ACC 557 Midterm Exam Part 1 - Assignment

ACC 557 Midterm Exam Part 1
Question 1
Equipment is classified in the balance sheet as
a current asset.
property, plant, and equipment.
an intangible asset.
a long-term investment.
Question 2
Correcting entries are made
at the beginning of an accounting period.
at the end of an accounting period.
whenever an error is discovered.
after closing entries.

Question 3
The first required step in the accounting cycle is
reversing entries.
journalizing transactions in the book of original entry.
analyzing transactions.
posting transactions.
Question 4
The net income (or loss) for the period
is found by computing the difference between the income statement credit
column and the balance sheet credit column on the worksheet.
cannot be found on the worksheet.
is found by computing the difference between the income statement columns
of the worksheet.
is found by computing the difference between the trial balance totals and the
adjusted trial balance totals.
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Question 5
The purpose of the post-closing trial balance is to
prove that no mistakes were made.
prove the equality of the balance sheet account balances that are carried
forward into the next accounting period.
prove the equality of the income statement account balances that are carried
forward into the next accounting period.
list all the balance sheet accounts in alphabetical order for easy reference.

Question 6
All of the following are property, plant, and equipment except
supplies.
machinery.
land.
buildings.
Question 7
The operating cycle of a company is the average time that is required to go
from cash to
sales in producing revenues.
cash in producing revenues.
inventory in producing revenues.
accounts receivable in producing revenues.
Question 8
An accounting time period that is one year in length, but does not begin on
January 1, is referred to as
a fiscal year.
an interim period.
the time period assumption.
a reporting period.
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Question 9

Mary Chain Investments purchased an 18-month insurance policy on May 31,
2015 for $3,600. The December 31, 2015 balance sheet would report Prepaid
Insurance of
$0 because Prepaid Insurance is reported on the Income Statement.
$1,400.
$2,200.
$3,600.
Question 10
A company usually determines the amount of supplies used during a period by
adding the supplies on hand to the balance of the Supplies account.
summing the amount of supplies purchased during the period.
taking the difference between the supplies purchased and the supplies paid
for during the period.
taking the difference between the balance of the Supplies account and the
cost of supplies on hand.
Question 11
Depreciation expense for a period is the
original cost of an asset – accumulated depreciation.
book value of the asset ÷ useful life.
portion of an asset’s cost that expired during the period.
market value of the asset ÷ useful life.
Question 12
If an adjusting entry is not made for an accrued revenue,
assets will be overstated.
expenses will be understated.

stockholders’ equity will be understated.
revenues will be overstated.
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Question 13
NWA Air Charter signed a four-month note payable in the amount of $20,000
on September 1. The note requires interest at an annual rate of 9%. The
amount of interest to be accrued at the end of September is
$150.
$200.
$600.
$1,800.
Question 14
At January 31, 2015, the balance in Aislers Inc.’s supplies account was $750.
During February, Aislers purchased supplies of $900 and used supplies of
$1,125. At the end of February, the balance in the supplies account should be
$525 debit.
$975 debit.
$525 credit.
$775 debit.
Question 15
Which of the following statements is false?
Revenues increase stockholders’ equity.
Revenues have normal credit balances.
Revenues are a positive factor in the computation of net income.
Revenues are increased by debits.

Question 16
The first step in posting involves
entering in the appropriate ledger account the date, journal page, and debit
amount shown in the journal.
writing in the journal the account number to which the debit amount was
posted.
writing in the journal the account number to which the credit amount was
posted.
entering in the appropriate ledger account the date, journal page, and credit
amount shown in the journal.
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Question 17
Transactions in a journal are recorded in
account number order.
dollar amount order.
alphabetical order.
chronological order.
Question 18
An accountant has debited an asset account for $1,300 and credited a liability
account for $500. Which of the following would be an incorrect way to
complete the recording of the transaction?
Credit an asset account for $800.
Credit another liability account for $800.

Credit a Stockholders' account for $800.
Debit a Stockholders' account for $800.
Question 19
A T-account is
a way of depicting the basic form of an account.
what the computer uses to organize bytes of information.
a special account used instead of a trial balance.
used for accounts that have both a debit and credit balance.
Question 20
Collection of a $1,000 Accounts Receivable
increases an asset $1,000; decreases an asset $1,000.
increases an asset $1,000; decreases a liability $1,000.
decreases a liability $1,000; increases stockholders' equity $1,000.
decreases an asset $1,000; decreases a liability $1,000.
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Question 21
Mofro’s Computer Repair Shop started the year with total assets of $300,000
and total liabilities of $200,000. During the year, the business recorded
$500,000 in computer repair revenues, $300,000 in expenses, and Mofro paid
dividends of $50,000. Stockholders' equity at the end of the year was
$200,000.
$100,000.

$250,000.
$300,000.
Question 22
The proprietorship form of business organization
must have at least three owners in most states.
represents the largest number of businesses in the United States.
combines the records of the business with the personal records of the owner.
is characterized by a legal distinction between the business as an economic
unit and the owner.
Question 23
The basic accounting equation may be expressed as
Assets = Equities.
Assets – Liabilities = Stockholders' Equity.
Assets = Liabilities + Stockholders' Equity.
All of these answers are correct.
Question 24
The Duce Company has five plants nationwide that cost a total of $100 million.
The current fair value of the plants is $500 million. The plants will be
recorded and reported as assets at
$100 million.
$400 million.
$500 million.
$600 million.

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Question 25
The accounting equation for Quattro Enterprises is as follows:
Assets Liabilities Stockholders' Equity
$120,000 = $60,000 + $60,000
If Quattro purchases office equipment on account for $25,000, the accounting
equation will change to
Assets Liabilties Stockholders' Equity
$120,000 = $60,000 + $60,000
$145,000 = $60,000 + $85,000
$145,000 = $72,500 + $72,500
$145,000 = $85,000 + $60,000
About Author:
This article covers the topic for the Strayed University ACC 557 Midterm Exam
Part 1 . The author is working in the field of education from last 5 years. This article
covers the questions & answers of ACC 557 . Other topics in the class are as follows:
ACC 557 Week 1 DQ 1
ACC 557 Week 1 Homework
ACC 557 Week 1 Complete
ACC 557 Midterm Exam Part 1
ACC 557 Midterm Exam Part 2
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