Sample Mid Term
ACTG381
Sample Midterm
Midterm 1 Name:_____________________________________________
Part 1: Multiple Choice (25 questions @ 3 pts ea. Suggested time 50 minutes)
Use a scantron to fill in the letter corresponding to the “best” answer.
1. Which of the following properly describes a deferral? a. Cash is received after revenue is earned. b. Cash is received before revenue is earned. c. Cash is paid after expense is incurred. d. Cash is paid in the same time period that an expense is incurred.
2. The failure to properly record an adjusting entry to accrue a revenue item will result in an: a. understatement of revenues and an understatement of liabilities. b. overstatement of revenues and an overstatement of liabilities. c. overstatement of revenues and an overstatement of assets. d. understatement of revenues and an understatement of assets.
3. Unearned revenue on the books of one company is likely to be a. a prepaid expense on the books of the company that made the advance payment. b. an unearned revenue on the books of the company that made the advance payment. c. an accrued expense on the books of the company that made the advance payment. d. an accrued revenue on the books of the company that made the advance payment.
4. Maso Company recorded journal entries for the issuance of common stock for $80,000, the payment of $26,000 on accounts payable, and the increase of salaries expense of $42,000. What net effect do these entries have on owners’ equity? a. Increase of $80,000. b. Increase of $54,000. c. Increase of $38,000. d. Increase of $12,000.
5. Characteristics of generally accepted accounting principles include all of the following except a. authoritative accounting the rule-making body established a principle of reporting. b. standards are considered useful by the profession. c. each
Sample Midterm
Midterm 1 Name:_____________________________________________
Part 1: Multiple Choice (25 questions @ 3 pts ea. Suggested time 50 minutes)
Use a scantron to fill in the letter corresponding to the “best” answer.
1. Which of the following properly describes a deferral? a. Cash is received after revenue is earned. b. Cash is received before revenue is earned. c. Cash is paid after expense is incurred. d. Cash is paid in the same time period that an expense is incurred.
2. The failure to properly record an adjusting entry to accrue a revenue item will result in an: a. understatement of revenues and an understatement of liabilities. b. overstatement of revenues and an overstatement of liabilities. c. overstatement of revenues and an overstatement of assets. d. understatement of revenues and an understatement of assets.
3. Unearned revenue on the books of one company is likely to be a. a prepaid expense on the books of the company that made the advance payment. b. an unearned revenue on the books of the company that made the advance payment. c. an accrued expense on the books of the company that made the advance payment. d. an accrued revenue on the books of the company that made the advance payment.
4. Maso Company recorded journal entries for the issuance of common stock for $80,000, the payment of $26,000 on accounts payable, and the increase of salaries expense of $42,000. What net effect do these entries have on owners’ equity? a. Increase of $80,000. b. Increase of $54,000. c. Increase of $38,000. d. Increase of $12,000.
5. Characteristics of generally accepted accounting principles include all of the following except a. authoritative accounting the rule-making body established a principle of reporting. b. standards are considered useful by the profession. c. each