Self-test comprehensive problems I.DOC

Self-test Comprehensive Problems I
综 合 自 测 题 I
Part One (30%)
1. Give the Chinese/English of the following terms: (5%)
business transaction ______________ 损 益 表 _____________
adjusting entries ______________ 会 计 循 环 _____________
income summary ______________ 复 式 记 账 法 ______________
source documents _______________ 工 作 底 表 ______________
post-closing trial balance _____________ 抵 销 资 产 账 户 ___________
2. Put the following sentences into Chinese: (10% )
1) To record the transaction involving purchase of equipment on credit, we shall
debit the Equipment account and credit the Accounts Payable account.
2) At the end of each fiscal period, we write off a portion of the cost of this building
as an expense.
3) The primary purpose served by closing entries is to reduce the balances of the
temporary-equity accounts to zero so that these accounts will be ready for
recording the revenue, expenses, and withdrawals of the next accounting period.
4) Since the accounting equation must balance, an increase in an asset account must
be accompanied by an increase in a liability or owner’s equity account or a
decrease in another asset account.
5) A balance sheet presents a picture of the financial standing of a business at a given
date.
3. Put the following sentences into English: (15%)
1) 我 国 《 企 业 会 计 准 则 》 规 定 , 会 计 记 账 必 须 采 用 借 贷 记 账 法 。
2) 以 相 同 金 额 借 记 现 金 账 户 和 贷 记 资 本 账 户 , 会 计 等 式 仍 然 保 持 平 衡 。
3) 工 作 底 表 为 编 制 财 务 报 表 和 记 录 调 整 分 录 及 结 账 分 录 提 供 了 必 要 的 会 计 信
息 。
4) 除 土 地 之 外 , 其 余 固 定 资 产 都 应 进 行 折 旧 。
5) 期 末 结 清 各 虚 账 户 之 后 , 会 计 应 将 各 实 账 户 的 余 额 转 入 下 一 会 计 期 间 。
Part Two (70%)
1. Multiple-choice Questions (20%)
1) The essential point of the double-entry system of accounting is that every
transaction
a. affects accounts on both sides of the balance sheet.
b. is recorded in both the journal and the ledger.
c. increase one ledger account and decrease another.
d. affects two or more ledger accounts and is recorded by an equal amount of
debits and credits.
2) The primary purpose of preparing a trial balance is to determine that
a. the ledger contains an equal number of debit and credit entries.
b. the number of ledger accounts with debit balances is equal to the number of

accounts with credit balances.
c. the debit balances of T accounts equal the credit balances of other T accounts.
d. the accounts in the ledger are arranged in financial statement order.
3) If a journal entry increases an expense account, the other part of the entry might
a. increase an asset account.
b. decrease the owner’s equity account.
c. decrease a liability account.
d. increase a liability account.
4) The term posting means
a. entering transactions in book of original entry.
b. transferring debit and credit amounts from the journal to the ledger.
c. providing the equality of debits and credits in the ledger.
d. determining the balances of individual ledger accounts.
5) Which of the following is not considered an end-of-period adjusting entry?
a. The entry to record the portion of unexpired insurance which has become
expense during the period.
b. The entry to record the depreciation of building.
c. The entry to record repayment of a bank loan and to recognize related interest
expense.
d. The entry to record the depreciation of truck.
6) The purpose of making closing entries is to
a. prepare revenue and expense accounts for the recording of the next period’s
revenue and expenses.
b. enable the accountant to prepare financial statement at the end of the
accounting period.
c. establish new balances in the balance sheet accounts.
d. reduce the number of expense accounts.
7) The term accumulated depreciation, as used in accounting, is best defined as
a. funds (or cash) set aside to replace the asset being depreciation.
b. earnings retained in the business that will be used to purchase another asset
when the present asset is depreciation.
c. the portion of a fixed asset recognized as expense since the asset was
acquired.
d. an expense of doing business.
8) Which of the following amounts appears in both the Income Statement credit
column and the Balance Sheet debit column of a work sheet?
a. Net income.
b. Net loss.
c. Accumulated depreciation.
d. Drawing.
9) The second step in the accounting cycle is to
a. prepare financial statements.
b. post to ledger accounts.
c. record transactions in the journal.
d. prepare a trial balance.
10) If, at the end of an accounting period, there is a debit balance in the Income
Summary account in the ledger, this means that
a. total assets have decreased during the period.
b. the business has suffered a net loss during the period.

c. revenue has exceeded expenses.
d. the owner has withdrawn more cash than the income for the period.
2. Problems (50%)
1) A list of ledger accounts used by a business called Baiyun Truck Rental is given
below, followed by a series of transactions. Indicate the accounts that should be
debited and credited in recording each transaction by placing the appropriate
account number in the space provided. (11%)
Ledger accounts:
1 Cash
3 Trucks
5 Notes Payable
7 Baiyun, Capital
9 Revenue
? Income Summary
2 Accounts Receivable
4 Accumulated Depreciation: Trucks
6 Accounts Payable
8 Baiyun, Drawing
10 All Expense Accounts
Transactions
Accounts
Debited
Accounts
Credited
Example: Earned truck rental fees, receiving part in cash with 1, 2 9
the balance to be collected in 30 days.
a. Owner withdraws cash from the business.
b. Trucks are purchased by making a 30% cash down payment
and issuing a note payable for the balance of the purchase
price.
c. Utility bill is received; payment will be made in 10 days.
d. Owner invested cash in the business.
e. Depreciation on trucks is recorded.
f. An entry is made to record truck rentals earned but not yet
received.
g. Entry is made to close revenue account at the end of fiscal
period.
h. Adjusting entry is made to record liability to Daily News for
advertising done during this period. Payment is due next
month.
i. Income Summary account is closed at the end of a profitable
period.
j. Entry is made to close owner’s drawing account.
k. Entry is made to close expense accounts at the end of the
period.
2) The trial balance of Yuntai Services as of December 31, 200x, the end of the
current fiscal year, is shown below. Data for the adjustments are as follows:
a. The amount in Prepaid Insurance represents twenty-four months premium
paid on January 2 of the current year. Twelve months’ insurance has now
expired.
b. Depreciation of furniture and fixtures for the year is 1 000 yuan.

c. Depreciation of office equipment for the year is 3 000 yuan.
Yuntai Services
Trial Balance
December 31, 200x
DEBIT
CREDIT
Cash 5 392
Accounts Receivable 2 841
Prepaid Insurance 626
Furniture and Fixtures 12 000
Office Equipment 25 600
Accounts Payable 419
Yun, Capital 13 738
Yun, Drawing 1 640
Income from Services 48 548
Rent Expense 12 000
Utilities Expense 1 271
Advertising Expense 960
Miscellaneous Expense 375
62 705 62 705
Instructions: (39%)
a. Complete the work sheet.
b. Prepare an income statement.
c. Prepare a statement of owner’s equity.
d. Prepare a balance sheet.
e. Journalizing the adjusting entries and the closing entries.