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The following account balances were listed on the trial balance of Edgar Company at the end of the period: The following account balances were listed on the trial balance of Edgar Company at the end of the period: The company's trial balance is not in balance and the company's accountant has determined that the error is in the cash account.What is the correct balance in the cash account? A) $57,900. B) $31,500. C) $2,100. D) $62,100. The company's trial balance is not in balance and the company's accountant has determined that the error is in the cash account.What is the correct balance in the cash account?


A) $57,900.
B) $31,500.
C) $2,100.
D) $62,100.

E) A) and B)
F) None of the above

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Which of the following would not be classified as a current asset?


A) Cash
B) Accounts Payable
C) Supplies
D) Inventory

E) All of the above
F) B) and D)

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During its first year of operations, a company entered into the following transactions: -Borrowed $5,000 from the bank by signing a promissory note. -Issued stock to owners for $10,000. -Purchased $1,000 of supplies on account. -Paid $400 to suppliers as payment on account for the supplies purchased. -Use the information above to answer the following question.What is the amount of total liabilities at the end of the year?


A) $6,000.
B) $15,600.
C) $16,000.
D) $5,600.

E) B) and D)
F) B) and C)

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How will a company's current ratio be affected when the company receives $20,000 from owners and issues common stock to them?


A) The current ratio will increase because current assets increase.
B) The current ratio will increase because current liabilities decrease.
C) There will be no change in the company's current ratio.
D) The current ratio will decrease because current liabilities increase.

E) C) and D)
F) B) and C)

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All of the following would be classified as current on a classified balance sheet except:


A) Common Stock
B) Cash
C) Accounts Payable
D) Supplies

E) B) and C)
F) A) and D)

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A company borrows $2 million from its bank.It then uses this money to buy equipment.How do these two transactions affect the company's accounting equation?


A) Assets and liabilities both increase by $2 million.
B) Assets increase by $2 million and liabilities decrease by $2 million.
C) Assets increase by $4 million, liabilities increase by $2 million, and stockholders' equity increases by $2 million.
D) Assets remain unchanged and liabilities increase by $2 million.

E) A) and C)
F) None of the above

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Each account is assigned a number; this listing of all accounts is called a:


A) trial balance.
B) journal.
C) ledger.
D) chart of accounts.

E) B) and D)
F) None of the above

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The Sweet Smell of Success Fragrance Company borrowed $60,000 from the bank to be paid back in five years and used all of the money to purchase land for a new store.Sweet Smell's balance sheet would show this as:


A) $60,000 under Land and $60,000 under Notes Payable (long-term) .
B) $60,000 under Depreciation Expense and $60,000 under Notes Payable (long-term) .
C) $60,000 under Land and $60,000 under Notes Receivable (long-term) .
D) $60,000 under Other Assets and $60,000 under Other Liabilities.

E) C) and D)
F) B) and D)

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-Use the information above to answer the following question.What is the ending balance of the Cash account? A) $219,300 B) $113,300 C) $28,500 D) $134,500 -Use the information above to answer the following question.What is the ending balance of the Cash account?


A) $219,300
B) $113,300
C) $28,500
D) $134,500

E) None of the above
F) A) and B)

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The Xtech Co.has total debits in its cash T-account of $62,000 and total credits of $48,000.The balance in the cash T-account is a:


A) debit of $62,000.
B) debit of $14,000.
C) credit of $48,000.
D) credit of $14,000.

E) All of the above
F) A) and B)

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A business can obtain financing by issuing stock or borrowing from third parties,such as banks.What are the balance sheet effects of issuing stock to obtain cash?


A) No effect on assets; Decrease liabilities; Increase stockholders' equity
B) Increase assets; Increase liabilities; Increase stockholders' equity
C) Increase assets; No effect on liabilities; Increase stockholders' equity
D) Increase assets; Increase liabilities; No effect on stockholders' equity

E) B) and C)
F) C) and D)

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The Smith Corp.began business this year and entered into the following transactions during the year.The company issued common stock in exchange for cash of $20,000 from stockholders,borrowed $10,000 from a bank,bought $3,000 of inventory on account,and purchased $8,000 of equipment by paying $3,000 in cash and issuing a note for the remainder.What is the amount of total assets to be reported on the balance sheet at the end of the year?


A) $26,000
B) $30,000
C) $32,000
D) $38,000

E) A) and B)
F) B) and D)

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Which of the following is an accounting transaction?


A) A manager hires an employee
B) A manager orders supplies
C) A manager signs a promissory note and receives cash
D) A manager agrees to deliver their product in three weeks

E) None of the above
F) C) and D)

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-Use the information above to answer the following question.In the T-account above: A) (a) and (b) are credits. B) (c) through (g) are debits. C) if the sum of (a) and (b) is less than the sum of (c) through (g) , the Cash account balance will increase. D) (a) and (b) are increases. -Use the information above to answer the following question.In the T-account above:


A) (a) and (b) are credits.
B) (c) through (g) are debits.
C) if the sum of (a) and (b) is less than the sum of (c) through (g) , the Cash account balance will increase.
D) (a) and (b) are increases.

E) A) and D)
F) B) and C)

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Which of the following statements about the concepts underlying the balance sheet is correct?


A) A company bought land for $5 million dollars 10 years ago. The land is now worth $15 million. The company should increase the book value of this asset on its balance sheet to reflect its current value.
B) All events affecting the current value of a company are reported on the balance sheet.
C) According to the cost principle, assets are valued at their replacement cost.
D) If an asset's value increases, the increase in value is generally not recorded under GAAP.

E) A) and C)
F) A) and D)

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The company's total assets are $36,000.The following is a listing of the company's accounts and account balances as of December 31,Year 3.This company doesn't have any other accounts. The company's total assets are $36,000.The following is a listing of the company's accounts and account balances as of December 31,Year 3.This company doesn't have any other accounts. Required: Part a.Determine the balance of the Cash account. Part b.Determine the balance of the Retained Earnings account. Required: Part a.Determine the balance of the Cash account. Part b.Determine the balance of the Retained Earnings account.

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Part a
Total Assets = Accounts Receivabl...

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Park & Company was recently formed with a $5,000 investment in the company by stockholders in exchange for common stock.The company then borrowed $2,000 from a local bank,purchased $1,000 of supplies on account,and also purchased $5,000 of equipment by paying $2,000 in cash and signing a promissory note for the balance.Based on these transactions,the company's total assets are:


A) $7,000.
B) $9,000.
C) $10,000.
D) $11,000.

E) C) and D)
F) A) and D)

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Which account would be increased with a debit?


A) Retained Earnings
B) Accounts Receivable
C) Common Stock
D) Notes Payable

E) C) and D)
F) A) and B)

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Current liabilities are expected to be:


A) converted to cash within one year.
B) settled within one year.
C) used in the business within one year.
D) acquired within one year.

E) A) and C)
F) A) and B)

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When a company purchases an asset but only pays for a portion of it and owes the remainder,which of the following is true?


A) The asset is debited for the amount paid plus the amount owed.
B) The asset is debited for the amount paid. The amount owed will be debited to the asset once paid.
C) The asset is credited for the amount paid plus the amount owed.
D) The asset is credited for the amount paid. The amount owed will be debited to the asset once paid.

E) B) and D)
F) C) and D)

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