I got 17 in my Acctg 301 pretest out of 30. I first couldn’t believe it coz I didn’t guess a single thing on the test, when I was confused it was only between 2 choices and it happend in 4-5 questions. 21 and above is pass so I guess I will be taking this test again. No worries as I still have to complete 2 pre-requisites before I can take my first upper division accounting class.
Since friday, this thing has been making me crazy and at the same time I feel like something went terribly wrong. I was done within one hour and knew I would get more than 21 without any problems but I was soooooo wrong.
Let me tell you little about the pretest. The last time it was revised was in 2004. It had a question on Dividends. I have no idea how one can relate adjusting entries and dividends together. On the pretest website they explicitly say to review the 3rd chapter of any Intermediate Financial Accounting book and you will be good to go. Please tell what book out there talks about Dividends in the 3rd Chapter?
From SFSU Acct 301 Pre-test information page:
“Students may prepare for the pretest by studying any introductory financial accounting textbook which includes material on the double entry bookkeeping system (i.e., debits and credits). Most introductory financial accounting textbooks cover this material. A more efficient method of preparation is studying the review chapter, usually chapter three, of any intermediate financial accounting textbook.”
That’s not all, this Dividend question is a trick question. The answer is NONE or None of the above and I got it wrong. There was this other question out of the blue that had to do with some principle, answer to that was Recognition and I picked Matching because 3rd chapter in any accounting book deals with only matching concept.
Update 04/22/2009
There are two more questions I was able to get a hold of, one deals with Airline tickets and the other one is about Magazine Subscriptions. Does anyone remember anything about that?
Talk about Accounting and homework problems on AccountingBLOCK.
If a company has accrued salaries of $205,000 for December but are not going to be paid until January of next year. The company will record this amount as an expense on Dec 31.
its that one b)?
there’s a true/false question relates to the matching principle….
i remember a question’s answer but not the problem
d) cash 12000 A/R 10000
revenue 2000
e) cash 12000 A/R 2000
revenue 10000
i scored a 15 on the third try…help me out guys!! im taking it again this sat
accrued revenue
defered revenue
accrued expense
defered expense
Does anyone remember the question where it ask if the company will pay a notes payable of 6000 36000 or something like that?
The way they word the problems on the test is tricky. The questions I am posting are in my own words so everyone can understand easily.
A company has $100,000 of supplies. They buy $80,000 of supplies in addition to that. The company does not keep records of supplies as they are used. At the end of the year, there is $75,000 balance left.
The entry to record this at the end of the year would be..
a) Debit “Supplies Expense” $105,000 and credit “Supplies $105,000
To solve this problem, just make a T account. You have $100,000 + $80,000 with a total of $180,000 balance. If at the end of the year there is $75,000 left, that must mean the company should have used up $75,000 worth of supplies.
I picked “Matching Principle”
You have to record the accrued expenses to match them against the revenues in the same period. Which is what the matching principle says.
The Revenue Recognition Principle says that you recognize revenue when you perform services even if you do not receive the cash at that time.
I remember this one because this is one of the tricky ones.
The exact scenario is hard for me to recall.. the answer was.
Debit Cash 12,000
Credit Interest Receivable 2,000
Credit Interest Revenue 10,000
The person had only recorded $2,000 in Interest Receivable at the end of the year, and then made no entry until the cash was received next year. So you HAVE to remove the $2,000 from Interest Receivable that was recorded at the end of last year. Then credit the rest $10,000 when you get the cash.
congrats on passing singh! i’ve taken the test twice and failed both of them. im going to take it this saturday again. Thanks for sharing some of the q’s and a’s. I appreciate any help to pass this dreadful PRETEST…
I remember a question on principles. I cant remember the exact wording. but the choices were
- historical
- materiality
- full disclosure
- …..
- …..
I think the worst thing for me is when i got my test all the answers were written in. I exchanged my booklet but it had me worried because looking at this other persons answer that were completely different from mine was real disheartening.
Anyway the question I was referring to was where it said a company took out a notes payable of 360000 at 12 percent in nov 2011.
And then it asked what if would pay back after a certain period of time and the answer were
6000 to intrest payable and 6000 cash
36000 to intrest payable and 36000 …..
Anyone remember this.
Were the test diffrent each time?
@Dee
i took the exam last year on August 15, 2009. and this past saturday on August 7, 2010. Both exams were the same. The cover said “last revised on may 2009″
I still failed after having the same test -__-
Thanks alcv. One of my friends also took it for the first time on August 7 but did not pass the pretest by 1 point. He is going to take it again on August 14.
I cannot recall that question.
there was a question about a company estimating a bill and what they what accounts they should credit and debit. I might have been tricked because I said that their was no accounts needed to be adjusted because I thought since they didn’t get the bill yet how exactly would they know from an estimate? Anyone know what I am talking about.
there was a question about a company estimating a bill and what they what accounts they should credit and debit. I might have been tricked because I said that their was no accounts needed to be adjusted because I thought since they didn’t get the bill yet how exactly would they know from an estimate? Anyone know what I am talking about.
here’s a few questions i remember off the top of my head…for those who know the answers and are legitimate about it, please help the rest of us out…
1) GAAP authority derives from
-completely by SEC
-institute of management accountant
-…..accountants, creditors, investors, government, etc.
-court proceedings
2) What is the main purpose of adjusting entries
-to assure asset and liabilities are equal
-to recognize the true value of assets
-to recognize the true value of liabilities
-to assure revenues match expenses
-to assure liabilities match expenses
3) what is the accounting process
-post to journal, ledger, trial balance, adjust
-ledger, trial balance, adjust, close
(both seems very reasonable, the other ones are incorrect)
4) beginning balance of 100,000…purchase products of 80,000 throughout the year…paid 56,000 of the bills…75,000 was the ending balance….what do you record??
-don’t remember the answers…does anyone know?
5) according to FASB, what is the primary purpose of financial statements
-for creditors and investors
-for the IRS
-for the IRS and SEC
6) magazine subscription question…don’t really remember all the details but it was something like, customer paid for 1000 subscription for 2 yrs @ $36.00/ yr….what do you record
-I went with none of the above…does anyone know the correct answer?
7)sold something for 240,000…customer made a down payment of 100,000…what do you record?
purchase an item worth 500,000…made a down payment of 100,000…what do you record?
9) what best describe liabilities
-decrease net income
-decrease assets
-obligations to creditors
-A and C
-B and C
i took some of the questions posted and combined it with a few of my own questions. this test is beyond tricky and i wouldn’t be surprised if we all get an email stating there was a bunch of errors in the test. this is probably the hardest pretest at sfsu. i’ve taken the chemistry and the physics pretest and those were a breeze compared to this accounting pre-test. like previously stated, if anyone know the answers and are sure of it, please post it for the rest of us. it would be much appreciated
#3 confused me, too, since the two answers you mention are in the right order, but are both incomplete. Because they were just a portion of the cycle I chose “none of the above.” I was leaning towards the first one (journal, ledger, tb, adjust) but changed it to “none” since it seems weird to just pick 4 things, though starting with the right 4 things and leaving off the tail end kind of seemed right. Argh…irritating.
just curious, has anyone re-used their receipt instead of paying to re-take another pretest? The students literally just glanced at my receipt to see if i paid. If that is the only time they check for proof of payment then i was thinking of just trying the same receipt. After failing twice i do not want to spend another $20. The receipt only shows the amount paid and says “accounting 301 pretest.” There is no specified date, only the date i paid on shows.
thanks
Hello Darryl. I did take the test and pass it the first time with a decent score, so I am going to assume that the answers I put down were correct. Let me try to give answers. If I am wrong, please point it out to me.
1) GAAP authority derives from
a. Accountants, creditors, investors, government, etc.
On the test I went with “completely by SEC” but that is obviously not true. The next possible answer would be that the authority is derived from everyone including accounts, investors, government.
2) What is the main purpose of adjusting entries?
a. To assure revenues match expenses.
Adjusting entries are necessary to match revenues against expenses in the same period to get a true picture of what is happening with your business. The matching principle.
3) What is the accounting process?
a. None of the above
The reason I personally wrote down none of the above is because the accounting process involves posting to Journal, Ledger, Trial Balance, Adjusting, Financial Statements, Closing.
None of the answers actually had it in that format, so I picked “none of the above.” Please choose this at your own discretion.
4) There is $100,000 in a Supplies account. The company purchases additional $80,000 Supplies. The balance at the end of the year is 75,000. The company does not keep a running record of when supplies are used. What do you record?
a. Debit 105,000 Supplies expense
Credit 105,000 Supplies
I do believe this is what you are talking about. It was the first question on the second page.
5) According to FASB, what is the primary purpose of financial statements?
a. To inform creditors, investors and others to be able to make good decisions
This should be easy. The periodicity concept states that a company has to prepare financial statements at least once a year to provide information on assets, liabilities and other things that are useful to everyone.
6) A company receives $108,000 in November from 1000 customers for 3 years, at the rate of $36/year for magazine subscriptions. The company prints its first issue in December. At the end of the year what would you record?
a. Record $3000 as revenue and $105,000 as liabilities.
This is the second question on the test. At first, its confusing as hell because it is worded in such a stupid way. So a company has 1000 customers at $36 per customer for 3 years. So you actually received $36,000 per year for 3 years. (1000 customers multiplied by $36 per year) (3 years). Your total is $108,000. So if the company gets $36,000 per year, you now have to figure out how much the printed issue in December cost. You just divide $36,000 by 12 and get $3000.
7)sold something for 240,000…customer made a down payment of 100,000…what do you record?
I can’t think of this problem.
purchase an item worth 500,000…made a down payment of 100,000…what do you record?
I can’t think of this problem.
9) What best describes liabilities?
a. Obligations to Creditors
That’s all it is, obligation to creditors. Liabilities do not affect net income. Liabilities do not necessarily decrease assets, but they are definitely obligations to creditors.
For example: When a company declares dividends, they debit Retained Earnings and credit Dividends Payables. When they pay the dividends with stock, they reduce Dividends Payable and credit Common Stock. In this case, Common Stock is not an asset account but Stockholders’ equity. So liabilities do not always reduce assets, which is what the question is asking.
Hope my explanations helped slightly.
I took the test today, don’t know if i passed but I remember these questions and being doubtful if i had the correct answer:
1. Paying a utility bill could:
a. increase expenses
b. increase assets
c. increase liabilities
d. (forgot)
I picked a. increase expense. Example: Debit Utilities Expense, Credit Utilities Payable
2. According to FASB the main purpose of providing financial reports is to:
a. Record company’s profits for the year
b. Help make lending and investing decisions
c. Provide information to SEC
d. Provide information to IRS
e. C and D
I picked A, now looking back, the answer should be B
3. Workers did work in 2011 but paid in 2012. THe following adjusting entry is recorded at the ended of 2011: Wages expense XXX
Wages payable XXX
Which principle was applied?
a. cash accounting principle
b. matching principel
c. historical cost principle
d. revenue recognition principle.
I picked B. Now looking back, maybe the answer could’ve been A or D
4. Declared cash dividends in 2011 but not paid until 2012.
Do you:
a. Record dividend expense for 2011
b. Record dividend expense for 2012
c. Record dividend payable for 2012 on the balance sheet
d. A and C but not B
E. None of the above.
What were your guys’ answer to these?
alright, so I took my 3rd attempt today. I felt like i did better. Here are some of the questions i was able to remember.
Now if we combine all the questions and answers on this blog everyone should be able to pass. SFSU is making this so much harder for us to get classes and they keep raising “tuition.” I just want to help everyone out and make life a little easier.
1. Paying a utility bill could
a. no effect on assets
b. increase total assets
c. increase total expense
d. increase liabilities
e. none of the above
2. Which is not the correct form for Adjusting Entries
a. Debit expense and credit revenue
b. debit assets and credit revenue
c. credit liability and debit expense
d. debit expense and credit assets
e. none of the above
3. Accrued liability is best describes as amount..
a. paid and undisclosed on balance sheet
b. paid and matched with revenue
c. unpaid and disclosed on balance sheet
d. unpaid and disclosed on income statement
e. none of the above
4. An adjusting entry contains a debit to an asset account and a credit to a revenue account. This is an example of..
a. accrued expense
b. accrued revenue
c. deferred expense
d. deferred revenue
e. none of the above
5. A trial balance…
a. normally only prepared after closing entries and events
b. is a chronological record of account transactions
c. is a listing of temporary accounts and their balances
d. proves that the account balance are correct if it balance
e. none of the above
6. December 20, 2011 declared dividends to pay in 2012. which is correct, if any?
a. record dividend expense for 2011
b. record dividend expense in 2012 when paid
c. record a dividend payable in 2011 balance sheet
d. a and c but not b
e. none of the above
7. If one part of the journal decreases liability, the other part of the journal…
a. increase revenue
b. decrease revenue
c. increase expense
d. none
e. a and c, not b.
8. Which statement is true (i only remembered one answer, which is the one i chose)
- Debits increase assets and expenses
9. If assets increase by $80,000 and liabilities decrease by $16,000
a. effect on Owners’ equity cannot be determined
b. increase must have been $64,000
c. increase must have been $96,000
d. Owners’ equity must have increased by $96,000
e. none of the above
10. Dec 2011 milby company sells merchandise to another company for $240,000. A down payment of $100,000 was made and the rest will be paid in 2012. Which is correct?
a. record revenue of $100,000 and unearned revenue $140,000 for 2011
b. record revenue of $240,000 in 2011
c. record no revenue for 2011
d. record accounts receivable of $240,000 in 2011
e. none of the above
11. Which of the following was false (i only remember two of the answers and the wording is really off. if you guys remember the others please put em on here).
c. the adjusting journals may contain assets, liabilities, expenses, revenues.
e. something about closing income summary and having the balances at 0.
The first one seems correct.
2) Yes, the answer should have been B
3) This is the matching principle. You matched the expenses you incurred to the revenues you received in the same period.
4) When dividends are DECLARED, a company would debit Retained Earnings and credit Dividends Payable.
Answer should have been C. They show up as a liability on the balance sheet.
1. Paying a utility bill could
a. no effect on assets
b. increase total assets
c. increase total expense
d. increase liabilities
e. none of the above
This question does not tell you if you are paying off utilities payable or paying straight with cash. I assume you will be paying off Utilities Payables liabilities. In that case, paying a utility bill would increase your expenses.
2. Which is not the correct form for Adjusting Entries
a. Debit expense and credit revenue
b. debit assets and credit revenue
c. credit liability and debit expense
d. debit expense and credit assets
e. none of the above
You do not debit expenses and credit revenue. You could debit expenses and credit liabilities (accounts payable). You could also debit expenses and credit assets, if you pay with cash. You can definitely debit assets and credit revenue in the form of Cash and Service Revenue if you receive the money as you perform the services. So the answer is A.
3. Accrued liability is best describes as amount..
a. paid and undisclosed on balance sheet
b. paid and matched with revenue
c. unpaid and disclosed on balance sheet
d. unpaid and disclosed on income statement
e. none of the above
An accrued liability would be unpaid and show up on the balance sheet as a short term payable.
4. An adjusting entry contains a debit to an asset account and a credit to a revenue account. This is an example of..
a. accrued expense
b. accrued revenue
c. deferred expense
d. deferred revenue
e. none of the above
Accrued Revenue is the correct answer. You debit Accounts Receivable and credit Service Revenue.
5. A trial balance…
a. normally only prepared after closing entries and events
b. is a chronological record of account transactions
c. is a listing of temporary accounts and their balances
d. proves that the account balance are correct if it balance
e. none of the above
None of the answers seem to be correct. It’s a listing of accounts and their balances, but not all the accounts are temporary. So it is not C. The answer should have been E, none of the above.
6. December 20, 2011 declared dividends to pay in 2012. which is correct, if any?
a. record dividend expense for 2011
b. record dividend expense in 2012 when paid
c. record a dividend payable in 2011 balance sheet
d. a and c but not b
e. none of the above
The answer is C. Record dividends payable as a short term liability on the Balance Sheet.
7. If one part of the journal decreases liability, the other part of the journal…
a. increase revenue
b. decrease revenue
c. increase expense
d. none
e. a and c, not b.
If you are decreasing liabilities, you are most likely increasing expense. For example: if you pay off Utilities Payable, you would debit Utilities Expense and credit Utilities Payable.
That successfully decreases liability and increases expense. So the answer should have been C.
8. Which statement is true (i only remembered one answer, which is the one i chose)
- Debits increase assets and expenses
Me too.
9. If assets increase by $80,000 and liabilities decrease by $16,000
a. effect on Owners’ equity cannot be determined
b. increase must have been $64,000
c. increase must have been $96,000
d. Owners’ equity must have increased by $96,000
e. none of the above
I chose A, effect on Owner’s equity cannot be determined. I just could not figure out a way to see how you would be able to determine that. Not sure about this. It could have also been “none of the above.”
10. Dec 2011 milby company sells merchandise to another company for $240,000. A down payment of $100,000 was made and the rest will be paid in 2012. Which is correct?
a. record revenue of $100,000 and unearned revenue $140,000 for 2011
b. record revenue of $240,000 in 2011
c. record no revenue for 2011
d. record accounts receivable of $240,000 in 2011
e. none of the above
You record revenue of $240,000 in 2011. Revenue recognition principle. Regardless of if you have received all the money yet or not, you still recognize the whole amount as revenue.
11. Which of the following was false (i only remember two of the answers and the wording is really off. if you guys remember the others please put em on here).
c. the adjusting journals may contain assets, liabilities, expenses, revenues.
e. something about closing income summary and having the balances at 0.
Cannot recall this question.
All in all, anyone that wants to pass the 301 pretest the first time should read the comments. There is no way you can fail now that you have all the answers.
Thanks to everyone who posted questions and gave answers.
Good luck and see you on campus!
I also was unsure about this question:
GAAP derives its authority from :
a. completely from SEC
b. the profession of managerial accounting
c. the accounting process, creditors, investors, government
d. court proceedings
e. none of the above.
I would’ve gone with C but I put A for some reason. What did you guys put for this?
Actually #9 was If assets increase by $80,000 and liabilities decrease by $16,000
a. effect on Owner’s equity cannot be determined
b. net income was 64,000
c. net income was 96,000
d. owner’s equity must have increased $96,000
e. none of the above
I put D and I’ll explain why I chose that answer:
Assets= Liabilities + Owner’s Equity
For example 100 = 50 +50
I put 96 of my own cash into the company. 196= 50 + 146
I pay off Wages Payable by 16, thus, decreasing liabilities and assets by 16. 180=34 +146
So in the end, Assets have increased by 80, and liabilities have decreased by 16. Owner’s Equity has increased by 96.
What do you guys’ think?
For #3, I put journal, ledger, trial balance, adjusting because the question wasn’t asking for the complete accounting process. All the answers only have four parts of the accounting process. This really was a trick question though, I wouldn’t be surprised if a lot of people got this question wrong.
i got one:
Paying an account receivable could:
a.increase asset
b.decrease liability
c.increase expense
e.none of above
You had really good reasoning, but I have a few concerns about it still.
There is no rule that says that liabilities and owner’s equity must be split in 50-50 to equal the assets of 100%.
For example, we have no idea if assets are 100 = 50 + 50. It could be 100 = 30 + 70. It still keeps the equation in balance. In that case, your numbers would be completely off.
That is the reason I am not sure the effect on owner’s equity can be determined.
The question just mentioned that assets were increased by $80,000. We don’t know how they were increased. We could have performed services for that much in that period.
As such, assets can increase without owner actually putting in additional investments. That is the reason I still believe that the effect on owner’s equity is hard to determine.
Too bad they don’t tell us which questions we got wrong so we can accurately determine.
Good thinking though Jennifer!
None of the above.
Accounts receivable is an asset account. When you get the cash, you’re just moving it from one asset account to another. The result is nothing.
thanks for the insight..it really helped me on the test..
Hey JenniferC, I took the test this last Saturday and passed it with a score of 25 so my answer are most likely reliable..
1. Paying a utility bill could:
a. increase expenses
2. According to FASB the main purpose of providing financial reports is to:
b. Help make lending and investing decisions
3. Workers did work in 2011 but paid in 2012. THe following adjusting entry is recorded at the ended of 2011: Wages expense XXX
Wages payable XXX
Which principle was applied?
b. matching principle
4. Declared cash dividends in 2011 but not paid until 2012.
c. Record dividend payable for 2011 on the balance sheet
if someone has a different answer please reply to this post to assure that Jennifer gets the correct answer.
The answer is actually C.. The word COMPLETELY should’ve automatically be eliminated.
The answer is E.
Thanks Singh, Darryl, Jennifer, and everyone else for your help. I failed by 1…. I believe i have one more chance to take the pretest. With all of your help i should now be able to pass.
number 7 and number 8 is the hard one in the test….and they’re the longest words problems too
Thank you businessplan and Ben. I checked my test report today and I passed with a 22. Phew!
I’m with you. Even if it was 100 = 30 + 70, an increase of 80k in assets on one side, and a decrease of 16k in liabilities on the other, it would have a +96k effect on O.E., per the accounting equation.
Anyone taking 301 with J OSHAUGHNESSY MW 2:10PM this semester (Fall 10)?
Anytime my friend.
- Singh
This problem is tricky. Let me take another shot at it.
It looks like It would have an effect on the Owner’s Equity for the given amount, but the choice in the answer is “Owner’s equity is INCREASED by $96,000″ which is not the case.
We know only 4 things effect OE – Investments, Revenue, Expenses and Withdrawals.
When they recorded the liability, they increased the expenses. This would have DECREASED Owner’s Equity.
So, when the company gets $80,000 through whatever (Service revenue or Investment), Owner’s Equity is changed (increased) by $80,000.
When we pay the $16,000 in Liabilities, we debit the Liability and credit Cash.. which has no effect on Owner’s Equity. The expense that was recorded when the liability was credited, it would have lowered Owner’s Equity at that point in time. Even keeping that in mind, Owner’s Equity would have been –increased– by $96,000 as per one of the answers.
So while the Owner’s Equity was effected by $96,000.. it was not increased by that amount. It was increased by $64,000 ($80,000 – 16000)
This COULD mean the answer was (B) Net income increased by $64,000 if no other transactions in that period took place. But it is safe to assume that realistically that won’t be the case.
In the end, you can only say that we have no idea how owner’s equity is effected.
Please fix my reasoning if I am wrong.
It could also be a $96k investment to the business, which would increase O.E. by 96k and assets (cash) by the same amount; with a $16k decrease of liabilities and a reduction in cash (bringing the increase to 80k), keeping the accounting equation in tact.
What you said makes sense as well.
This question is especially tricky because it can be interpreted in different ways.
Here is another way of looking at the problem — lol
Company gets $80,000 in Cash through either investment or Revenue. The result is that Owner’s Equity is increased by $80,000. Then we pay the liability, we debit it and credit cash. There is no effect on owner’s equity in the end. So the only thing that happened (from the given information) was that Owner’s Equity increased by $80,000.
In this case, the answer would be “None of the above.”
In your example the net change to assets would be $64k, which isn’t what the question presented. Per the question, the net increase in assets has to be $80k, not $64k.
The liability sits on the balance sheet as a claim against those assets, so for a +80 net change in assets to occur, assets had to be $96k prior to the claim. That $96k would’ve come from revenue or investment, as you mention, keeping the: $80k (A) = -16k (L) + 96k (O.E.) equation in tact (which it always must be).
Congratulations Jennifer!
wish me good luck tomorrow everyone! I wish with everything I have in my life that I will pass the test tomorrow!!