Acc 112 Mock

ACC112 Midterm Mock Exam
Complied by : Hasan Barakat on 18-Nov-2022
ACC112
Financial Accounting I
Midterm Mock Exam
Compiled by : Hasan Barakat
18-November-2022
Question 1
Multiple Choice Questions
1) Internal users of accounting information include:

A. Shareholders.
B. Managers.
C. Lenders.
D. Suppliers.
E. Customers.
2) The rule that requires financial statements to reflect the assumption that the business will
continue operating instead of being closed or sold, unless evidence shows that it will not
continue, is the:
A. Going-concern principle.
B. Business entity principle.
C. Objectivity principle.
D. Cost Principle.
E. Monetary unit principle.
3) Adjusting entries:
A. Affect only income statement accounts.
B. Affect only balance sheet accounts.
C. Affect both income statement and balance sheet accounts.
D. Affect only cash flow statement accounts.
E. Affect only equity accounts.
4) Prior to recording adjusting entries, the Office Supplies account had a $359 debit balance. A
physical count of the supplies showed $105 of unused supplies available. The required adjusting
entry is:
A. Debit Office Supplies $105 and credit Office Supplies Expense $105.
B. Debit Office Supplies Expense $105 and credit Office Supplies $105.
C. Debit Office Supplies Expense $254 and credit Office Supplies $254.
D. Debit Office Supplies $254 and credit Office Supplies Expense $254.
E. Debit Office Supplies $105 and credit Supplies Expense $254.
5) On April 1, 2009, a company paid the $1,350 premium on a three-year insurance policy with
benefits beginning on that date. What will be the insurance expense on the annual income
statement for the year ended December 31, 2009?
A. $1,350.
B. $450.
C. $1,012.50.
D. $337.50.
E. $37.50.
6) A company pays each of its two office employees each Friday at the rate of $100 per day for a
five-day week that begins on Monday. If the monthly accounting period ends on Tuesday and
the employees worked on both Monday and Tuesday, the month-end adjusting entry to record
the salaries earned but unpaid is:
A. Debit Unpaid Salaries $600 and credit Salaries Payable $600.
B. Debit Salaries Expense $400 and credit Salaries Payable $400.
C. Debit Salaries Expense $600 and credit Salaries Payable $600.
D. Debit Salaries Payable $400 and credit Salaries Expense $400.
E. Debit Salaries Expense $400 and credit Cash $400.
7) A company purchased a new truck at a cost of $42,000 on July 1, 2009. The truck is estimated to
have a useful life of 6 years and a salvage value of $3,000. The company uses the straight-line
method of depreciation. How much depreciation expense will be recorded for the truck for the
year ended December 31, 2009?
A. $3,250.
B. $3,500.
C. $4,000.
D. $6,500.
E. $7,000.
8) The accounting process begins with:

A. Analysis of business transactions and source documents.
B. Preparing financial statements and other reports.
C. Summarizing the recorded effect of business transactions.
D. Presentation of financial information to decision-makers.
E. Preparation of the trial balance.
9) Wisconsin Rentals purchased office supplies on credit. The general journal entry made by
Wisconsin Rentals will include a:
A. Debit to Accounts Payable.
B. Debit to Accounts Receivable.
C. Credit to Cash.
D. Credit to Accounts Payable.
E. Credit to Wisconsin Rentals, Capital.
10) Zed Bennett opened an art gallery and as a dealer completed these transactions:
1. Started the gallery, Artery, by investing $40,000 cash and equipment valued at $18,000.
2. Purchased $70 of office supplies on credit.
3. Paid $1,200 cash for the receptionist's salary.
4. Sold a painting for an artist and collected a $4,500 cash commission on the sale.
5. Completed an art appraisal and billed the client $200.
What was the balance of the cash account after these transactions were posted?
A. $12,230.
B. $12,430.
C. $43,300.
D. $43,430.
E. $61,430.
11) Dina Kader withdrew a total of $35,000 from her business during the current year. The entry
needed to close the withdrawals account is:
A. Debit Income Summary and credit Cash for $35,000.
B. Debit Dina Kader, Withdrawals and credit Cash for $35,000.
C. Debit Income Summary and credit Dina Kader, Withdrawals for $35,000.
D. Debit Dina Kader, Capital and credit Dina Kader, Withdrawals for $35,000.
E. Debit Dina Kader, Withdrawals and credit Dina Kader, Capital for $35,000.
12) The assets section of a classified balance sheet usually includes:

A. Current assets, long-term investments, plant assets, and intangible assets.
B. Current assets, long-term assets, revenues, and intangible assets.
C. Current assets, long-term investments, plant assets, and equity.
D. Current liabilities, long-term investments, plant assets, and intangible assets.
E. Current assets, liabilities, plant assets, and intangible assets.
Question 2
Prepare general journal entries on December 31 to record the following unrelated year-end
adjustments.
a. Estimated depreciation on office equipment for the year, $4,000.
b. The Prepaid Insurance account has a $3,680 debit balance before adjustment. An examination of
insurance policies shows $950 of insurance expired.
c. The Prepaid Insurance account has a $2,400 debit balance before adjustment. An examination of
insurance policies shows $600 of unexpired insurance.
d. The company has three office employees who each earn $100 per day for a five-day workweek that
ends on Friday. The employees were paid on Friday, December 26, and have worked full days on
Monday, Tuesday, and Wednesday, December 29, 30, and 31.
e. On November 1, the company received 6 months' rent in advance from a tenant whose rent is $700
per month. The $4,200 was credited to the Unearned Rent account.
f. The company collects rent monthly from its tenants. One tenant whose rent is $750 per month has
not paid his rent for December.
Transaction Account Name Debit Credit
f
Question 3
Based on the following trial balance for Sal's Beauty Shop, prepare an income statement, statement of
owner's equity, and a balance sheet.
Income statement:
Statement of Owners’ Equity:
Balance Sheet:
Question 4
In the table below, indicate with an "X" in the proper column whether the account is a (nominal)
temporary account or a (real) permanent account.
Question 5
The adjusted trial balance of Sara's Web Services follows:
(a) Prepare the closing entries for Sara's Web Services.

(b) What is the balance of Sara's capital account after the closing entries are posted?
a)
Account Name Debit Credit
b)

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ACC112 Midterm Mock Exam

Complied by : Hasan Barakat on 18-Nov-2022

Midterm Mock Exam

Compiled by : Hasan Barakat

1) Internal users of accounting information include:

8) The accounting process begins with:

12) The assets section of a classified balance sheet usually includes:

Transaction Account Name Debit Credit

Statement of Owners’ Equity:

The adjusted trial balance of Sara's Web Services follows:

(a) Prepare the closing entries for Sara's Web Services.

Account Name Debit Credit

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