Accounting Exam 2024

Use business funds to pay for their child's college tuition after taking a withdrawal. What principle is broken.

What is the primary characteristic of an income stock?

Buy building for $500,000 but retail prices rise and value is $550,000. Accountant as 550,000. Broken Principle?

A customer pays $1,200 for a previously billed service. Credit?

business sells product in Dec but doesn't record COGS until January. Which GAAP principle is being violated?

A business changes its method of inventory valuation every year without explanation. What is violated?

According to the Revenue Recognition principle, when should revenue be recorded?

Tiffany records a transaction she knows happened last week even though there is no receipt. What principle is broken?

The owner withdraws $5,000 from the business for personal use. Debit?

What does the Conservatism principle suggest?

A company that sells luxury cars sees its stock value drop during a recession. What type of stock is this?

The business pays $300 for its monthly utility bill. Credit?

A company fails to close its books every year and instead reports every 5. Which GAAP principle violated?

The business performs a service for a client and earns $1,200. The client pays immediately. Debit?

The business buys a new computer for $2,000 and pays with cash. Debit?

Sarah records her personal car payment as a business expense. Which GAAP principle is she violating?

What does the Matching principle ensure?

A tech company decides to sell shares to the public for the first time. What is this process called?

The business performs a service for a client and earns $1,200, but the client will pay later. Credit?

The business pays $1,500 for its monthly office rent. Debit?

The business buys a new computer for $2,000 on account. Credit?

The business purchases $400 in office supplies on credit. Debit?

What does the Dual Aspect principle emphasize?

A company hides a major lawsuit from its financial statements. Which GAAP principle are they violating?

Record the current market value of an asset instead of its purchase price. Which GAAP principle are they violating?

You only expense out 1/2 cost of paint for a building project. Didn't use the other 1/2this year. Broken principle?

The business buys $4,000 of inventory on account. Debit?

Coca-Cola is considered this type of stock due to its reliability and stability. What type of stock is it?

Assuming your business will continue on regardless of its financial health.

Which GAAP principle states that a business's financial records should be separate from the owner's personal finances?

A business omits a note about a major loan default when it gives its financial report to stockholders. Violation?