MGT120H 2007 Summer Test and Test Solution.pdf

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University of Toronto Mississauga
Elisa Zuliani

MGT120 H1F Financial Accounting I Part A 10 marks1 A trial balance will not balance ifa A journal entry to record a cash sale is posted twice b The purchase of supplies on account is debited to Supplies and credited to cash c A 100 cash dividend is debited to Dividends for 1000 and credited to Cash for 100 d A 450 payment on account is debited to Accounts Payable for 45 and credited to Cash for 45 2 Which of these statements about a general journal is falsea It contains only revenue and expenses accounts b It provides a chronological record of transactions c It helps to locate errors because the debit and credit amounts for each entry can be readily compared d It discloses the complete effect of a transaction in one place 3 Kathy Krosby earned a salary of 400 for the last week of September She will be paid on October 1 The adjusting entry for Kathys employer at September 30 isa No entry is required b Salaries expense 400 Salaries Payable400 c Salaries expense400 Cash400 d Salaries Payable400 Cash400 4 Sanderson Corporation has a credit balance of 5000 in its Allowance for Doubtful accounts before any adjustments are made Based on an aging of its accounts receivable at the end of the period the company estimates that 60000 of its receivable are uncollectible The amount of bad debts expense which should be reported for this accounting period isa 5000 b 550001 c 60000 d 65000 5 Assume a company receives a bill for 10000 for advertising done during the current year If this bill is not yet recorded at the end of the year what will the adjusting journal entry includea debit to advertising expense of 10000 b credit to advertising expense of 10000 c debit to accrued liabilities of 10000 d credit to cash of 10000 6 The Alabama Surfboard Company has four employees working 8 hours per day Monday through Friday shaping and glassing surfboards at 10 per hour They receive their wages every Friday for that weeks work If the end of the accounting period occurs on a Wednesday the adjusting entry to record accrued wages would include aa Debit to Wages expense of 320 b Credit to Wages payable of 640 c Credit to Wages expense of 960 d Credit to Wages payable of 960 7 During the month of June the following transactions occurred for ABC Company June 1 Collected 5000 rent from a tenant for the month of June June 15 Sold 1000000 in goods costing 750000 June 17 Paid operating expenses of 50000 arising from expenses incurred in May June 18 Collected 18000 from customers on account June 24 Purchased 800000 inventory paid 50 in cash June 28 Incurred 75000 operating expensesJune 30 Received a utilities bill 2000 for the month of June Net income for the month of June isa 178000 b 173000 c 128000 d 1800002
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