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Statement of Financial Position Quiz #3 Flashcards | StudBud
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Statement of Financial Position Quiz #3
Statement of Financial Position Quiz #3
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StudBud Administration
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#FABM2 #Statement of Financial Position #Financial Accounting #Introduction to Accounting
Flashcards
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Questions
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Answers
1
A company's own stock it has issued and repurchases is called
dividend stock
issued stock
outstanding stock
treasury stock
2
Which of the following is not an external user of a business's financial information?
taxing authorities
customers
investors
employees
3
Entry to record write-off of uncollectable account using the direct-write off method involves
debit t accounts receivable
debit to allowance for bad debts
credit to cash
debit to bad debits expense
4
How should you record a capital expenditure?
debit asset
debit a liability
debit an expense
debit capital
5
Document that explains all differences between a company's cash records & bank figure is called
bank statment
bank reconciliation
electronic fund transfere
bank collection
6
What part of the accounting equation is
land
?
Revenue
Liabilities
Assets
Expenses
7
Which of the following is most closely linked to accounting conservatism?
lower-of-cost or market rule
materiality concept
consistency principle
disclosure principle
8
Which of the following accounts is a liability?
prepaid rent expense
accounts recievable
unearned revenue
service revenue
9
Which characteristic of a corporation is a disadvantage?
none are disadvantages
limited liability
mutual agency
double taxation
10
Recorded cash collection on account by debiting Cash & crediting accounts payable. What error?
liabilities are overstated
the trail balance will not balance
cash is overstated
expenses are overstated
11
When recording credit card or debit card sales using the net method,
cash received equals sales
cash received equals sales plus fees
cash received equals sales minus fees
12
Daniel's bonds payable carry stated interest of 5% & market rate of 7%. Price of the bonds are
face value
premium
discount
par value
13
Which method almost always produces the most depreciation on the first year?
all produce the same depreciation during the first year
straight-line
double-declining-balance
units-of-product
14
Which of the following accounts would be included in the plant assets category?
accumulated depreciation
office supllies
land held for investment
mortgage payable
15
Which type of business organization is owned by only one owner?
partnership
sole proprietorship
corporation
A, B, and C are all correct
16
The left side of an account is used to record which of the following?
increase
credits
debit or credit, depending on the type of account
debits
17
Detailed record of the changes in a particular asset, liability, or stockholders equity is ..
a trail balance
a ledger
a journal
an account
18
Which of the following accounts may appear on a post-closing trail balance?
cash, service revenue, and salaries expense
cash, salaries payable, and salaries expense
cash, salaries payable, and retained earnings
cash, salaries payable, and service revenue
19
Which requires accounting information to be complete, neutral, and free from material error?
economic entity assuption
going concern assumption
faithful representation concept
cost principle
20
If a company owns 25% of the voting stock of Pink Co, dividends received will be
credited to long-term investments Pink Co
debited to long-term investments Pink Co
credite to dividend income
credited to cash
21
Which situation indicated a net loss within the Income Statement section of the worksheet?
total debits exceed total credits
to debits equal total credits
total credits exceed total debits
none of the above
22
Which account does a merchandiser use that a service company does not use?
merchandise inventory
cost of goods sold
sale revenue
all of the above
23
Which of the following is NOT part of the definition of internal control?
safeguard assets
separation of duties
promote operational efficiency
encourage employees to follow company porcedure
24
Which of the following characteristics best describes a corporation?
gross profit, operating income, other rev, & exp, net income
gross profit, operating income, net income, other rev. & exp
operating income, gross profit, net income, other rev. & exp
other rev. & exp, operating income, gross profit, net income
25
Which cost is NOT recorded as part of the cost of a building?
annual building maintenance
real estate commission paid to buy the building
construction materials and labor
concrete for the buildings foundation
26
With good internal controls, the person who handles cash can also
account for cash receipts from customers
none of the above
account for cash payments
issue credits to costumers for sales returns
27
The balance sheet reports the
financial position for a specific period
financial position on a specific date
results of operations for a specific period
results of operations on a specific date
28
Which accounts would be closed at the end of the year using perpetual inventory system?
merchandise inventory
accounts payable
cost of goods sold
accounts receivable
29
The revenue recognition principle requires
time to be divided into annual periods to measure properly
expenses to be matched with revenue of the period
revenue to be recorded only after the business has earned it
revenue to be recorded only after the cash is recieved
30
Which of these is NOT an accounting equation
OE = A - L
A = OE - L
L = A - OE
A = L + OE
31
Which of the following statements concerning reversing entries is true?
reversing entries are required by GAAP
reversing entries R most often used w/ accrual-type adjustme
reversing entries are recorded before adjusting entries
reversing entires are dated December 31
32
A worksheet
is a journal used to record transactions
is financial statement that reports net income during period
a ledger listing account balance & changes in those accounts
internal doc that helps summarize data for prep of statement
33
Generally Accepted Accounting Principles (GAAP) are currently formulated by the
Financial Accounting Standards Board (FASB)
Institute of Management Accountants (IMA)
American Institute of Certified Public Accountants (AICPA)
Securities and Exchange Commission (SEC)
34
The Accounting Equation is
None of the above
Proprietorship = Assets + Liabilities
Assets = Liabilities - Proprietorship
Assets = Liabilities + Proprietorship
35
The two basic sources of corporate capital are
assets abd equity
retained earnings and dividends
paid-in capital and retained earnings
preferred and common
36
What intangible asset is recorded only as part of the acquisition of another company?
patent
goodwill
franchise
copyright
37
Which of the following accounts is NOT closed?
Depreciated expense
service revenue
dividends
accumulated depreciation
38
Separation of duties is important for internal control of
cash receipts
neither A or B
cash payments
both A and B
39
Assets and liabilities are listed on the balance sheet in order of their
purchase date
liquidity
balance
adjustments
40
The adjusted trail balance shows...
account balances after adjustments
revenues and expenses only
amounts that may be out of balace
assets and liabilities
41
Which inventory method assigns ending merch. invent the newest most recent costs during period
Specific Identification
FIFO
Weighted-average
LIFO
42
What part of the accounting equation is
salaries
?
Assets
Owner’s Equity
Liabilities
Expenses
43
Which principle/concept states businesses should use the same accounting method for all periods
conservatism
disclosure
consistency
materiality
44
Which sequence correctly summarizes the accounting process?
prepare trail balance, journalize trans, post to accounts
post to accounts, journalize trans, prepare trail balance
journalize trans, post to accounts, prepare trail balance
journalize trans, prepare trail balance, post to accounts
45
Which of the following is
NOT
one of the
3
main types of accounts used in Accounting?
Owners Equity
Assets
Liabilities
Capital
46
A small stock divident
all of the above
has no effect on total equity
decreases common stock
increase retained earnings
47
The employer is responsible for which of the following payroll taxes?
1.45% FICA-Medicare tax
6.2% FICA-OASDI tax
all of the above
Federal and State unemployment tax
48
Which method is not used to compute depletion?
straight-line method
double-declining balance method
depletion method
units-of-production method
49
A bond that matures in installments at regular intervals is a
term bond
periodic bond
terminal bond
serial bond
50
The two main inventory accounting systems are the...
perpetual and periodic
cash and accrual
purchase ans sale
returns and allowances
51
what do closing entries accomplish?
transfer revenues, expenses & dividends to retained earnings
all of the above
zero out the revenues, expenses, and dividends
bring retained earnings to the correct ending balance
52
Suppose Yummy issues common stock in exchange for a building. Yummy should record building as
its book value
its market value
value assigned by the board of directors
the par value of the stock given
53
Which of the following is true of accrual basis accounting and cash basis accounting?
cash basis accounting records all transactions
Accrual accounting records revenue only when it is earned
accrual accounting is not allowed under GAAP
all of the above are true
54
Which of the following steps of the accounting cycle is not completed at the end of the period?
prepare the post-closing trail balance
journalize transactions as they occur
journalize and post the closing enteries
prepare the financial statements
55
The debt to equity ration is calculated as
current liability/total equity
total liabilities/ total equity
total assets/total equity
total liablitities/total assets
56
Which of the following statements is correct?
accounts payable s increased with a credit
rent expense is increased with a credit
prepaid expenses are decreased with a debit
unearned revenue is increase with a debit
57
Known liabilities of estimated amounts are
ignored (record when paid)
reported only in the notes to the financial statements
reported on the income statment
reported on the balance sheet
58
What part of the accounting equation is
cash
?
Assets
Owner’s Equity
Liabilities
Expenses
59
Accounting is the information system that
measures business activites
all of the above
communicates the results to decision makers
processes information into reports
60
Adjusting the accounts is the process of
updating accounts at the end of the period
subtracting expenses from revenues to measure net income
zeroing out account balances to prepare for the next period
recording transactions as they occur during the period
