Bus1101 graded quizze PDF

Preview

Summary

University of the People principles of business management...

Description

Which of the following equations properly represents a the fundamental accounting equation? a. Assets + liabilities = owners' equity b. Assets = owners' equity c. Cash = assets d. Assets - liabilities = owners' equity Assets - liabilities = owners' equity In a ledger, debit entries cause: a. Decreases in liabilities, increases in assets, and decreases in owner's equity b. Increases in owner's equity, decreases in liabilities, and increases in assets c. Decreases in assets, decreases in liabilities, and increases in owner's equity d. Decreases in assets, increases in liabilities, and increases in owners' equity Decreases in liabilities, increases in assets, and decreases in owners' equity. If a company purchases equipment for $90,000 and pays in cash: a. Total assets will decrease by $90,000 b. Total assets will increase by $90,000 c. The company's total owners' equity will decrease d. Total assets will remain the same Total assets will remain the same Which of the following would not be included on the balance sheet? a. Accounts receivable b. Sales c. Accounts payable d. Cash Sales The matching principle is best demonstrated by: a. Using debits to record decreases in owners' equity and credits to record increases b. Recording the cost of sale in the same period as the revenue c. The equation A = L + OE d. Offsetting the cash receipts of the period with the cash payments made during the period Recording the cost of sale in the same period as the revenue The basic sequence in the accounting process can be best described as: a. Transaction, source document, journal entry, ledger account, trial balance

b. Transaction, journal entry, source document, ledger account, trial balance c. Source document, transaction, ledger account, journal entry, trial balance d. Transaction, source document, journal entry, trial balance, ledger accounts Transaction, source document, journal entry, ledger account, trial balance Which of the following errors would be discovered by preparation of a trial balance? a. The collection of an account receivable was recorded by a debit to the Land account rather than to the Cash account b. The collection of an account receivable for $319 was recorded by a $391 debit to Cash and a $391 credit to Accounts Receivable c. The collection of a $375 account receivable was not recorded at all d. The collection of a $225 accounts receivable was recorded by a $225 debit to Cash and a $225 debit to Accounts Receivable The collection of a $225 accounts receivable was recorded by a $225 debit to Cash and a $225 debit to Accounts Receivable In February of each year, the Ritz Hotel holds a very popular wine tasting. Tickets must be ordered and paid for in advance, and are typically sold out by November of the preceding year. The realization principle indicates that the revenue from these tickets sales should be recognized in the period in which the: a. Wine tasting is held b. Order is placed c. Payments are received d. Expenses associated with the wine tasting are paid in full Wine tasting is held Generally accepted accounting principles: a. May change over time b. Are established by the International Accounting Standards Board c. Both answers A and B d. Neither answer A or B May change over time The valuation of assets in the balance sheet is based primarily upon: a. What it would cost to replace the assets b. Current fair market value as established by independent appraisers c. Cost, because cost is usually factual and verifiable d. Cost, because in the event of liquidation, the assets would be sold at an amount equal to their original cost Cost, because cost is usually factual and verifiable

The appropriate journal entry to record equipment depreciation expense would consist of a debit to Depreciation Expense and a credit to which of the following accounts: a. Equipment b. Accumulated Depreciation: Equipment c. Retained Earnings d. Cash Accumulated Depreciation: Equipment Each year the accountant for Northeast Real Estate Company adjusts the recorded value of each asset to its market value. Using these market value figures on the balance sheet violates: a. The accounting equation b. The stable-dollar assumption c. The cost principle d. The business entity concept The cost principle Sidney Smart had expenses of $900 in June which she paid in July. She declared these expenses on her June income statement. By doing this she is following the accounting principle of: a. Revenue realization b. Matching c. Adequate disclosure d. Conservatism Matching It is the function of management accounting to perform the following activities, except: a. Preparing budgets b. Cost accounting c. Internal audits d. Audited financial statements Audited financial statements The purpose of making closing entries is to: a. Reset the temporary accounts and update retained earnings b. Enable the accountant to prepare financial statements at the end of the accounting period c. Establish new balances in the balance sheet accounts d. Reduce the number of expense accounts Reset the temporary accounts and update retained earnings

The two types of general ledger accounts are: a. Nominal and Temporary b. Assets and Liabilities c. Real and Temporary d. Income and Expense Real and Temporary The relationship between the income statement and the balance sheet may be described as follows: a. The assets shown in a balance sheet include all the revenue shown in the income statement b. The balance sheet summarizes the change in net income occurring between successive income statements c. The income statement summarizes the changes in cash occurring between two balance sheet dates d. The income statement explains part of the change in owner's equity between two balance sheet dates The income statement explains part of the change in owner's equity between two balance sheet dates. The bookkeeper prepared a check for $48 but accidentally recorded it as $95. When preparing the bank reconciliation, this should be corrected by: a. Depositing $47 into the bank account b. Withdrawing $47 from the bank account c. Adding $47 to the book balance d. Subtracting $47 from the book balance Adding $47 to the book balance Accounts receivable _________ a. Are usually converted to cash in 30 to 60 days b. Are relatively liquid assets c. Usually appear after short-term investments in marketable securities d. All of the above All of the above The accountant for the McCarthy Company forgot to make an adjusting entry to record depreciation for the current year. The effect of this error could be: a. An overstatement of assets, overstatement of net income, and overstatement of owners' equity b. An overstatement of assets offset by an understatement of owners' equity c. An overstatement of net income and an understatement of assets d. An overstatement of assets and of net income and an understatement of owners' equity

An overstatement of assets, overstatement of net income, and overstatement of owners' equity Efficient management of cash includes which of the following concepts? a. Pay each bill as soon as the invoice is received b. Reconcile cash accounts to bank statements only at the end of the year c. Prepare monthly cash budgets (forecasts) up to a year in advance d. Pay suppliers in cash out of cash sales receipts before depositing them in the bank Prepare monthly cash budgets (forecasts) up to a year in advance Closing entries would be prepared: a. After financial statements are prepared b. After an adjusted trial balance c. Before the post-closing trial balance d. Before adjusting entries Before the post-closing trial balance The cost of delivering merchandise to the customer is: a. Part of cost of goods sold b. An operating expense c. Used in the calculation of sales revenue d. A reduction of gross profit An operating expense Shop-N-Go Systems purchased cash registers on April 1 for $12,000. If this asset has an estimated useful life of four years, what is the net book value of the cash registers on May 31 if the company uses the straight -line method of depreciation? a. $250 b. $3,000 c. $11,500 d. $12,000 $11,500 Net income from the Income Statement appears on: a. The balance sheet b. The retained earnings statement c. Both the balance sheet and the retained earnings statement d. Neither the balance sheet nor retained earnings statement The retained earnings statement

When preparing a bank reconciliation, differences between the depositor's records and the bank statement can result from: a. Deposits in transit b. Bank service charges c. Items incorrectly recorded in the cash receipts journal d. All of the above All of the above Before any month-end adjustments are made, the net income of Russell Company is $68,000. However, the following adjustments are necessary: office supplies used, $2,060; services performed for clients but not yet recorded or collected, $2,600; interest accrued on note payable to bank, $2,000. After adjusting entries are made for the items listed above, Russell Company's net income would be: a. $72,660 b. $69,460 c. $66,540 d. Some other amount $66,540 Investments held for resale in expectation of making a profit are: a. Trading securities b. Long term assets c. Not to be recorded in the book balance d. Non-current assets Trading securities...