Bookkeeper's Hiring Test One
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1. Which of the following is an asset account?
A. Retained Earnings
B. Unearned Revenue
C. Prepaid Insurance
D. Social Security Taxes Withheld
2. Which of the following is not a balance sheet account?
A. Wages Payable
B. Prepaid Rent
C. Advertising Expense
D. Unearned Revenue
3. During January your firm, which is on the accrual basis, performed services and mailed a $2500 invoice of which the customer promptly paid $1600. On March 23, the customer pays the $900 balance due. How do you record receipt of the $900 balance due?
A. Cash $900, Revenue $900
B. Cash $900, Accounts Receivable $900
C. Cash $2500, Unearned Revenue $1600, Revenue $900
D. Cash $900, Unearned Revenue $1600, Revenue $2500
4. AnCo wrote $7700 in checks that had not cleared the bank as of the date of the bank statement. In AnCo's bank reconciliation, $7700 would be:
A. Added to the balance per books
B. Deducted from the balance per books
C. Added to the balance per bank
D. Deducted from the balance per bank
5. If a company writes a $3200 check but records it as $2300, the $900 difference is:
A. Added to the balance per bank in a bank reconciliation
B. Deducted from the balance per books in a bank reconciliation
C. Added to the balance per books in a bank reconciliation
D. Deducted from the balance per bank in a bank reconciliation
6. On January 1, your calendar-year company, which is on the accrual basis, receives a $72,000, 10% note receivable. If, as of December 31, your company has collected $7,000 interest for the year, what adjusting entry do you record?
A. Cash- $720 Interest Revenue- $720
B. Interest Revenue- $720 Interest Receivable- $720
C. Interest Receivable- $200 Interest Revenue- $200
D. Interest Revenue- $200 Interest Payable- $200
7. On November 1, your calendar-year company, which is on the accrual basis, receives a $5000 advertising bill from a magazine for the next 5 months. If you pay and record $1000 the same day and the remainder next year, what entry, do you record on December 31?
A. Advertising Expense $1000, Cash $1000
B. Advertising Expense $2000, Advertising Payable $200
C. Advertising Expense $1000, Advertising Payable $1000
D. Advertising Expense $5000, Advertising Payable $5000
8. On October 15, your firm, which is on the accrual basis, accepts a $30,000 advance on a $0,000 painting job and books the advance in Deferred Revenue. If, at year end, 30% of the work has been completed, what adjusting entry do you record?
A. Cash- $21,000 Revenue- $21,000
B. Deferred Revenue- $21,000 Revenue- $21,000
C. Deferred Revenue- $9,000 Revenue- $9,000
D. Revenue- $9,000 Deferred Revenue- $9,000
9. Your accrual-basis company pays a $5,000 advance on a $20,000 paint job, recording it in Painting Expense. If, at year end, !0% of the job is completed, what adjusting entry do you record?
A. Painting Expense- $3,000 Prepaid Painting- $3,000
B. Painting Expense- $3,000 Cash- $3,000
C. Prepaid Painting- $3,000 Painting Expense- $3,000
D. Painting Expense- $2,000 Prepaid Painting- $2,000
10. On July 17, your firm receives $600 from Customer C representing partial payment of its $1,350 accounts receivable balance and records it as follows: Cash- $600 Accounts Receivable, Customer D- $600. If you discover the weeor a week later on July 24, what correcting entry, if any, should you record?
A. Accounts Receivable- $600 Cash- $600
B. Allowance for Doubtful Accounts- $600 Accounts Receivable- $600
C. Accounts Receivable- $600 Revenue- $600
D. Accounts Receivable, Customer D- $600 Accounts Receivable, Customer C- $600
11. If employee Rhonda is paid $10 an hour and recorded the following hours for the workweek, what are her gross wages for the workweek under federal law? Monday-8 Tuesday-10 Wednesday-7 Thursday-8 Friday-12 Saturday-0 Sunday-7 TOTAL-52
12. Which of the following employees are exempt from Social Security tax withholding?
A. Employees over age 65
B. Employees over age 59 1/2
C. Employees of any age collecting Social Security benefits
D. None of the ebove are exempt from Social Security tax withholding
13. An employer must provide a W-2 to an employee by
A. March 31 of the following year
B. February 15 of the following year
C. January 31 of the following year
D. 30 days after a terminated employee's last day of work
14. When your firm hires Alan as a warehouse inventory clerk just for the summer, you must classify him as:
A. An independent contractor or employee
B. An independent contractor
C. An employee and withhold all employment taxes
D. An employee but need not withhold employment taxes
15. On October 5, your firm purchases a delivery van with the following data: COST- $25,000 SALVAGE VALUE- $5000 USEFUL LIFE- 5 years. Your firm will depreciate it for book purposes under generally accepted accounting principles and for tax purposes under MACRS. What is the depreciable base of the delivery van?
A. $25,000 for both book and tax purposes
B. $20,000 for both book and tax purposes
C. $25,000 for book purposes and $20,00 for tax purposes
D. $20,000 for book purposes and $25,000 for tax purposes
16. On July 1 your calendar year firm purchases a building with the following data: BUILDING- $500,000 LAND- $100,000 SALVAGE LIFE- $100,000 USEFUL LIFE- 50 years. If your company used the straight-line method, what is the entry to record depreciation expense as of December 31?
A. Accumulated Depreciation- $10,000, Depreciation Expense- $10,000
B. Depreciation Expense- $5,000, Accumulated Depreciation- $5,000
C. Depreciation Expense- $10,000, Accumulated Depreciation- $10,000
D. Depreciation Expense- $4,000, Accumulated Depreciation- $4,000
17. On January 1, your calendar year company purchases a machine with the following data: Cost- $10,000, Salvage Value- $2,000, Useful Life- 8 years. What entry would you record for depreciation on December 31 under the double declining balance method?
A. Accumulated Depreciation- $2,000, Depreciation- $2,000
B. Depreciation Expense- $2,500, Machine- $2,500
C. Depreciation Expense- $2,000, Accumulated Depreciation- $2,000
D. Depreciation Expense- $2,500, Accumulated Depreciation- $2,500
18. On May 1 2006, your calendar year firm purchases and places in service a machine with a $5,000 cost, 10 year life, and $10,000 salvage value that is 7-year property under MACRS and therefore is depreciated 14.29% in 2006. On September 29 2006, your firm sells the machine for $4,200. What depreciation deduction can your firm claim for the machine on its 2006 federal income tax return?
19. If a firm purchases the assets below during the year, what is the maximun section 179 deduction? The firm purchased a machine for $35,500 with a useful life of 5 years and a salvage value of $5,000, office furniture for $67,000 with a useful like of 7 years and a salvage value of $6,700, and a building for $200,000
20. How do you record a purchase on account of $500 plus $40 shipping under the perpetual method?
A. Purchases- $500 Cash-$500
B. Purchases- $540 Accounts Payable- $540
C. Merchandise Inventory- $500 Freight In-$40 Accounts Payable- $540
D. Merchandise Inventory- $540 Accounts Payable- $540
21. If your company, which uses the perpetual method, purchases inventory for $10,000 at 2/10 net 30, records the purchase as shown, and pays in full after the discount period, what should you do? RECORD: Merchandise Inventory - $9,800 Accounts Payable- $9,800
A. Debit Accounts Payable for $10,000
B. Debit Purchase Discounts Lost for $200
C. Credit Purchase Discounts Lost for $200
D. Credit Merchandise Inventory for $200
22. How do you record a $60 refund on a $900 cash inventory purchase under the perpetual method?
A. Cash- $60 Purchase Returns and Allowances- $60
B. Cash- $60 Sales- $60
C. Cash- $60 Merchandise Inventory- $60
D. Cash- $60 Cost of Goods Sold- $60
23, Under the perpetual method, how do you record a $900 cash sale of inventory that cost $600?
A. Cash- $900 Sales- $900
B. Cash- $900 Cost of Good Sold- $600 Merchandise Inventory- $600 Sales-$900
C. Cash- $900 Merchandise Inventory- $600 Cost of Goods Sold- $600 Sales- $900
D. Cash- $900 Cost of Goods Sold- $600 Merchandise Inventory- $300
24. If a company pays the delivery cost on its sales, it:
A. Includes delivery cost in its cost of goods sold
B. Allocates the delivery cost between cost of goods sold and ending inventory
C. Records delivery cost as a selling expense
D. Adds delivery cost to the ending inventory
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