written off?
a.
When the $10 million is expended in cash
b.
Over the useful life of the building
c.
After $10 million in revenue is earned
d.
All in the first year
34. Which of the following is incorrect regarding a trial balance?
 a.
It proves that the debits equal the credits after posting
b.
A trial balance is useful in the preparation of financial statements.
c.
It proves that the company has recorded all transactions
d.
A trial balance uncovers errors in journalizing and posting
35. As of December 31, 2011, Dolce & Gabanna Inc. had assets of €5,700,000, share capital
of €2,100,000 and retained earnings of €2,400,000. Total liabilities as of that date are

a.
€10,200,000
b.
€0.
c.
€14,500,000
d.
€1,200,000
36. Collection of a $500 Accounts Receivable (piutangnya dibayar)

a.
increases an asset $500; decreases a liability $500.
b.
increases an asset $500; decreases an asset $500.
c.
decreases a liability $500; increases equity $500.
d.
decreases an asset $500; decreases a liability $500
37. Omega Company pays its employees twice a month, on the 7 th and the 21st. On June 21, Omega
Company paid employee salaries of $4,000. This transaction would
a.
increase equity by $4,000
b.
decrease net income for the month by $4,000.
c.
decrease the balance in Salaries Expense by $4,000
d.
be recorded by a $4,000 debit to Salaries Payable and a $4,000 credit to Salaries Expense.
38. The trial balance

a.
Is used to prepare the statement of financial position while the general ledger is used to prepare
the income statement
b.
Has as its primary purpose to prove (check) that all journal entries were made for the period.
c.
Can be used to uncover errors in journalizing and posting
d.
Is a listing of all the accounts and their balances in the order the accounts appear on the statement
of financial position
39. A credit is not the normal balance for which account listed below?

a.
Revenue account
b.
Dividends account
c.
Liability account
d.
Share Capital–Ordinary account
40. Wiser Inc. paid cash dividends of $300. The entry for this transaction will include a debit of
$300 to
a.
Owner's Salary Expense.
b.
Retained Earnings
c.
Salaries Expense
d.
Dividends., credit to cash
41. Pastorek Company purchased equipment for $1,800 cash. As a result of this event,

a.
equity decreased by $1,800
b.
total assets increased by $1,800
c.
total assets remained unchanged karena kas berkurang 1800, peralatan nambah 1800
d.
Both a and b

42. The accounting process is correctly sequenced as

a.
identification, communication, recording.
b.
communication, recording, identification.
c.
recording, communication, identification.
d.
identification, recording, communication.

43. The time period assumption states that

a.
a transaction can only affect one period of time
b.
the economic life of a business can be divided into artificial time periods
c.
adjustments to the enterprise's accounts can only be made in the time period when the business
terminates its operations
d.
estimates should not be made if a transaction affects more than one time period.

44. Accountants refer to an economic event as a

a.
transaction.
b.
change in ownership.
c.
sale.
d.
purchase.
45. If total liabilities increased by ¥30,000 and equity increased by ¥10,000 during a period of
time, then total assets must change by what amount and direction during that same period?

a.
¥50,000 increase
 b.
¥40,000 decrease
c.
¥60,000 increase
 

d.
¥40,000 increase
46. Ron's Hot Rod Shop follows the revenue recognition principle. Ron services a car on July 31.
The customer picks up the vehicle on August 1 and mails the payment to Ron on August 5.
Ron receives the check in the mail on August 6. When should Ron show that the revenue was
earned?

a.
July 31
b.
August 1
c.
August 5
d.
August 6
47. Retained earnings at the end of the period is equal to

a.
net income
b.
Retained earnings at the beginning of the period plus net income minus liabilities.
c.
assets plus liabilities
d.
Retained earnings at the beginning of the period plus net income minus dividends
48. Net income results when

a.
Revenues > Expenses
b.
Revenues = Expenses break even point
c.
Assets > Liabilities
d.
Revenues < Expenses net loss
49. After a business transaction has been analyzed and entered in the book of original entry, the
next step in the recording process is to transfer the information to
a.
the company's bank
b.
ledger accounts
c.
equity.
d.
financial statements, tahap communication
50. A trial balance will not balance if
a.
incorrect account titles are used in journalizing
b.
a wrong amount is used in journalizing
c.
a journal entry is only partially posted.
d.
a journal entry is posted twice
51. Sternberg Company purchases equipment for $1,200 and supplies for $400 from Tran Co. for
$1,600 cash. The entry for this transaction will include a

a.
debit to Equipment $1,200 and a debit to Supplies $400 for Sternberg, credit to cash $1,600
b.
credit to Cash for Tran
c.
credit to Accounts Payable for Sternberg.
d.
debit to Equipment $1,200 and a debit to Supplies Expense $400 for Tran
52. An asset—expense relationship exists with

a.
accrued expense adjusting entries (expense-liability)
b.
prepaid expense adjusting entries
c.
revenue accounts (asset- revenue)
d.
liability accounts
53. Which of the following statements related to the adjusted trial balance is incorrect?

a.
It is prepared before adjusting entries have been made. (harusnya after)
b.
Financial statements can be prepared directly from the adjusted trial balance.
c.
It proves the equality of the total debit balances and the total credit balances in the ledger
d.
It shows the balances of all accounts at the end of the accounting period.

54. At January 31, 2020, the balance in Bota Inc.’s supplies account was $250. During February,
Bota purchased supplies of $300 and used supplies of $400. At the end of February, the
balance in the supplies account should be
a.
$150 debit
b.
$350 credit
c.
$950 debit
d.
$250 debit
55. Action Real Estate received a check for $18,000 on July 1 which represents a 6 month
advance payment of rent on a building it rents to a client. Unearned Rent was credited for the
full $18,000. Financial statements will be prepared on July 31. Action Real Estate should
make the following adjusting entry on July 31:

a.
Debit Rental Revenue, $3,000; Credit Unearned Rent, $3,000
b.
Debit Cash, $18,000; Credit Rental Revenue, $18,000.
c.
Debit Unearned Rent, $18,000; Credit Rental Revenue, $18,000
d.
Debit Unearned Rent, $3,000; Credit Rental Revenue, $3,000
56. In the first month of operations, the total of the debit entries to the cash account amounted to
$900 and the total of the credit entries to the cash account amounted to $600. The cash account
has a(n)

a.
$300 credit balance
 b.
$900 debit balance
c.
$600 credit balance
d.
$300 debit balance
57. Which of the following statements is true regarding debits and credits?
a.
On the income statement, debits are used to increase account balances, whereas on the statement
of financial position, credits are used to increase account balances.
b.
The rules for debit and credit and the normal balance of Share Capital-Ordinary are the same as
for liabilities
c.
On the income statement, revenues are increased by debits whereas on the statement of financial
position retained earnings is increased by a credit.
d.
The basic equation on the statement of financial position is Assets + Liabilities = Equity.
58. Which of the following are in accordance with IFRS?

a.
Both accrual basis and cash basis accounting
b.
Accrual basis accounting
c.
Neither accrual basis nor cash basis accounting
d.
Cash basis accounting
59. In a service-type business, revenue is considered earned

a.
at the end of the month
b.
when cash is received
c.
at the end of the year
d.
when the service is performed (Accrual basis)
60. The expense recognition principle states that expenses should be matched with revenues.
Another way of stating the principle is to say that
 a.
dividends to shareholders should be matched with shareholders' investments
b.
cash payments should be matched with cash receipts
c.
efforts should be matched with accomplishments
d.
assets should be matched with liabilities
61. The equity section of a statement of financial position has two components:

a.
share capital and retained earnings.
b.
share capital and assets
c.
share capital and liablities.
d.
assets and liablities
62. Cindi’s Candies paid employee wages on and through Friday, January 26, and the next payroll
will be paid in February. There are three more working days in January (29–31). Employees
work 5 days a week and the company pays $700 a day in wages. What will be the adjusting
entry to accrue wages expense at the end of January?
a.
Wages Expense...................................................................          3,500
               Wages Payable...................................................                  3,500

b.
Wages Expense..........................................................................         700
               Wages Payable.....................................................                     700

c.
No adjusting entry is required
d.
Wages Expense.....................................................................        2,100
               Wages Payable.......................................................                 2,100

63. Betty Carson has performed $500 of accounting services for a client but has not billed the
client as of the end of the accounting period. What adjusting entry must Betty make?
a.
Debit Accounts Receivable and credit Service Revenue
b.
Debit Unearned Revenue and credit Service Revenue
c.
Debit Accounts Receivable and credit Unearned Revenue
d.
Debit Cash and credit Unearned Revenue
64. Taylor Industries purchased supplies for £1,000. They paid £500 in cash and agreed to pay the
balance in 30 days. The journal entry to record this transaction would include a debit to an
asset account for ₤1,000, a credit to a liability account for ₤500. Which of the following would
be the correct way to complete the recording of the transaction?
a.
Credit an asset account for ₤500.
b.
Credit the retained earnings account for ₤500.
c.
Debit the retained earnings account for ₤500.
d.
Credit another liability account for ₤500
65. If an adjusting entry is not made for an accrued expense,

a.
equity will be understated.
b.
liabilities will be understated
c.
net income will be understated
d.
expenses will be overstated
66. The right side of an account
a.
is the credit side
b.
shows all the balances of the accounts in the system.
c.
reflects all transactions for the accounting period.
d.
is the correct side
67. The chart of accounts is a
 a.
required step in the recording process
b.
list of accounts and their balances at a given time.
c.
listing of the accounts and the account numbers which identify their location in the ledger.
d.
device used to prove the mathematical accuracy of the ledger
68. On its December 31, 2020 statement of financial position, Adaro Corporation reported
liabilities of Rp2,566,000,000, share capital of Rp1,331,000,000 and retained earnings of
Rp2,101,000,000. Total assets as of December 31, 2020 are
a.
Rp866,000,000
b.
Rp3,432,000,000
c.
Rp2,101,000,000.
d.
Rp5,998,000,000
69. Adjusting entries are

a.
made to statement of financial position accounts only
b.
made whenever management desires to change an account balance
c.
usually required before financial statements are prepared
d.
not necessary if the accounting system is operating properly
70. A statement of financial position shows
a.
assets, liabilities, and equity
b.
revenues, expenses, and dividends. Retained ernings
c.
expenses, dividends and equity
d.
revenues, liabilities, and equity.
71. Financial statements are prepared directly from the
 a.
trial balance.
b.
ledger.
c.
general journal.
d.
adjusted trial balance.
72. Equity is decreased by all of the following except

a.
sales of shares
b.
dividends
c.
net losses.
d.
expenses.
73. Accumulated Depreciation is

a.
a contra asset account.
b.
an equity account
c.
an expense account
d.
a liability account
74. Adjustments would not be necessary if financial statements were prepared to reflect net
income from
a.
monthly operations
b.
interim operations
c.
fiscal year operations
d.
lifetime operations
75. A company increases its share capital by

a.
selling ordinary shares to its investors
b.
paying dividends to its shareholders.
c.
selling goods on account
d.
performing services for cash.