Question 1

Which of the following is NOT an asset?

Accepted Answer

A)  Cash 
B)  Notes receivable 
C)  Contributed capital 
D)  Land 
A)  Cash 
B)  Notes receivable 
C)  Contributed capital 
D)  Land

Question 2

A business is obliged to repay debt and equity financing.

Accepted Answer

A) True 
 B)False

Question 3

What is the amount of current assets on the classified balance sheet?

Accepted Answer

A)  $113,540 
B)  $64,040 
C)  $23,490 
D)  $37,580 
A)  $113,540 
B)  $64,040 
C)  $23,490 
D)  $37,580

Question 4

Which line items on the balance sheet would be classified as long term?

Accepted Answer

A)  Cash; Supplies; Accounts Payable. 
B)  Property, Plant and Equipment; Notes Payable; Other Assets. 
C)  Supplies; Property, Plant and Equipment; Notes Payable. 
D)  Total Assets; Total Liabilities; Other Assets. 
A)  Cash; Supplies; Accounts Payable. 
B)  Property, Plant and Equipment; Notes Payable; Other Assets. 
C)  Supplies; Property, Plant and Equipment; Notes Payable. 
D)  Total Assets; Total Liabilities; Other Assets.

Question 5

A credit would make which of the following accounts decrease?

Accepted Answer

A)  Contributed Capital. 
B)  Inventories. 
C)  Notes Payable. 
D)  Retained Earnings. 
A)  Contributed Capital. 
B)  Inventories. 
C)  Notes Payable. 
D)  Retained Earnings.

Question 6

If the total dollar value of credits to an account exceeds the total dollar value of debits to that account, the ending balance of the account will be a debit balance.

Accepted Answer

A) True 
 B)False

Question 7

Purrfect Pets, Inc., uses $10,000 in cash to pay $10,000 on Accounts Payable. This would result in a:

Accepted Answer

A)  $10,000 credit to Cash and a $10,000 credit to Accounts Payable. 
B)  $10,000 debit to Cash and a $10,000 debit to Accounts Payable. 
C)  $10,000 credit to Cash and a $10,000 debit to Accounts Payable. 
D)  $10,000 debit to Cash and a $10,000 credit to Accounts Payable. 
A)  $10,000 credit to Cash and a $10,000 credit to Accounts Payable. 
B)  $10,000 debit to Cash and a $10,000 debit to Accounts Payable. 
C)  $10,000 credit to Cash and a $10,000 debit to Accounts Payable. 
D)  $10,000 debit to Cash and a $10,000 credit to Accounts Payable.

Question 8

Which of the following is a FALSE statement?

Accepted Answer

A)  Total Assets are $1,929,800. 
B)  Total Stockholders' equity is $1,130,260. 
C)  Long-term liabilities are $130,260. 
D)  The amount of current assets are 2.5 times the amount of current liabilities. 
A)  Total Assets are $1,929,800. 
B)  Total Stockholders' equity is $1,130,260. 
C)  Long-term liabilities are $130,260. 
D)  The amount of current assets are 2.5 times the amount of current liabilities.

Question 9

The common characteristic possessed by all assets is

Accepted Answer

A)  long life. 
B)  great financial value. 
C)  physical substance. 
D)  future economic benefit. 
A)  long life. 
B)  great financial value. 
C)  physical substance. 
D)  future economic benefit.

Question 10

What would be the effect on the current ratio if the company paid $10,000 on its accounts payable?

Accepted Answer

A)  The current ratio would increase since it is now greater than 1 to 1. 
B)  The current ratio would decrease since it is now greater than 1 to 1. 
C)  This transaction would have no effect on the current ratio. 
D)  The current ratio would change in the same direction whether the ratio were now greater than or less than 1 to 1. 
A)  The current ratio would increase since it is now greater than 1 to 1. 
B)  The current ratio would decrease since it is now greater than 1 to 1. 
C)  This transaction would have no effect on the current ratio. 
D)  The current ratio would change in the same direction whether the ratio were now greater than or less than 1 to 1.

Question 11

A company signed an agreement to rent store space from another company. This is an example of a recordable transaction.

Accepted Answer

A) True 
 B)False

Question 12

The amount of Total Current Assets that would be reported on the company's balance sheet at the end of the year would be

Accepted Answer

A)  $180,800. 
B)  $368,500. 
C)  $145,700. 
D)  $298,800. 
A)  $180,800. 
B)  $368,500. 
C)  $145,700. 
D)  $298,800.

Question 13

Each account is assigned a number and this listing of all accounts is called a

Accepted Answer

A)  Trial Balance 
B)  Journal 
C)  Ledger 
D)  Chart of Accounts 
A)  Trial Balance 
B)  Journal 
C)  Ledger 
D)  Chart of Accounts

Question 14

What is the amount of the total liabilities to be reported on the balance sheet?

Accepted Answer

A)  $60,000 
B)  $0 
C)  $90,000 
D)  $80,000 
A)  $60,000 
B)  $0 
C)  $90,000 
D)  $80,000

Question 15

A company purchases $23,000 of supplies in the current month and promises to pay for them next month. How would the company record a liability for the supplies?

Accepted Answer

A)  This liability is not a recognized liability until the payment is due. 
B)  $23,000 would be journalized as a credit to Accounts Payable. 
C)  $23,000 would be journalized as a debit to Accounts Payable. 
D)  $23,000 would be journalized as a debit to Prepaid Expenses. 
A)  This liability is not a recognized liability until the payment is due. 
B)  $23,000 would be journalized as a credit to Accounts Payable. 
C)  $23,000 would be journalized as a debit to Accounts Payable. 
D)  $23,000 would be journalized as a debit to Prepaid Expenses.

Question 16

Account names in the chart of accounts are:

Accepted Answer

A)  general purpose and do not indicate the nature of the account. 
B)  not consistent in their use throughout the records. 
C)  linked to account numbers. 
D)  the names mandated for use by the FASB. 
A)  general purpose and do not indicate the nature of the account. 
B)  not consistent in their use throughout the records. 
C)  linked to account numbers. 
D)  the names mandated for use by the FASB.

Question 17

The current ratio can be used to evaluate a company's ability to pay liabilities in the short -term, and in general, a lower ratio means better ability to pay.

Accepted Answer

A) True 
 B)False

Question 18

Conservatism is

Accepted Answer

A)  the requirement that businesses should intentionally understate assets. 
B)  the requirement that businesses should intentionally overstate liabilities. 
C)  the requirement that if an asset's value falls over time it will continue to be reported at its original cost. 
D)  the requirement that when faced with uncertainty about the numbers to report, accountants must use the least optimistic measure. 
A)  the requirement that businesses should intentionally understate assets. 
B)  the requirement that businesses should intentionally overstate liabilities. 
C)  the requirement that if an asset's value falls over time it will continue to be reported at its original cost. 
D)  the requirement that when faced with uncertainty about the numbers to report, accountants must use the least optimistic measure.

Question 19

In a T-account, debits appear in what manner?

Accepted Answer

A)  They are on the left under assets but on the right under liabilities and stockholders' equity. 
B)  They are always listed on the right. 
C)  They are always listed on the left. 
D)  They are on the right under assets but on the left under liabilities and stockholders' equity. Debit is the left side of an account and credit is the right side of an account. 
A)  They are on the left under assets but on the right under liabilities and stockholders' equity. 
B)  They are always listed on the right. 
C)  They are always listed on the left. 
D)  They are on the right under assets but on the left under liabilities and stockholders' equity. Debit is the left side of an account and credit is the right side of an account.

Question 20

Which of the following would decrease stockholders' equity?

Accepted Answer

A)  Stock issued for cash. 
B)  Repayment of notes payable. 
C)  Land purchased for cash. 
D)  Dividends paid to owners. 
A)  Stock issued for cash. 
B)  Repayment of notes payable. 
C)  Land purchased for cash. 
D)  Dividends paid to owners.

Which of the following is NOT an asset?

A business is obliged to repay debt and equity financing.

What is the amount of current assets on the classified balance sheet?

Which line items on the balance sheet would be classified as long term?

A credit would make which of the following accounts decrease?

If the total dollar value of credits to an account exceeds the total dollar value of debits to that account, the ending balance of the account will be a debit balance.

Purrfect Pets, Inc., uses $10,000 in cash to pay $10,000 on Accounts Payable. This would result in a:

Which of the following is a FALSE statement?

The common characteristic possessed by all assets is

What would be the effect on the current ratio if the company paid $10,000 on its accounts payable?

A company signed an agreement to rent store space from another company. This is an example of a recordable transaction.

The amount of Total Current Assets that would be reported on the company's balance sheet at the end of the year would be

Each account is assigned a number and this listing of all accounts is called a

What is the amount of the total liabilities to be reported on the balance sheet?

A company purchases $23,000 of supplies in the current month and promises to pay for them next month. How would the company record a liability for the supplies?

Account names in the chart of accounts are:

The current ratio can be used to evaluate a company's ability to pay liabilities in the short -term, and in general, a lower ratio means better ability to pay.

Conservatism is

In a T-account, debits appear in what manner?

Which of the following would decrease stockholders' equity?

Business Decisions and Financial Accounting

Reporting Operating Results on the Income Statement

Adjustments, Financial Statements, and Financial Results

Financial Reporting and Analysis

Internal Control and Financial Reporting for Cash and Merchandise Sales

Reporting and Interpreting Inventories and Cost of Goods Sold

Reporting and Interpreting Receivables, Bad Debt Expense, and Interest Revenue

Reporting and Interpreting Long-Lived Tangible and Intangible Assets

Reporting and Interpreting Liabilities

Reporting and Interpreting Stockholders Equity

Reporting and Interpreting the Statement of Cash Flows

Measuring and Evaluating Financial Performance

Filters

Exam 2: Reporting Investing and Financing Results on the Balance Sheet

Which of the following is NOT an asset?

A business is obliged to repay debt and equity financing.

What is the amount of current assets on the classified balance sheet?

Which line items on the balance sheet would be classified as long term?

A credit would make which of the following accounts decrease?

If the total dollar value of credits to an account exceeds the total dollar value of debits to that account, the ending balance of the account will be a debit balance.

Purrfect Pets, Inc., uses $10,000 in cash to pay $10,000 on Accounts Payable. This would result in a:

Which of the following is a FALSE statement?

The common characteristic possessed by all assets is

What would be the effect on the current ratio if the company paid $10,000 on its accounts payable?

A company signed an agreement to rent store space from another company. This is an example of a recordable transaction.

The amount of Total Current Assets that would be reported on the company's balance sheet at the end of the year would be

Each account is assigned a number and this listing of all accounts is called a

What is the amount of the total liabilities to be reported on the balance sheet?

A company purchases $23,000 of supplies in the current month and promises to pay for them next month. How would the company record a liability for the supplies?

Account names in the chart of accounts are:

The current ratio can be used to evaluate a company's ability to pay liabilities in the short -term, and in general, a lower ratio means better ability to pay.

Conservatism is

In a T-account, debits appear in what manner?

Which of the following would decrease stockholders' equity?

Business Decisions and Financial Accounting

Reporting Operating Results on the Income Statement

Adjustments, Financial Statements, and Financial Results

Financial Reporting and Analysis

Internal Control and Financial Reporting for Cash and Merchandise Sales

Reporting and Interpreting Inventories and Cost of Goods Sold

Reporting and Interpreting Receivables, Bad Debt Expense, and Interest Revenue

Reporting and Interpreting Long-Lived Tangible and Intangible Assets

Reporting and Interpreting Liabilities

Reporting and Interpreting Stockholders Equity

Reporting and Interpreting the Statement of Cash Flows

Measuring and Evaluating Financial Performance

Filters