Question : 51.The collection of an account receivable recorded by a debit : 1237580

 

 

51.The collection of an account receivable is recorded by a debit to Cash and a credit to Accounts Payable. If this error is not corrected:   

A.Total liabilities are understated.

 

B.Total assets are understated.

 

C.Total liabilities are overstated.

 

D.Owners’ equity is overstated.

 

 

 

 

52.If a company purchases equipment for cash:   

A.Assets will increase and owners’ equity will also increase.

 

B.Assets will increase and owners’ equity will decrease.

 

C.Assets will increase and owners’ equity will remain unchanged.

 

D.Total assets and owners’ equity will remain unchanged.

 

 

 

 

53.Collection of an accounts receivable:   

A.Increases the total assets of a company.

 

B.Decreases the total assets of a company.

 

C.Does not change the total assets of a company.

 

D.Reduces a company’s total liabilities.

 

 

 

 

54.Which of the following accounts normally does not have a debit balance?   

A.Accounts receivable.

 

B.Cash.

 

C.Building.

 

D.Capital Stock.

 

 

 

 

55.On June 18, Baltic Arena paid $6,600 to Marvin Maintenance, Inc. for cleaning the arena following a monster truck show. Which of the following most likely occurred as a result of this transaction?   

A.The accounts receivable account was debited.

 

B.Total assets increased.

 

C.The cash account was credited.

 

D.Total liabilities increased.

 

 

 

 

The following transactions occurred during March, the first month of operations for Quality Galleries, Inc.:* Capital stock was issued in exchange for $360,000 cash.* Purchased $180,000 of equipment by making a $60,000 cash down payment and signing a note payable for the balance.* Made a $35,000 cash payment on the note payable from the purchase of equipment.* Sold a piece of equipment for cash of $18,000. The equipment was sold at cost, so there is no gain or loss on the sale.

 

56.Refer to the information above. What is the balance in the Cash account at the end of March?   

A.$283,000.

 

B.$343,000.

 

C.$318,000.

 

D.$378,000.

$360,000 – $60,000 – $35,000 + $18,000 = $283,000

 

 

 

57.Refer to the information above. What are total assets of Quality Galleries at the end of March?   

A.$283,000.

 

B.$162,000.

 

C.$445,000.

 

D.$480,000.

$283,000 + $180,000 – $18,000 = $445,000

 

 

 

58.Refer to the information above. What is the balance in the Note Payable account at the end of March?   

A.$120,000.

 

B.$85,000.

 

C.$35,000.

 

D.$155,000.

$120,000 – $35,000 = $85,000

 

 

 

59.Refer to the information above. What is the total owners’ equity at the end of March?   

A.$283,000.

 

B.$445,000.

 

C.$480,000.

 

D.$360,000.

Total owners’ equity = $360,000 (capital stock issued)

 

 

 

The following transactions occurred during May, the first month of operations for Hunter Products, Inc.:* Issued 50,000 shares of capital stock to the owners of the corporation in exchange for $600,000 cash.* Purchased a piece of land for $400,000, making a $150,000 cash down payment and signing a note payable for the balance.* Made a $60,000 cash payment on the note payable from the purchase of land.* Purchased equipment on credit from BBW, Inc. for $63,000.

 

60.Refer to the information above. What is the balance in the Cash account at the end of May?   

A.$210,000.

 

B.$390,000.

 

C.$600,000.

 

D.$810,000.

$600,000 – $150,000 – $60,000 = $390,000