Update on My Acct 301 Pretest

Zahid, Thanks a bunch. I see what you mean now. Thanks to the guest above as well. More to follow.

Hey Zahid can you answer a few questions I put up earler?
If you debit an increase an asset, it could also mean.. increase in liabilities, decrease in expenses, don’t really remember the answers, but its something like that.

Dividend question

Airline question, where tickets were bought in December (or something) and at the end of the period, they were some that were unused/or will be used in January. Lets say.. total of all tickets was $800. At the end of the period they would $200 would be unused or will be used in January. How would you journal this?

I’m trying to remember all the questions so I know what I did right and what I did wrong in the test.

I just took the pretest this morning. I'm not sure exactly which question your first one was, but there was one that asked what the affect of a debit was on accounts. I'm not certain, but I'm pretty sure the answer was: debits increase assets and expenses and decrease liabilities and revenue/owner's equity.
The second question you asked about should have debited Unearned service revenue for what was used up by the end of Dec (800-200=600, I'm using your numbers) and credited service revenue for 600. The remaining debit balance in the unearned revenue should be 200 that is unused as of Jan 1.

Other topics on the exam:
-FASB: what it is (1?)
-GAAP: what it is(1?)
-***Adjusting Entries (5+?): what accounts are frequently used to record AE (e.g. assets, liability, equity, etc.) and the effects on those accounts (inc. or dec.); how to record adjusting entries based on unearned revenue, interest, depreciation, and similar scenarios
-The order you prepare financial statements: income stmt., stmt. of owner's equity, balance sheet (1?)… I'm starting to blank on the rest, but I'll post back as I think of more. My advice is to use the entire time and READ EACH QUESTION SOOO CAREFULLY! If you've had a class in accounting basics, the test isn't so very hard, but I felt it was very tricky. Good luck everyone.

and i recommend to you too

I took the pretest this morning, its now May 2009 revised. Similar to the previous one, but I didn't see that unearned airline revenue question on there anymore…

god,,i have to take the pre test next sat, and it is the last exam 8/15….will they open another exam on 8/22…i signed up acct 301,307…if i fail i would hv no class to take..

Has anyone found the correct answers to the May 2009 updated version of the pretest? I got a 19 on my first try.

Questions but I don’t really remember the choices:

Paying an Accounts Payable will: decrease liabilities, increase liabilities, decrease assets, …., none of the above

Collecting an Accounts Receivable will: increase assets, decrease assets, decrease liabilities, ….., none of the above
This will increase assets right?

So i did not pass the first time.. but failed at trying to remember the questions that are on the test

can anyone post some example of what questions are on the new revised test?

Paying on Accounts Payable will increase your liabilities.

Accounts Payable is a liability account, so if you are buying something but do not pay with cash at that point, you are increasing your liabilities that have to be paid off in the future.

Collecting on Accounts Receivable will not have any effect on your accounts. Keep in mind that according to the “Revenue recognition principle” you recognize revenue when services are performed.

According to that, your Accounts Receivable is already an asset account. When you collect money, all you're doing is debiting Cash and crediting Accounts Receivable. There is no effect.

I am registered to take the Accounting 301 Pretest on August 7. Hopefully it will not be too bad.

If you pay off Accounts Payable, you are decreasing your liabilities. It will not decrease your assets because a liability account simply is the portion of business assets that creditors have a legal claim against. So when you credited “Accounts Payable” you already accounted for the decreased assets. When you pay it off, you are just reducing the liabilities.

When you collect Cash from someone, you will credit Accounts Receivable. This has no effect on your assets or liabilities. Accounts Receivable is already an asset account. You accounted for the increase in assets when you performed the services (Revenue Recognition Principle) and debited Accounts Receivable. All you are doing by collecting on that account is debiting cash and crediting Accounts Receivable. The effect is none since both of them are asset accounts.

So, how did it go?

Same here. I believe the keyword to look for in that question was.. “SEC (exclusively)”

They do not determine it exclusively, so the next best answer should have been that the rules are derived from acceptance from creditors, investors, government, etc.

I am sure that one I got wrong because I erased it and went with “Securities and Exchange (exclusively)” answer although I felt it was the wrong choice.

Looks like I am posting as “Singh” when I am not logged into this account, just to clear the confusion.

The score is in and I did pass with a good score after taking it the first time. I still believe that the test is WAY too tough for an average student.

There were people who have been trying to pass it since last year but keep failing over and over. I just don't understand the purpose of having a test if someone has passed their financial accounting 1 course with a good grade.

Not only does the test require you to have THOROUGH knowledge of accounting, the questions are worded really badly. At first sight they don't even make sense. Then you have some questions that could be considered “subjective.”

I do not want to scare anyone with what I am saying. I just want people to be WELL PREPARED before going into taking this test.

My advice is to drill down on adjusting entries as much as you can. Drill down on prepaid assets and unearned revenues, as you will have questions to adjust these in some extremely weird ways on the test.

There was a question about dividends but as well — it said something like…
A company DECLARES dividends on November 12. This is going to show up on.
a) Income Statement
b) State of owner's equity
c) Balance sheet
d) None of the above

When you see that question, you must know that a company record dividends as a liability as soon as they are DECLARED. So you would have to debit Retained Earnings and credit Dividends Payable. This would show up on the Balance Sheet as a short-term liability.

Good luck.

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)?

accrued revenue
defered revenue
accrued expense
defered expense

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 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.

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.

@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 -__-

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

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

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?