Accounting mcq’s !! | Accounting homework help

31.A company raised $50,000 in cash by taking a one-year loan of $10,000 and a 5-year loan of $40,000. Which of the following is the correct journal entry to record this transaction?


Debit short-term debt $40,000; debit retained earnings $10,000; credit cash $50,000


Debit short-term debt $50,000; credit cash $50,000


Debit cash $50,000; credit long-term debt $50,000


Debit cash $50,000; credit short-term debt $10,000; credit long-term debt $40,000



32.Which one of the following statements describes the rules about posting transactions into T-accounts in the ledger?


For assets, debits are entered on the left; for liabilities, credits are entered on the left


For assets, credits are entered on the left; for liabilities, debits are entered on the left


Debits on the left; credits on the right


Credits on the left; debits on the right



33.Baxtra, Inc. pays $20,000 in cash as interest to its lenders during 2005. According to U.S. GAAP, in which section of the statement of cash flows would this payment be included?


The operating section


The financing section


The investing section


Depends on whether cash flow statement is direct or indirect method.



34.Taylor Company had a salaries payable balance of $18,000 on December 31, 2004. During 2005, it paid $50,000 in cash as salaries, and recorded a salary expense of $50,000. Its December 31, 2005 salaries payable balance is:








Cannot be determined from the information provided



35.On April 30, 2005, Zono Electronics, Inc. made a payment of $3,500 to Imperial Distributors, a supplier. Choose the statement that best describes the recording of this financial transaction by Imperial Distributors.


Debit cash $3,500; credit accounts payable $3,500


Debit accounts receivable $3,500; credit cash $3,500


Debit accounts payable $3,500; credit cash $3,500


Debit cash $3,500; credit accounts receivable $3,500



36.Sardi Company estimates its 2005 tax expense to be $80,000. It makes a cash payment of $20,000 to the tax authorities on December 31, 2005. How should this transaction be recorded by Sardi?


Debit tax expense $80,000; credit cash $60,000; credit taxes payable $20,000


Debit tax expense $80,000; credit cash $20,000; credit taxes payable $60,000


Debit tax expense $80,000; credit cash $20,000


Debit tax expense $80,000; credit cash $20,000; credit accounts payable $60,000


37.On June 1, 2005, Planet Music has accounts payable of $45,000. During the month, debits of $3,000 and credits of $11,000 were made to the account. At the end of June 2005, what was the accounts payable balance?


A credit balance of $53,000


A debit balance of $42,000


A credit balance of $56,000


A debit balance of $53,000



38.Barnaby & Sons receives a large shipment of goods from its supplier. It pays $58,000 at the time of delivery and promises to pay the remaining $42,000 within the next two months. What is appropriate journal entry for this transaction?


Debit cash $42,000; debit inventory $16,000; credit accounts payable $58,000;


Debit inventory $100,000; credit cash $58,000; credit accounts payable $42,000


Debit accounts payable $58,000; credit cash $42,000; credit inventory $16,000


Debit accounts payable $58,000; debit cash $42,000; credit inventory $100,000



39.Annie’s Fitness sells a set of free weights to a customer for $1,000. The customer pays $600 in cash and puts the rest on her store credit account. Which one of the following statements describes the most appropriate accounting for the transaction?


Debit cash $600; debit accounts receivable $400; credit cost of good sold $1000


Debit cash $600; debit accounts receivable $400; credit revenues $1,000


Debit revenues $1,000; credit cash $600; credit accounts receivable $400


Debit cash $600; debit accounts receivable $400; credit inventory $1,000 

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