PLTL Exam 1 Review

Question 1

Which organization is responsible for all debts of the business?

Accepted Answer

Sole proprietorship

Question 2

Which body issues International financial Reporting Standards?

Accepted Answer

International Accounting Standards Board

Question 3

Which is the best approach and least expensive in a fraud environment?

Accepted Answer

Having good records, physical controls, and independent reviews

Question 4

Which of the following is NOT one of the four basic financial statements?

Accepted Answer

Audit Report

Question 5

Revenue is recognized when goods and services are provided to customers and an amount will be recieved from the customer

Accepted Answer

True

Question 6

Match the following accounting assumptions to their correct description: Going Concern

Accepted Answer

Business is presumed to continue operating instead of being closed or sold

Question 7

Assets of a company increase by $100,000 during the year. Liabilities increase by $35,000. What is the change of equity?

Accepted Answer

increase of $65,000

Question 8

Which of the following is an external user of financial statements?

Accepted Answer

investors

Question 9

A company records its expenses incurred to generate the revenue reported. What principle is being explained?

Accepted Answer

Matching Principle

Question 10

Accounting is an information and measurement system that involves _______ an organization’s business activities.

Accepted Answer

Identifying, recording and communicating

Question 11

Von company has a total assets of $1,00,000, liabilities of $400,000, and equity of $60,000. What is its debt ratio?

Accepted Answer

40%

Question 12

The purpose of this statement is to describe a company&#x27;s financial position at a point of time.

Accepted Answer

Balance sheet

Question 13

Match the following accounting assumptions to their correct description: Business Entity

Accepted Answer

Business is accounted for separately from other businesses, including owner

Question 14

What is the name of the Exchanges of economic value between one entity and another entity?

Accepted Answer

External Transactions.

Question 15

Which of these is not a user of accounting information.

Accepted Answer

None of the above

Question 16

Match the following accounting assumptions to their correct description: Time Period

Accepted Answer

The life of a company can be divided into months and years

Question 17

Which of the following is NOT a source documents used to enter transactions in the accounting system.

Accepted Answer

None of the above

Question 18

According to Donald R. Cressey all these conditions must exist for someone to commit fraud except…

Accepted Answer

ethics

Question 19

Which of the following occurs on the left side of a T-account?

Accepted Answer

debit

Question 20

___________ defines the items in financial statements.

Accepted Answer

Elements

Question 21

Match the following to the correct description: Rationalization

Accepted Answer

attitude that justifies fraud or does not see its criminal nature

Question 22

Match the following accounting assumptions to their correct description: Monetary Unit

Accepted Answer

Transactions and events are expressed in money terms

Question 23

Match the following to the correct description: Opportunity

Accepted Answer

a person envisions a way to commit fraud with less risk of getting caught.

Question 24

Which body issues Generally Accepted Accounting Principles?

Accepted Answer

Financial Accounting Standards Board (FASB)

Question 25

________ is to provide information useful to investors, creditors, and others.

Accepted Answer

Objectives

Question 26

Company provided consulting services of $1,600 and rented a room for $300. Customer is billed $1,900. Record transaction

Accepted Answer

Debit Accounts Receivables;Credit Consulting Revenue; Credit Rental Revenue

Question 27

Match the following to the correct description: Pressure

Accepted Answer

sudden change in a person’scircumstances like, job loss,medical bills

Question 28

Tamara receives $3,000 cash in advance of providing services to a customer. How should Tamara record this transaction?

Accepted Answer

Credit Unearned Revenue

Question 29

Source documents do not provide objective and reliable evidence about transactions and events and their amounts.

Accepted Answer

False

PLTL Exam 1 Review

Questions 29

PLTL Exam 1 Review

Questions 29