2010-2011上学期Accounting 1B2010-2011上学期Accounting 1B.doc

DAY DATE: TIME: WRITING TIME: 180 minutes INSTRUCTIONS TO CANDIDATES: 1. Enter your name and student number in the space provided at the left of the test paper. 2. This is a closed book examination; therefore no written material, reference books or notes will be permitted into the examination room. Part A (10marks) MULTIPLE CHOICE (1 marks each) Choose the one alternative that best completes the statement or answers the question. 1) Purchasing a building for $120,000 by paying cash of $20,000 and obtaining a mortgage for $100,000 would: A increase assets and increase liabilities by $100,000 B increase net assets by $100,000 C increase liabilities by $120,000 D decrease assets and decrease liabilities by $20,000 2) Liquidity ratios measure: A the short term ability of a company to pay its maturing obligations B the operating success of a company for a period of time C the ability of a company to survive over a long time D the extent to which a company’s assets are financed by debt  3) Which is the correct order in which the following steps occur? 1. Post to the ledger 2. Prepare source document 3. Enter in the journal 4. Transaction occurs A 2,4,3,1 B 4,2,3,1 C 4,2,1,3 D 4,1,3,2 4) A company that receives money in advance of performing a service: A debits cash and credits accounts payable B debits unearned revenue and credits accounts payable C debits cash and credits unearned revenue D debits cash and credits accounts receivable 5) If total liabilities decreased by $14,000 during a period of time and shareholders’ equity increased by $6,000 during the same period then the change in total assets is A an increase of $14,000 B an increase of $20,000 C a decrease of $8,000 D an increase of $8,000 6) The entries which set the balances of the temporary accounts to zero are called: A closing entries B balancing entries C correcting entries D a