1. ACG 2021 Exam 1 TA Review

2. Chapter 1

3. Financial Statements

4. Accounting Equation: Debit & Credit Rules  __ 2. When a company performs a service on account for a customer, which of the following would occur? a.Expenses would decrease b.Assets would decrease c.Net income would decrease d.Stockholders’ equity would increase

5. Chapter 2

6. Purchase land for $3,000 cash

7. Receive $750 for consulting services rendered

8. Pay monthly rent of $1,200

9. Purchase $300 of supplies on account

10. Perform services worth $650 on account; payment is due in 2 weeks

11. Pay dividends of $1,000 to shareholders

12. Chapter 3

13. A company pays $6,000 to cover the subsequent 12 months’ rent on 7/1/13 7/1/13 Prepare Adjusting Entry 12/31/13 1.Paying rent in advance for one full year would include a a.Debit to cash and a credit to accounts receivable b.Debit to supplies and a credit to accounts receivable c.Debit to prepaid rent and a credit to cash d.Debit to rent expense and a credit to cash __

14. The company used $900 of supplies throughout the year. Record the adjusting entry 5.What will be the result if no adjusting entry is made at the end of the accounting period to record the actual use of supplies? a.Liabilities would be overstated b.Assets would be overstated c.Assets would be understated d.Liabilities would be understated __

15. A company performs services worth $1,100 on 9/1/14. The customer pays in full on 9/31/14 9/1/14 9/31/14

16. Unpaid salaries at the end of the year are $3,200

17. On 11/1/12, a company receives a loan from the bank for $60,000. The loan (principal and all of the interest) is due in 6 months and carries an interest rate of 8% 11/1/12 12/31/12 Adjusting Entry 7. The financial statements for ABC Company are prepared on 12/31/12 based on an accrual accounting basis. No interest has been paid for the monies borrowed under the 6 month $60,000 promissory note signed on 11/1/12. The interest and principal are due at maturity with an annual interest rate of 8%. How should ABC account for the interest at 12/31/12? a.Debit interest receivable and credit interest payable in the amount of $2,400 for each account. b.Debit interest expense and credit interest payable in the amount of $800 for each account. c.Do not record at this time. Record the interest when the bank sends the bill. d.Debit interest payable and credit interest expense in the amount of $400 for each account. __

18. A company receives $12,000 in advance on 6/1/13 from a customer for services to be performed equally throughout the next year 6/1/13 12/31/13 Adjusting Entry 6. On 6/1/13, ABC Company receives $12,000 in advance for an annual contract to provide pest control services in the future over the next 12 months. Revenue will be earned equally each month. As of 12/31/13 ABC Company: a.Would have an $5,000 liability b.Would have a $7,000 asset c.Would have $1,000 expense d.Would have $1,000 revenue __

19. A company purchases a building for $220,000 on January 1, 2013. The building has an expected useful life of 10 years and will be depreciated with the straight- line method 1/1/13 12/31/13 Adjusting Entry 8. Building worth $220,000 with a useful life of 10 years is purchased on 1/1/13. Using straight-line depreciation, what journal entry needs to be recorded at year-end 12/31/13 if no adjusting entries have been recorded throughout the year? a.Debit depreciation expense and credit accumulated depreciation in the amount of $22,000 for each account. b.Debit depreciation expense and credit accumulated depreciation in the amount of $1,833 for each account. c.Credit depreciation expense and debit accumulated depreciation in the amount of $1,833 for each account. d.Credit depreciation expense and debit accumulated depreciation in the amount of $22,000 for each account. __

20. Prepare closing entries given the following end of year account balances: Supplies Expense - $1,200 Depreciation Expense - $3,100 Salaries Expense - $16,400 Service Revenue - $34,700 Interest Revenue - $1,200 Dividends - $6,200