Question 1

In order to be relevant, accounting information must:

Accepted Answer

A)  be neutral. 
B)  be verifiable. 
C)  help predict future events. 
D)  be a faithful representation. 
A)  be neutral. 
B)  be verifiable. 
C)  help predict future events. 
D)  be a faithful representation. C

Question 2

Which of the following errors will cause a trial balance to be out of balance? The entry to record a payment on account was:

Accepted Answer

A)  not posted at all. 
B)  posted as a debit to Cash and a credit to Accounts Payable. 
C)  posted as a debit to Cash and a debit to Accounts Payable. 
D)  posted as a debit to Accounts Receivable and a credit to Cash. 
A)  not posted at all. 
B)  posted as a debit to Cash and a credit to Accounts Payable. 
C)  posted as a debit to Cash and a debit to Accounts Payable. 
D)  posted as a debit to Accounts Receivable and a credit to Cash. C

Question 3

Bison Corp. purchased 25,000 shares of its $2 par common stock at a cost of $12 per share on April 30, 2012. The stock was originally issued at $10 per share. The entry to record the purchase of the stock should include a debit to:

Accepted Answer

A)  Common Stock for $50,000. 
B)  Treasury Stock for $50,000. 
C)  Common Stock for $300,000. 
D)  Treasury Stock for $300,000. 
A)  Common Stock for $50,000. 
B)  Treasury Stock for $50,000. 
C)  Common Stock for $300,000. 
D)  Treasury Stock for $300,000. D

Question 4

On November 30, Thatcher Company issued a $12,000, 6%, 6-month note to the National Bank. The entry on Thatcher's books to record the payment of the note at maturity will include a credit to Cash for:

Accepted Answer

A)  $12,000. 
B)  $12,720. 
C)  $12,180. 
D)  $12,360. 
A)  $12,000. 
B)  $12,720. 
C)  $12,180. 
D)  $12,360.

Question 5

A daily cash count of register receipts made by a cashier department supervisor demonstrates an application of which of the following internal control principles?

Accepted Answer

A)  Documentation procedures. 
B)  Segregation of duties. 
C)  Establishment of responsibility. 
D)  Independent internal verification. 
A)  Documentation procedures. 
B)  Segregation of duties. 
C)  Establishment of responsibility. 
D)  Independent internal verification.

Question 6

Starting with net income and adjusting it for items that affected reported net income but which did not affect cash is called the:

Accepted Answer

A)  direct method. 
B)  indirect method. 
C)  working capital method. 
D)  cost-benefit method. 
A)  direct method. 
B)  indirect method. 
C)  working capital method. 
D)  cost-benefit method.

Question 7

Land should be recorded on Poin's books at:

Accepted Answer

A)  $330,000. 
B)  $386,000. 
C)  $372,000. 
D)  $430,000. 
A)  $330,000. 
B)  $386,000. 
C)  $372,000. 
D)  $430,000.

Question 8

The assumption that assumes a company will continue in operation long enough to carry out its existing objectives is the:

Accepted Answer

A)  economic entity assumption. 
B)  going concern assumption. 
C)  monetary unit assumption. 
D)  periodicity assumption. 
A)  economic entity assumption. 
B)  going concern assumption. 
C)  monetary unit assumption. 
D)  periodicity assumption.

Question 9

The primary accounting standard-setting body in the United States is the:

Accepted Answer

A)  Securities and Exchange Commission. 
B)  Accounting Principles Board. 
C)  Financial Accounting Standards Board. 
D)  Internal Revenue Service. 
A)  Securities and Exchange Commission. 
B)  Accounting Principles Board. 
C)  Financial Accounting Standards Board. 
D)  Internal Revenue Service.

Question 10

All of the following are intangible assets except:

Accepted Answer

A)  patents. 
B)  land improvements. 
C)  goodwill. 
D)  franchises. 
A)  patents. 
B)  land improvements. 
C)  goodwill. 
D)  franchises.

Question 11

The constraint of conservatism is best expressed as:

Accepted Answer

A)  the cost of applying an accounting principle should not exceed its benefit. 
B)  only material items should be recorded and reported. 
C)  when in doubt, choose the method that will least likely overstate assets and net income. 
D)  the lower-of-cost-or-market method should be used for inventories. 
A)  the cost of applying an accounting principle should not exceed its benefit. 
B)  only material items should be recorded and reported. 
C)  when in doubt, choose the method that will least likely overstate assets and net income. 
D)  the lower-of-cost-or-market method should be used for inventories.

Question 12

Which of the following should be classified as an extraordinary item?

Accepted Answer

A)  Effects of major casualties not infrequent in the area. 
B)  Write-off of a significant amount of receivables. 
C)  Loss from the expropriation of facilities by a foreign government. 
D)  Losses due to a bitter, lengthy labor strike. 
A)  Effects of major casualties not infrequent in the area. 
B)  Write-off of a significant amount of receivables. 
C)  Loss from the expropriation of facilities by a foreign government. 
D)  Losses due to a bitter, lengthy labor strike.

Question 13

The statement of cash flows is a(n):

Accepted Answer

A)  required supplemental financial statement. 
B)  required basic financial statement. 
C)  optional basic financial statement. 
D)  optional supplementary statement. 
A)  required supplemental financial statement. 
B)  required basic financial statement. 
C)  optional basic financial statement. 
D)  optional supplementary statement.

Question 14

Shipping terms of FOB destination mean that the:

Accepted Answer

A)  purchaser is responsible for the shipping charges. 
B)  shipping charges are debited to Freight-Out. 
C)  items should be in the purchaser's inventory account at year-end if the items are in transit. 
D)  Both (a) and (c) above. 
A)  purchaser is responsible for the shipping charges. 
B)  shipping charges are debited to Freight-Out. 
C)  items should be in the purchaser's inventory account at year-end if the items are in transit. 
D)  Both (a) and (c) above.

Question 15

Helix Company has a $280,000 balance in Accounts Receivable and a $2,000 debit balance in Allowance for Doubtful Accounts. Credit sales for the period totaled $1,800,000. What is the amount of the bad debt adjusting entry if Helix uses a percentage-of-receivables basis (at 10%)?

Accepted Answer

A)  $30,000. 
B)  $28,000. 
C)  $32,000. 
D)  $30,400. 
A)  $30,000. 
B)  $28,000. 
C)  $32,000. 
D)  $30,400.

Question 16

Benson Supply bought equipment at a cost of $72,000 on January 2, 2008. It originally had an estimated life of ten years and a salvage value of $12,000. Benson uses the straight-line depreciation method. On December 31, 2012, Benson decided the useful life likely would end on December 31, 2013, with a salvage value of $6,000. The depreciation expense recorded on December 31, 2012, should be:

Accepted Answer

A)  $6,000. 
B)  $21,000. 
C)  $12,000. 
D)  $10,500. 
A)  $6,000. 
B)  $21,000. 
C)  $12,000. 
D)  $10,500.

Question 17

Carne Manufacturing declared a 10% stock dividend when it had 200,000 shares of $5 par value common stock outstanding. The market price per common share was $15 per share when the dividend was declared. The entry to record this dividend declaration includes a credit to:

Accepted Answer

A)  Stock Dividends of $300,000. 
B)  Paid-in Capital in Excess of Par for $200,000. 
C)  Common Stock for $300,000. 
D)  Stock Dividends for $100,000. 
A)  Stock Dividends of $300,000. 
B)  Paid-in Capital in Excess of Par for $200,000. 
C)  Common Stock for $300,000. 
D)  Stock Dividends for $100,000.

Question 18

Which of the following would not be included in the operating activities section of a statement of cash flows?

Accepted Answer

A)  Cash inflows from returns on loans (i.e., interest). 
B)  Cash inflows from returns on equity securities (i.e., dividends). 
C)  Cash outflows to governments for taxes. 
D)  Cash outflows to reacquire treasury stock. 
A)  Cash inflows from returns on loans (i.e., interest). 
B)  Cash inflows from returns on equity securities (i.e., dividends). 
C)  Cash outflows to governments for taxes. 
D)  Cash outflows to reacquire treasury stock.

Question 19

The preparation of closing entries:

Accepted Answer

A)  is an optional step in the accounting cycle. 
B)  results in zero balances in all accounts at the end of the period so that they are ready for the following period's transactions. 
C)  is necessary before financial statements can be prepared. 
D)  results in transferring the balances in all temporary accounts to Retained Earnings. 
A)  is an optional step in the accounting cycle. 
B)  results in zero balances in all accounts at the end of the period so that they are ready for the following period's transactions. 
C)  is necessary before financial statements can be prepared. 
D)  results in transferring the balances in all temporary accounts to Retained Earnings.

Question 20

If merchandise is sold for $2,000 subject to credit terms of 2/10, n/30, the entry to record collection in full within the discount period would include a:

Accepted Answer

A)  debit to Sales Discounts for $40. 
B)  credit to Cash for $1,960. 
C)  credit to Accounts Receivable for $40. 
D)  None of the above. 
A)  debit to Sales Discounts for $40. 
B)  credit to Cash for $1,960. 
C)  credit to Accounts Receivable for $40. 
D)  None of the above.

In order to be relevant, accounting information must:

Which of the following errors will cause a trial balance to be out of balance? The entry to record a payment on account was:

Bison Corp. purchased 25,000 shares of its $2 par common stock at a cost of $12 per share on April 30, 2012. The stock was originally issued at $10 per share. The entry to record the purchase of the stock should include a debit to:

On November 30, Thatcher Company issued a $12,000, 6%, 6-month note to the National Bank. The entry on Thatcher's books to record the payment of the note at maturity will include a credit to Cash for:

A daily cash count of register receipts made by a cashier department supervisor demonstrates an application of which of the following internal control principles?

Starting with net income and adjusting it for items that affected reported net income but which did not affect cash is called the:

Land should be recorded on Poin's books at:

The assumption that assumes a company will continue in operation long enough to carry out its existing objectives is the:

The primary accounting standard-setting body in the United States is the:

All of the following are intangible assets except:

The constraint of conservatism is best expressed as:

Which of the following should be classified as an extraordinary item?

The statement of cash flows is a(n):

Shipping terms of FOB destination mean that the:

Helix Company has a $280,000 balance in Accounts Receivable and a $2,000 debit balance in Allowance for Doubtful Accounts. Credit sales for the period totaled $1,800,000. What is the amount of the bad debt adjusting entry if Helix uses a percentage-of-receivables basis (at 10%)?

Carne Manufacturing declared a 10% stock dividend when it had 200,000 shares of $5 par value common stock outstanding. The market price per common share was $15 per share when the dividend was declared. The entry to record this dividend declaration includes a credit to:

Which of the following would not be included in the operating activities section of a statement of cash flows?

The preparation of closing entries:

If merchandise is sold for $2,000 subject to credit terms of 2/10, n/30, the entry to record collection in full within the discount period would include a:

Introduction to Financial Statements

A Further Look at Financial Statements

The Accounting Information System

Accrual Accounting Concepts

Merchandising Operations and the Multiple-Step Income Statement

Reporting and Analyzing Inventory

Fraud, Internal Control, and Cash

Reporting and Analyzing Receivables

Reporting and Analyzing Long-Lived Assets

Reporting and Analyzing Liabilities

Filters

Exam 11: Reporting and Analyzing Stockholders Equity

In order to be relevant, accounting information must:

Which of the following errors will cause a trial balance to be out of balance? The entry to record a payment on account was:

Bison Corp. purchased 25,000 shares of its $2 par common stock at a cost of $12 per share on April 30, 2012. The stock was originally issued at $10 per share. The entry to record the purchase of the stock should include a debit to:

On November 30, Thatcher Company issued a $12,000, 6%, 6-month note to the National Bank. The entry on Thatcher's books to record the payment of the note at maturity will include a credit to Cash for:

A daily cash count of register receipts made by a cashier department supervisor demonstrates an application of which of the following internal control principles?

Starting with net income and adjusting it for items that affected reported net income but which did not affect cash is called the:

Land should be recorded on Poin's books at:

The assumption that assumes a company will continue in operation long enough to carry out its existing objectives is the:

The primary accounting standard-setting body in the United States is the:

All of the following are intangible assets except:

The constraint of conservatism is best expressed as:

Which of the following should be classified as an extraordinary item?

The statement of cash flows is a(n):

Shipping terms of FOB destination mean that the:

Helix Company has a $280,000 balance in Accounts Receivable and a $2,000 debit balance in Allowance for Doubtful Accounts. Credit sales for the period totaled $1,800,000. What is the amount of the bad debt adjusting entry if Helix uses a percentage-of-receivables basis (at 10%)?

Carne Manufacturing declared a 10% stock dividend when it had 200,000 shares of $5 par value common stock outstanding. The market price per common share was $15 per share when the dividend was declared. The entry to record this dividend declaration includes a credit to:

Which of the following would not be included in the operating activities section of a statement of cash flows?

The preparation of closing entries:

If merchandise is sold for $2,000 subject to credit terms of 2/10, n/30, the entry to record collection in full within the discount period would include a:

Introduction to Financial Statements

A Further Look at Financial Statements

The Accounting Information System

Accrual Accounting Concepts

Merchandising Operations and the Multiple-Step Income Statement

Reporting and Analyzing Inventory

Fraud, Internal Control, and Cash

Reporting and Analyzing Receivables

Reporting and Analyzing Long-Lived Assets

Reporting and Analyzing Liabilities

Filters