Update on My Acct 301 Pretest

by on 22. Jan, 2007 in SFSU

Sorry for this late update, I was changing webhosts and so decided not to make another post until the dns had propogated (don’t worry if you don’t know what that means).

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.

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  • alcv

    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.

  • http://www.businessamateur.com business plan

    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.

  • http://www.businessamateur.com business plan

    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!

  • http://pulse.yahoo.com/_YWK5TZZMCNMRSNHVH5IFJFQYDY JenniferC

    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?

  • http://pulse.yahoo.com/_YWK5TZZMCNMRSNHVH5IFJFQYDY JenniferC

    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?

  • http://pulse.yahoo.com/_YWK5TZZMCNMRSNHVH5IFJFQYDY JenniferC

    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.

  • skyblue

    i got one:
    Paying an account receivable could:
    a.increase asset
    b.decrease liability
    c.increase expense
    e.none of above

  • http://www.businessamateur.com business plan

    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!

  • http://www.businessamateur.com business plan

    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.

  • darryl

    thanks for the insight..it really helped me on the test..

  • darryl

    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.

  • darryl

    The answer is actually C.. The word COMPLETELY should’ve automatically be eliminated.

  • darryl

    The answer is E.

  • alcv

    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.

  • skyblue

    number 7 and number 8 is the hard one in the test….and they’re the longest words problems too

  • http://pulse.yahoo.com/_YWK5TZZMCNMRSNHVH5IFJFQYDY JenniferC

    Thank you businessplan and Ben. I checked my test report today and I passed with a 22. Phew!

  • http://twitter.com/DoctorMontalban DoctorMontalban

    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.

  • http://www.businessamateur.com business plan

    Anyone taking 301 with J OSHAUGHNESSY MW 2:10PM this semester (Fall 10)?

  • http://www.businessamateur.com business plan

    Anytime my friend.

    - Singh

  • http://www.businessamateur.com business plan

    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.

  • http://twitter.com/DoctorMontalban DoctorMontalban

    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.

  • http://www.businessamateur.com business plan

    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.”

    • cyfrene

      I believe it should be income must have been 96k. I say this because assets increased by 80k. Liabilities paid off by 16k. If income was 96k, assets and OE would be 96k. Matching principle. Then the company pays off some liabilities with cash 16k. Debit payable 16k and credit cash 16k. It’s still the matching principle. Is this not correct?

  • http://twitter.com/DoctorMontalban DoctorMontalban

    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).

  • http://www.businessamateur.com business plan

    Congratulations Jennifer!

  • :D Jen

    wish me good luck tomorrow everyone! I wish with everything I have in my life that I will pass the test tomorrow!! :D

  • guest

    1. Paying account payable would:
    a)decrease liability
    b)increase asset
    c)decrease expense
    d)decrease equity
    e)none of the above
    I choose A. decrease liability. Not sure.

    2. If one part of the journal (decrease/increase) asset, the other part of the journal…(forgot about the problem asks if decrease or increase asset).
    a)increase liability
    b)decrease expense
    c)increase asset
    d)…
    e)none of the above

    3. 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.
    I don’t understand why you guys choose answer C – increase expense.

    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
    I don’t understand why it’s not the answer D.

  • Dylan

    In December, 2011 Company agreed to install contract price of $ 500,000 and received down payment $100,000 service revenue, Company completely finished first installation on December. Will paid in January 2012, on 12/31/2011;Company should make the following Entry

    a. Unearned Service revenue 400,000
    Service Revenue 4000,0000

    b. Service Revenue 100000
    Unearned Service Revenue 100000
    c.Cash 400000
    Service Revenue 400000
    d. Account Receivable 400000
    Service Revenue 400000
    e. none of the above

    Which of the following, if any, is false?
    a.expense may be recorded before any cash is paid for purchase
    b. revenue may be recognized before any cash is received by company
    c. Adjusting entry must involve asset, liabilities, revenue and expense
    d.the matching principle says that total asset= total liabilities and owners’ equity
    e. Closing entries are used at end of an accounting period to bring income statement to zero.

    • Mary

      The answer to your first question is A and the second question is D. The Matching Principle records transactions as they occur,rather than when cash changes , in this way revenue and expenses match.

      I am not sure of the answers to both of the questions below. I memorize them…Does any one know the answer to:

      If one part of the journal decreases assets, then the other part of the journal entry could…

      a) increase assets
      b) increase Revenue
      c)increase liabilities
      d) decrease expenses
      e) none of the above

      If one part of the journal entry increases liabilities then the other part of the journal entry could…

      a) increase revenue
      b) decrease revenue
      c) increase expenses
      d) none of the above

    • gest

      first question the answer is d, because even if they finished there work they still did not get paid tell next year,so it is accrued revenue and that is accounts receivable

  • Help

    colletting an account receviable would:
    a.increasing revenue
    b.increasing asset
    c.decrease asset
    d.decrease lability
    e.none of the above

    paying an account payable would:
    a.increasing expense
    b.decrease asset
    c.
    d.
    e.none of the above

  • gest

    dividends can be seen or reported in which financial statment: trial balance, income statement, reteined earning statement, non of the above

  • Mayyash

    expenses that is not yet billed for the year end and will be billed the next coming year do we recorded, for example a company is astemating 10000 in expenses for year 2011 but will be billed in 2012 and payed also in 2012, so in the end of year 2011 do we need any adjusted entry

  • Taylor

    I passed the pretest by studying off these blog comments. Because I cheated, now I’m failing my acct 301 class.

    Suggestion: Try to actually study for the pretest. It really helps prepare you for the class.

  • Jamesguan31

    Did they revised the pretest? Any Updates regarding the test?

    • Mightymisfits

      im takin the test tomorrow so ill let u kno

    • guest

      took it today, still the same (4/28)

  • Jamesguan331

    @b918cd0e3eb0d18adf1b0c2a97ede893:disqus, did they revised the pretest? Do you remember the questions/answers?

  • WARRIOR

    Sup guys, just took the test last week.  Got my grade back today and I passed with a really good grade.

    Seriously just look at the questions on this blog and you will pass no doubt, but I suggest you watch a couple professors on youtube on accounting basics.  I’m assuming acct 301 will require you to know the basics. 

    Like it was literally the questions seen on this blog.  Thanks for all the help and I will help whoever needs help as well.

  • JefferyLi123

    The test has been revised. I took it on 1/13/12. I passed on my first try with a score of 22. I mainly studied chapters two and three of my financial accounting book. Good Luck to everybody planning to take it.

    • melis

      I am taking the test this Saturday.. what is the test mainly about?? can you please give us examples of questions that are on the test…Thanks

      • W Lau05

        Good luck tomorrow, I have the test at 10AM also, I’ve been studying non stop and I found this blog. The person who said to studying the first 3 chapters of financial accounting book is probably right because all the questions everybody has been discussing in this blog, seems revolve around those 3 chapters (well my book is more like chapter 2,3,4).

  • Guest1

    Took the test on the 28th, still the May 2009 version. Using the info from other 2009 test takers here I managed to pass the first time. Thanks for your help everyone, and anyone needing help passing would do well to study the 2009 questions and the first few chapters of their accounting books.

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