2024 – Question 1 Post Company uses 10 000 in cash to pay 10 000 on accounts payable This

Question 1   

Post Company uses $10,000 in cash to pay $10,000 on accounts payable. This would result in: 

 

$10,000 credit to cash and a $10,000 credit to accounts payable. 

$10,000 debit to cash and a $10,000 debit to accounts payable. 

$10,000 credit to cash and a $10,000 debit to accounts payable. 

$10,000 debit to cash and a $10,000 credit to accounts payable. 

 

Question 2   

A company was recently formed with $ 100,000 cash contributed to the company by stock-holders. The company then borrowed $ 50,000 from a bank and bought a $ 20,000 vehicle for cash. They also purchased $10,000 of equipment by paying $ 2,000 in cash and issuing a note for the remainder. What is the amount of total assets to be reported on the balance sheet? 

 

$ 158,000  

$ 160,000 

$ 162,000 

$ 100,000 

 

Question 3   

In regard to the balance sheet, which of the following statements is true? 

 

Income and expenses are reported on the balance sheet. 

The balance sheet reflects both a point in time and a period of time. 

The balance sheet reflects a period of time.  

The balance sheet reflects a point in time.

  

Question 4   

Which of the following are current assets? 

 

Cash, accounts receivable, inventory, accounts payable 

Cash, accounts receivable, inventory, supplies 

Cash, equipment, inventory, vehicle 

Cash, accounts receivable, inventory, building 

 

Question 5   

Which of the following true In regard to current liabilities?  

 

Current liabilities are liabilities that you recently paid. 

Notes payable is normally a current liability. 

Equipment, vehicles, buildings and land are all current liabilities.  

Current liabilities are debts and obligations that must be paid within 12 months or less. 

 

Question 6   

A company purchases $23,000 of supplies in the current month and promises to pay for them next month. How would the company record a liability for the supplies? 

 

This liability is not a recognized liability until the payment is due. 

$23,000 would be posted as a credit to accounts payable. 

$23,000 would be posted as a credit to supplies expense. 

$23,000 would be posted as a debit to accounts payable. 

 

Question 7   

Alpha Company borrows $200,000 from its bank and buys equipment. How does this transaction affect the accounting equation? 

 

Assets and Liabilities both increase by $200,000. 

Assets and Equity both decrease by $200,000. 

Assets, liabilities and equity are unchanged. 

Equity increase by $200,000 and liabilities decrease by $200,000. 

 

Question 8   

Bravo Company purchases Land for $200,000 paying cash of $$80,000 and signing a note for the balance. The accounting entry would be: 

 

Debit Land $120,000; Credit Notes Payable $120,000. 

Debit Land $200,000; Credit Cash $200,000. 

Debit Land $200,000; Credit Cash $80,000; Credit Notes Payable $120,000. 

Debit Land $80,000; Credit Cash $80,000.