Final exam

Question 1

The primary objective of financial reporting is to provide information:

Accepted Answer

useful for making investment and credit decisions

Question 2

What is the journal entry to record a NSF check of $50?

Accepted Answer

Debit accounts receivable credit cash

Question 3

Jo makes a credit sale with terms 8/15, n/30. What does this mean?

Accepted Answer

They get an 8% discount if they pay within 15 days. Otherwise full in 30

Question 4

What is the journal entry to record $100 of interest earned on our bank balance?

Accepted Answer

Debit cash Credit interest revenue

Question 5

Fraud can be defined as:

Accepted Answer

An intentional misrepresentation of facts

Question 6

Which of the following accounts has a normal debit balance?

Accepted Answer

Dividends

Question 7

Which 2 accounts have a normal debit balance?

Accepted Answer

Expenses and Dividends

Question 8

Which of the following is NOT included in total paid-in capital?

Accepted Answer

Retained earnings

Question 9

What kind of account is unearned revenue?

Accepted Answer

Liability

Question 10

When the stated value is more than the market value, it is a....

Accepted Answer

Premium

Question 11

An accounts payable clerk issuing payments to a fictitious company controlled by the clerk- this is what kind of fraud?

Accepted Answer

Misappropriations of assets

Question 12

If a bank reconciliation included a deposit in transit of $790, the entry to record this reconciling item would include

Accepted Answer

No entry is required

Question 13

On the statement of cash flows, an increase in accounts receivable would be:

Accepted Answer

Subtracted from net income under operating activities

Question 14

What is the formula for the debt ratio?

Accepted Answer

Total assets/total liabilities

Question 15

Suzy’s Inc uses the double-declining balance method for depreciation on its computers. Which is NOT needed for DDB?

Accepted Answer

estimated residual value

Question 16

There are 2 parts to retained earnings- Paid in capital and SE

Accepted Answer

False

Question 17

When do Companies report dividends as a liability?

Accepted Answer

date of declaration

Question 18

Which of the following accounts does NOT appear on the balance sheet?

Accepted Answer

Salaries Expense

Question 19

ABC Company paid their vendor from the previous problem back for the full amount on account. What is the journal entry?

Accepted Answer

Debit accts payable credit cash

Question 20

The most basic purpose of Internal controls is

Accepted Answer

To safeguard assets

Question 21

Which of the following items should be accounted for as a capital expenditure?

Accepted Answer

Taxes paid in conjunction with the purchase of office equipment

Question 22

Inventory is classified as a(n) ________ while cost of goods sold is classified as a(n) _________.

Accepted Answer

Asset; Expense

Question 23

Which of the following does not appear on the bank side?

Accepted Answer

NSF Checks

Question 24

Would mandatory vacations and job rotation be an example of good internal control?

Accepted Answer

True

Question 25

activities that create long term liabiltities are____ and ones affecting long-term assets are __________ activities.

Accepted Answer

Financing; Investing

Question 26

DFW Co. received 12,000 in advance for a service to be performed over one year. What is the initial journal entry?

Accepted Answer

Debit Cash 12,000, Credit Unearned Revenue 12,000

Question 27

Which of the following would NOT be reported under operating activities?

Accepted Answer

Proceeds from sale of equipment

Question 28

When treasury stock is sold for more than its cost, the journal entry will include:

Accepted Answer

Credit paid-in capital

Question 29

In a bank reconciliation, bank collections are

Accepted Answer

Added to the book side

Question 30

ABC Company bought supplies on account from a vendor. What is the journal entry for this transaction?

Accepted Answer

Debit supplies credit accounts payable

Question 31

What is the quick ratio formula?

Accepted Answer

Cash & cash equivs + ST investments +current receivables/ current liab

Question 32

Which is NOT a part of the fraud triangle?

Accepted Answer

Greed

Question 33

If your assets increase and your liabilities increased by the same amount, Stockholders equity must have…

Accepted Answer

No change

Question 34

The accounting equation may be expressed as:

Accepted Answer

Assets = Liabilities + Stockholders Equity

Question 35

When you plan your business indefinitely or for the foreseeable future, this assumption can be seen

Accepted Answer

Continuity

Question 36

Loaning money to another company would have what effect on the statement of cash flows?

Accepted Answer

Subtracted under investing activities

Question 37

Payment of bonds payable is reported on the statement of cash flows under:

Accepted Answer

Financing activities

Question 38

The ______ assumption does not take into consideration inflation.

Accepted Answer

Stable Monetary

Question 39

The sale of inventory for cash is reported on the statement of cash flows under

Accepted Answer

Operating activities

Question 40

Joe lists a chair he bought for his house on his businesses’ balance sheet. This violates what assumption?

Accepted Answer

Entity

Question 41

Requiring that an employee with no access to cash do the accounting shows which characteristic of internal control?

Accepted Answer

Separation of duties

Question 42

Stock Dividends:

Accepted Answer

Have no effect on total stockholder equity

Question 43

All of the following are internal control procedures except

Accepted Answer

Sarbanes-Oxley reforms

Question 44

Amortizing the premium on bonds payable does which of the following?

Accepted Answer

Decreases the recorded amount of interest expense

Question 45

In a period of rising prices, which inventory method will have the highest cost of goods sold?

Accepted Answer

LIFO

Question 46

Bond carrying value equals Bonds payable

Accepted Answer

Plus premium on bonds payable

Question 47

What does the journal entry look like when we pay for rent ahead of time?

Accepted Answer

Debit Prepaid Rent Credit Cash

Question 48

IV Inc has determined that they used up 700 worth of supplies in 2019. Whats the adjusting entry made at the years end?

Accepted Answer

Debit Supplies Expense 700, Credit Supplies 700

Final exam

Questions 48

Final exam

Questions 48