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$1.00 Accounting Multiple Choice - $1per question
- From Business: Accounting , Business: Finance
- Closed, but you can still post tutorials
- Due on Oct. 29, 2007
- Asked on Oct. 29, 2007 at 11:50:25AM
Q:1. A private organization which establishes broad accounting principles as well as specific accounting rules is the
a. Securities and Exchange Commission.
b. Internal Revenue Service.
c. Financial Accounting Standards Board.
d. Corporate Board of Directors.
2. Taco Hut pays the current month’s rent, $600. This transaction
a. increases revenues by $600.
b. increases assets by $600.
c. decreases liabilities by $600.
d. decreases stockholders’ equity by $600.
3. A corporation with total stockholders’ equity of $85,000 paid a $5,000 business debt. As a result of this transaction, total stockholders’ equity
a. did not change.
b. increased by $5,000.
c. decreased by $5,000.
d. increased to $90,000.
4. The right side of an account is always
a. the debit side.
b. the credit side.
c. the balance of that account.
d. carried forward to the next accounting period.
5. Posting is the process of
a. preparing a chart of accounts.
b. adding a column of figures.
c. transferring journal entries to ledger accounts.
d. recording entries in a journal.
6. Warton Company depreciates its equipment at the rate of $500 per month. The January 31 entry to record depreciation expense would include
a. a debit to Equipment for $500.
b. a credit to Retained Earnings for $500.
c. a credit to Accumulated Depreciation for $500.
d. a credit to Depreciation Expense for $500.
7. Logan Company debited Prepaid Insurance for $960 on July 1, 2005 for a one-year fire insurance policy. If the company prepares monthly financial statements, failure to make an adjusting entry on July 31 for the amount of insurance that has expired would cause
a. assets to be overstated by $960 and expenses to be understated by $960.
b. expenses to be overstated by $80 and assets to be understated by $80.
c. assets to be overstated by $80 and expenses to be understated by $80.
d. expenses to be overstated by $960 and assets to be understated by $960.
8. Which one of the following accounts is not closed at the end of an accounting period?
a. Common Stock
b. Dividends
c. Service Revenue
d. Insurance Expense
9. The second set of debit and credit columns on a work sheet is generally used for
a. closing entries.
b. the trial balance.
c. the balance sheet figures.
d. the adjustments.
10. Geronimo Company had net sales of $400,000, cost of goods sold of $225,000 and other operating expenses of $100,000. The company’s gross profit is
a. $225,000
b. $175,000
c. $125,000
d. $75,000
11. In order to be relevant, accounting information must
a. be neutral.
b. be verifiable.
c. help predict future events.
d. be a faithful representation.
12. In a period of rising prices, the inventory method that results in the lowest income
tax payment is
a. LIFO.
b. FIFO.
c. average cost.
d. specific identification.
13. The inventory methods that result in the most current costs in the income
statement and balance sheet are
Income Statement Balance Sheet
a. FIFO FIFO
b. LIFO FIFO
c. LIFO LIFO
d. FIFO LIFO
14. Which of the following is false with regard to a work sheet?
a. Before the adjusting entries are recorded in the general journal, they are
recorded in the adjustments columns of the work sheet.
b. A work sheet is a required step in the accounting cycle.
c. When a work sheet is used, the preparation of financial statements is still required.
d. If a credit is needed to balance the income statement columns on the work sheet, a
debit will be needed to balance the balance sheet columns.
15. For which of the following types of adjusting entries are liabilities understated and
expenses understated before the adjusting entry is made?
a. Unearned Revenues
b. Accrued Revenues
c. Prepaid Expenses
d. Accrued Expenses
16. At December 31, 2003, before any year-end adjustments, Herr Company's Insurance
Expense account had a balance of $400 and its Prepaid Insurance account had a
balance of $1,900. It was determined that $1,500 of the Prepaid Insurance had expired. .
The adjusted balance for Insurance Expense for the year would be
a. $1,500.
b. $400.
c. $1,900.
d. $2,300.
17. If the total debit column exceeds the total credit column of the income statement
columns on a work sheet, then the company has
a. earned net income for the period.
b. an error because debits do not equal credits.
c. suffered a net loss for the period.
d. to make an adjusting entry.
18. The net income (or loss) for the period
a. is found by computing the difference between the income statement credit column
and the balance sheet credit column on the work sheet.
b. cannot be found on the work sheet.
c. is found by computing the difference between the income statement columns of the
work sheet.
d. is found by computing the difference between the trial balance totals and the
adjusted trial balance totals.
19. A reversing entry
a. reverses entries that were made in error.
b. is the exact opposite of an adjusting entry made in a previous period.
c. is made when a business disposes of an asset it previously purchased.
d. is made when a company sustains a loss in one period and reverses the effect with
a profit in the next period.
20. A trial balance would only help in detecting which one of the following errors?
a. A transaction that is not journalized
b. A journal entry that is posted twice
c. Offsetting errors that are made in recording the transaction
d. A transposition error when transferring the debit side of journal entry to the ledger
21. A basic assumption of accounting assumes that the dollar is
a. unrelated to business transactions.
b. a poor measure of economic activities.
c. the common unit of measure for all business transactions.
d. useless in measuring an economic event.
22. The common characteristic possessed by all assets is
a. long life.
b. great monetary value.
c. tangible nature.
d. future economic benefit.
23. The basic accounting equation may be expressed as
a. Assets = Equities.
b. Assets – Liabilities = Stockholders’ Equity.
c. Assets = Liabilities + Stockholders’ Equity.
d. all of these.
24. The primary purpose of the statement of cash flows is to report
a. a company's investing transactions.
b. a company's financing transactions.
c. information about cash receipts and cash payments of a company.
d. the net increase or decrease in cash.
25. Revenues would not result from
a. sale of merchandise.
b. initial investment of cash by owner.
c. performance of services.
d. rental of property.
26. If ending inventory is understated, net income and assets will be
Net Income Assets
a. Understated Understated
b. Overstated Overstated
c. Understated Unaffected
d. None of the above
27. When the allowance method is used for bad debts, the entry to write off an individual
account known to be uncollectible involves a
a. debit to an expense account.
b. credit to an expense account.
c. credit to the Allowance account.
d. debit to the Allowance account.
28. The constraint of conservatism is best expressed as
a. the cost of applying an accounting principle should not exceed its benefit.
b. only material items should be recorded and reported.
c. when in doubt, choose the method that will least likely overstate assets and net
income.
d. the lower of cost or market method should be used for inventories.
29. The preparation of closing entries
a. is an optional step in the accounting cycle.
b. results in zero balances in all accounts at the end of the period so that they are
ready for the following period's transactions.
c. is necessary before financial statements can be prepared.
d. results in transferring the balances in all temporary accounts to Retained Earnings
30. Which of the following errors will cause a trial balance to be out of balance? The entry
to record a payment on account was
a. not posted at all.
b. posted as a debit to Cash and a credit to Accounts Payable.
c. posted as a debit to Cash and a debit to Accounts Payable.
d. posted as a debit to Accounts Receivable and a credit to Cash.
Attachments:
ACC362_R6_-_Final_Exam.doc (49K)
