Chapter 3- practice multiple choice
1. When a delivery of goods and services for $25,000 results in a cash receipt of $15,000 and the balance of $10,000 on account, the reported revenues for the time period are:
A)$15,000B)$25,000C)$10,000D)$5,000
2. A customer paid you $3,500 for tractor work to be performed when weather permits. How much of the $3,500 should be recognized as revenue if you are unable to perform any tractor work during the current accounting period?
A)$0B)$3,500C)$1,750D)$3,000
3. Your company received $45,000 in advance for services to be performed. During the accounting period, 1/3 of the services were rendered. At the beginning of the period, you paid $12,000 for insurance covering three accounting periods. If these are the only transactions during the accounting period, how much operating income should you report on the income statement?
A)$11,000B)$15,000C)$3,000D)$33,000
4. Langhurst Company sold hardware for $12,000 cash and $18,000 of hardware to credit customers. Which of the following is the correct journal entry to record this transaction?
A) Cash, debit, $12,000; Accounts Receivable, credit, $18,000; Unearned Revenues, credit, $30,000
B) Cash, debit, $12,000; Accounts Receivable, debit, $18,000, Hardware Revenues, credit, $30,000
C) Cash, debit, $12,000; Unearned Revenues, debit, $18,000; Hardware Revenues, $30,000$3,000
D) Cash, debit, $30,000; Hardware Revenues, credit, $30,000
5. On January 29, Langhurst Company sold lumber for $30,000 to a cash customer and on the same day another customer paid $14,000 for lumber to be delivered on March 5. Which ofthe following is the correct journal entry to record a summary of the transactions of January 29?
A) Cash, debit, $30,000; Accounts Receivable, debit, $14,000; Lumber Revenues, credit, $44,000
B) Cash, debit, $44,000; Lumber Revenues, credit, $44,000
C) Cash, debit, $30,000; Lumber Revenues, credit, $30,000; Unearned Revenues, credit, $14,000
D) Cash, debit, $44,000; Lumber Revenues, credit, $30,000; Unearned Revenues, credit, $14,000
6. The Langhurst Company purchased $31,000 insupplies inventory, paying $16,000 in cash and charging the rest on account to the supplier. Which of the following is the correct journal entry for recording this transaction?
A) Inventories, debit, $31,000; Cash, credit, $16,000; Accounts Payable, credit, $15,000
B) Inventories, debit, $16,000; Cash, credit, $16,000; Accounts Payable, credit, $15,000
C) Inventories, debit, $31,000; Cash, credit, $16,000; Unearned Revenues, credit, $15,000
D) Inventories, debit, $31,000; Cash, credit, $16,000; Accounts Receivable, credit, $15,000
7. At the beginning of January, Langhurst Company paid $6,000 for insurance for the next four months beginning January 1, $3,000 for advertising to be run from February 1 to March 15, and $8,000 for rent over the next two months beginning January 1 in cash. What is the correct journal entry for recording a summary of these transactions?
A) General & admin expenses17,000
Cash17,000
B)General & admin expenses 17,000
Accounts Payable17,000
C) Prepaid Expenses17,000
Cash17,000
D) Prepaid Expenses14,000
Advertising Expense3,000
Cash17,000
8. The balance of Cash at the beginning of the period was $45,000. The net cash provided by investing activities was $120,000. The net cash used by financing activities was $130,000. The net change increase in cash was $15,000. What was the cash flow from operating activities?
A) $25,000 was used by operating activities
B) $25,000 was provided from operating activities.
C) $10,000 was used by operating activities
D) $10,000 was provided from operating activities
9. If you paid $4,500 for three month's rent, beginning with the current month, you should record $4,500 of rent expense for the current period
A) True
B) False
10. When a delivery of goods and services for $15,000 results in a cash receipt of $4,000 and the balance of $11,000 on account, the reported revenues for the time period are $4,000
A) True
B) False