General MCQ for General Financial Accounting

1. From the following list of selected account balances, determine the total for the shareholders' equity section of the Balance Sheet for XYZ Company. $2,500 - Investment in Stock of ABC Company $5,000 - Retained Earnings $3,000 - Cash $2,000 - Note Payable to Suppliers $10,000 - Common Stock $7,500 - 8% Preferred Stock

2. XYZ Company failed to record the purchase of inventory on account at the end of 2008. In which of the following ways is the Balance Sheet misstated?

3. The balance in all asset accounts combined is $100,000 on December 1. During December, the following transactions took place: - Purchase of $10,000 of inventory for cash - Purchase of $15,000 of machinery on account - Retirement of $20,000 in bonds with cash Given this information, what is the combined balance in the asset accounts on December 31?

4. XYZ Company is interested in disposing of one of its subsidiaries and is trying to decide on the maximum price it might be able to charge. Which valuation method below would the company be most likely to use?

5. XYZ Company has assets and liabilities of $15,000 and $12,000, respectively. If the company issues an additional $1,500 of stock for cash, what will be the balance in shareholders' equity following the transaction?

6. At the beginning of the year, XYZ Company owed $14,500 to its creditors for inventory purchases. At year end, the company owed $9,150. During the year, the company made payments totaling $48,500 to its creditors for inventory purchases. What was the cost of the additional inventory that was purchased during the year?

7. At the beginning of the year, XYZ Company reported Accounts Receivable of $39,000. During the year, the company had credit sales totaling $288,000. At year end, the Accounts Receivable balance was $8,000 higher than the beginning balance. How much cash was collected on the accounts during the year?