1. The fundamental accounting equation is a reflection of the :
-Money Measurement concept
-Dual aspect concept
-Historical cost concept
-conservatism concept

2. The historical cost concept reflects the fact that financial acct practice favors

3. T systems began the month of June 04 with prepaid expenses balance of 240K. During the month, debits of 110K and credits of 80K were made to prepaid expenses amt. What was the June 2004 ending balance of prepaid expenses
-Credit balance of 210K
-Credit balance of 270K
-Debit balance of 210K
-Debit balance of 270K

4. P and M each had a dollar gross margin of 20K during Sept 04. P’s Sept sales were twice that of M’s. If P’s gross margin as a % of Sales for Sept was 10%, M’s gross margin as a % of Sales for the same period was:
-10%
-5%
-20%
-Cannot be calculated

5. J Foods pays off a long term debt in full. Which one of the following statements describes the effect of the sale on J Foods
-current ratio decreases ;total debt to equity ratio increases
-current ratio descreases ;total debt to equity ratio decreases
-current ratio increases ;total debt to equity ratio decreases
-current ratio increases ;total debt to equity ratio increases

6. On March 31,05 Cars Inc owes P Devices one of its suppliers 25K for previous purchases. During April 05 P Sells Cars devices with a sales price of 10K and a cost to P of 8K. During April, Cars pays P 12K against the amount owed to P. If P has no other sales and records no other collections from customers during the month of April the operating section of P’s indirect method statement of Cash flows for April will show the following de-accrual adjustments to Net Income.
-subtract accts receivable and inventory
-add change in accts recv and inventory
-add accts recv;subtract inventory
-subtract accts recv;add change in inventory

7. Planet Music buys all its inventory on credit. During 2005, its inventory account increased by 10K. Which of the following statements must be true for Planet Music during 2005
-it made payments of less than 10K to it suppliers
-it made cash payment of 10K to its suppliers
-it made more cash payments to it suppliers than it recorded as GOCS
-it paid less cash payments to its suppliers than it recorded as GOCS

8. How much total depreciation and amortization expense did Patnode record during 2005(need pic)
-10K
-6K
-3K
-5K

9. Which one of the following items will not appear in the operating section of Patnode’s 2005 indirect method cash flow statement (need pic)
-add:decrease inventory 6K
-add:increase in tax payable 2K
-add:decrease in accts payable 1K
-deduct:increase in accts receivable 3K

10. S Robbins is the sole owner of a hair salon. He often takes small amounts of “lunch money” from the cash register, figuring that “it is my business anyway”. His accountant, insists that Robbins makes a note of the cash he takes and at the end of the each accounting period he debits owners equity and credits the cash account for the total amount that robbins has taken during the period. In recording the cash withdrawals even though Robbins is the sole proprietor the accountant is correctly applying the:
-conservatism
-matching
-materiality
-entity


11. Which one of the following statements is “not true” about statements of cash flows prepared according to the US GAAP.
-the operating section of the indirect method starts with the net income of the period
-interest payments are included in the operating section of the direct method
-in the indirect method;the period’s depreciation is added to the net income because it is a source of cash
-investing section of the direct method for a period is identical to the investing section of the indirect method in the same period

12. S Company estimates that is 2005 tax expense to be 80K. It makes cash payment of 20K to the tax authority on Dec 31,2005. How should this transaction be recorded?
-debit tax expense 80K;credit cash 20K;credit tax payable 60K
- debit tax expense 80K;credit cash 60K;credit tax payable 20K
- debit tax expense 80K;credit cash 20K;credit accts payable 60K
- debit tax expense 80K;credit cash 20K;


13. On June 1,2005 P Music has accounts payable of 45K. During the month, debits of 3K and credits of 11K were made to the account. At the end of June 2005, what was the accounts payable balance
-debit balance of 53K
-debit balance of 42K
-credit balance of 53K
- credit balance of 56 K

14. A Fitness sells a set of free weights to a customer for 1K. The customer pays 6K in cash and the rest on her store credit card account. Which one of the following statements describes the “most” appropriate accounting for the transaction.
- Debit cash 600;debit accts rec 400;COGS 1000
- Debit cash 600;debit accts rec 400;credit inventory 1000
- Debit cash 600;debit accts rec 400;credit revenue 1000
- credit cash 600;credit accts rec 400;COGS 1000

I'd like to clarify. Are you saying that all of these are supposed to be incorrect? Because they aren't. Can you confirm that?

And you didn't ask -- I assume you want to know why the incorrect ones are incorrect?

I agree with you, except that the first answer about balance sheet equation is correct. I would add that the OP also wants the reasons for the correct or incorrect answers.

There's more than that correct. I did say they weren't all incorrect. That's why I wanted clarification to begin with, cause if someone/thing is saying they're all incorrect, something's screwy.

I want to know the correct ones since mine were "incorrect". Appreciate your feedback

I was able to figure out the correct ones. Thanks

Well done dvt1970. You deserve accolades for doing your own work by yourself. There are not many who can achieve this.

However, it would benefit others who may be interested to learn the correct answers. So, if you can just mentions the option numbers for each answer, it will be helpful.

I personally would prefer the correct answers not be listed. Answers without explanation are worthless. And that starts turning us into one of those sites where you can just go and get solutions and not do any work.

If someone has an actual question about one of them, they can always ask.