Question by Help me!: MULTIPLE CHOICE? WHICH LETTER IS THE BEST ANSWER? HELP!?
MULTIPLE CHOICE Each answer is worth 2 points
1. Which of the following is true in regards to a Limited Liability Company?
a. It is organized as a corporation.
b. It can elect to be taxed as a partnership.
c. Provides tax and liability advantages to the owners.
d. All are correct.
2. The initials GAAP stand for
a. General Accounting Procedures
b. Generally Accepted Plans
c. Generally Accepted Accounting Principles
d. Generally Accepted Accounting Practices
3. Smith Company purchased $ 105,000 of computer equipment from Brown Company. Smith Company paid for the equipment using cash that had been obtained from the initial investment by Connie Smith. The transaction involving the computer equipment should be recorded on the accounting records of which of the following entities?
a. Smith Company and Connie Smith’s personal records
b. Brown Company and Connie Smith’s personal records
c. Brown Company
d. Smith Company and Brown Company
4. Equipment with an estimated market value of $ 45,000 is offered for sale at $ 65,000. The equipment is acquired for $ 10,000 in cash and a note payable of $ 40,000 due in 30 days. The amount used in the buyer’s accounting records to record this acquisition is
a. $ 50,000
b. $ 65,000
c. $ 10,000
d. $ 45,000
5. The debit side of an account
a. depends on whether the account is an asset, liability or stockholders’ equity
b. can be either side of the account depending on how the accountant set up the system
c. is the right side of the account
d. is the left side of the account
6. A debit may signify a(n)
a. decrease in asset accounts
b. decrease in liability accounts
c. increase in the capital stock account
d. decrease in the dividend account
7. Which of the following applications of the rules of debit and credit is true?
a. decrease Prepaid Insurance with a credit and the normal balance is a credit
b. increase Accounts Payable with a credit and the normal balance is a debit
c. increase Supplies Expense with a debit and the normal balance is a debit
d. decrease Cash with a debit and the normal balance is a credit
8. A trial balance is prepared to
a. prove that there were no errors made in recording transactions into the journal
b. prove that no errors were made in posting to the ledger
c. prove that each account balance is correct
d. summarize the account balances to help prepare financial statements
9. An overpayment error was discovered in computing and paying the wages of a Bartson Repair Shop employee. When Bartson receives cash from the employee for the amount of the overpayment, which of the following entries will Bartson make?
a. Cash, debit; Wages Expense, credit
b. Wages Payable, debit; Wages Expense, credit
c. Wages Expense, debit, Cash, credit
d. Cash, debit; Wages Payable, credit
10. Supplies purchased on account were incorrectly recorded as Office Equipment. The correcting entry would be
a. Supplies, debit; Office Equipment, credit.
b. Accounts Receivable, debit; Supplies, credit.
c. Office Equipment, debit; Supplies Expense, credit.
d. Supplies, debit; Accounts Payable, credit.
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Best answer:
Answer by Financial Guru
These are such easy questions. Look them up. 1) D and 2) C
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