Question 1

Bonds generally have shorter terms and are for larger amounts than notes payable.

Accepted Answer

A) True 
 B)False

Question 2

Select the one term that best fits each definition
-An asset that does not have physical substance.

Accepted Answer

A)  accelerated depreciation 
B)  amortization 
C)  assessed value 
D)  declining-balance method of depreciation 
E)  double declining-balance method of depreciation
F) gain
G) gain on plant assets
H) intangible assets
I) loss
J) loss on plant assets
K) personal property
L) plant asset record
M) real property
N) return on investment (ROI) 
A)  accelerated depreciation 
B)  amortization 
C)  assessed value 
D)  declining-balance method of depreciation 
E)  double declining-balance method of depreciation
F) gain
G) gain on plant assets
H) intangible assets
I) loss
J) loss on plant assets
K) personal property
L) plant asset record
M) real property
N) return on investment (ROI)

Question 3

In periods of rising costs, the inventory method which gives the lowest possible ending inventory cost is the

Accepted Answer

A)  FIFO method. 
B)  LIFO method. 
C)  weighted-average method. 
D)  lower of cost or market inventory method. 
A)  FIFO method. 
B)  LIFO method. 
C)  weighted-average method. 
D)  lower of cost or market inventory method.

Question 4

Select the one term that best fits each definition
-Any method of depreciation which records greater depreciation expense in the early years and less depreciation expense in the later years.

Accepted Answer

A)  accelerated depreciation 
B)  amortization 
C)  assessed value 
D)  declining-balance method of depreciation 
E)  double declining-balance method of depreciation
F) gain
G) gain on plant assets
H) intangible assets
I) loss
J) loss on plant assets
K) personal property
L) plant asset record
M) real property
N) return on investment (ROI) 
A)  accelerated depreciation 
B)  amortization 
C)  assessed value 
D)  declining-balance method of depreciation 
E)  double declining-balance method of depreciation
F) gain
G) gain on plant assets
H) intangible assets
I) loss
J) loss on plant assets
K) personal property
L) plant asset record
M) real property
N) return on investment (ROI)

Question 5

Select the one term that best fits each definition
-An entry recording the receipt of cash before the related revenue is earned, or payment of cash before the related expense is incurred.

Accepted Answer

A)  accrual 
B)  accrued interest expense 
C)  accrued expenses 
D)  deferral 
E)  deferred expenses
F) deferred revenue
G) reversing entry 
A)  accrual 
B)  accrued interest expense 
C)  accrued expenses 
D)  deferral 
E)  deferred expenses
F) deferred revenue
G) reversing entry

Question 6

Unpaid dividends on preferred stock may have to be paid before common stockholders receive any dividends.

Accepted Answer

A) True 
 B)False

Question 7

Select the one term that best fits each definition
-A class of stock that gives preferred shareholders preference over common shareholders in dividends along with other rights.

Accepted Answer

A)  bond 
B)  bond issue 
C)  capital expenditure 
D)  collateral 
E)  cost of capital
F) debt financing
G) equity financing
H) financial leverage
I) interest expense
J) issue date
K) line of credit
L) non-operating expenses
M) par value
N) preferred stock
O) prime interest rate
P) revenue expenditure
Q) stated interest rate 
A)  bond 
B)  bond issue 
C)  capital expenditure 
D)  collateral 
E)  cost of capital
F) debt financing
G) equity financing
H) financial leverage
I) interest expense
J) issue date
K) line of credit
L) non-operating expenses
M) par value
N) preferred stock
O) prime interest rate
P) revenue expenditure
Q) stated interest rate

Question 8

Select the one term that best fits each definition
-A file of stock records for all merchandise on hand.

Accepted Answer

A)  first-in, first-out inventory costing method (FIFO) 
B)  gross profit method of estimating inventory 
C)  inventory record 
D)  last-in, first-out inventory costing method (LIFO) 
E)  lower of cost or market inventory costing method (LCM)
F) market value
G) stock ledger
H) stock record
I) weighted-average inventory costing method 
A)  first-in, first-out inventory costing method (FIFO) 
B)  gross profit method of estimating inventory 
C)  inventory record 
D)  last-in, first-out inventory costing method (LIFO) 
E)  lower of cost or market inventory costing method (LCM)
F) market value
G) stock ledger
H) stock record
I) weighted-average inventory costing method

Question 9

A merchandise inventory that is larger than needed may decrease net income.

Accepted Answer

A) True 
 B)False

Question 10

Select the one term that best fits each definition
-An increase in equity resulting from activity other than selling goods or services.

Accepted Answer

A)  accelerated depreciation 
B)  amortization 
C)  assessed value 
D)  declining-balance method of depreciation 
E)  double declining-balance method of depreciation
F) gain
G) gain on plant assets
H) intangible assets
I) loss
J) loss on plant assets
K) personal property
L) plant asset record
M) real property
N) return on investment (ROI) 
A)  accelerated depreciation 
B)  amortization 
C)  assessed value 
D)  declining-balance method of depreciation 
E)  double declining-balance method of depreciation
F) gain
G) gain on plant assets
H) intangible assets
I) loss
J) loss on plant assets
K) personal property
L) plant asset record
M) real property
N) return on investment (ROI)

Question 11

If Merchandise Inventory decreases from the beginning to the end of the fiscal period, the adjusting entry includes a debit to Income Summary.

Accepted Answer

A) True 
 B)False

Question 12

Select the one term that best fits each definition
-A declining-balance rate that is two times the straight-line rate.

Accepted Answer

A)  accelerated depreciation 
B)  amortization 
C)  assessed value 
D)  declining-balance method of depreciation 
E)  double declining-balance method of depreciation
F) gain
G) gain on plant assets
H) intangible assets
I) loss
J) loss on plant assets
K) personal property
L) plant asset record
M) real property
N) return on investment (ROI) 
A)  accelerated depreciation 
B)  amortization 
C)  assessed value 
D)  declining-balance method of depreciation 
E)  double declining-balance method of depreciation
F) gain
G) gain on plant assets
H) intangible assets
I) loss
J) loss on plant assets
K) personal property
L) plant asset record
M) real property
N) return on investment (ROI)

Question 13

The reversing entry for accrued interest expense would include a debit to

Accepted Answer

A)  Income Summary. 
B)  Interest Expense. 
C)  Interest Income. 
D)  Interest Payable. 
A)  Income Summary. 
B)  Interest Expense. 
C)  Interest Income. 
D)  Interest Payable.

Question 14

The reversing entry for accrued interest expense increases the balance of Interest Payable.

Accepted Answer

A) True 
 B)False

Question 15

Select the one term that best fits each definition
-Cash received for goods or services which have not yet been provided.

Accepted Answer

A)  accrual 
B)  accrued interest expense 
C)  accrued expenses 
D)  deferral 
E)  deferred expenses
F) deferred revenue
G) reversing entry 
A)  accrual 
B)  accrued interest expense 
C)  accrued expenses 
D)  deferral 
E)  deferred expenses
F) deferred revenue
G) reversing entry

Question 16

Select the one term that best fits each definition
-The amount that must be paid to replace an asset.

Accepted Answer

A)  first-in, first-out inventory costing method (FIFO) 
B)  gross profit method of estimating inventory 
C)  inventory record 
D)  last-in, first-out inventory costing method (LIFO) 
E)  lower of cost or market inventory costing method (LCM)
F) market value
G) stock ledger
H) stock record
I) weighted-average inventory costing method 
A)  first-in, first-out inventory costing method (FIFO) 
B)  gross profit method of estimating inventory 
C)  inventory record 
D)  last-in, first-out inventory costing method (LIFO) 
E)  lower of cost or market inventory costing method (LCM)
F) market value
G) stock ledger
H) stock record
I) weighted-average inventory costing method

Question 17

Select the one term that best fits each definition
-Estimating inventory by using the previous year's percentage of gross profit on operations.

Accepted Answer

A)  first-in, first-out inventory costing method (FIFO) 
B)  gross profit method of estimating inventory 
C)  inventory record 
D)  last-in, first-out inventory costing method (LIFO) 
E)  lower of cost or market inventory costing method (LCM)
F) market value
G) stock ledger
H) stock record
I) weighted-average inventory costing method 
A)  first-in, first-out inventory costing method (FIFO) 
B)  gross profit method of estimating inventory 
C)  inventory record 
D)  last-in, first-out inventory costing method (LIFO) 
E)  lower of cost or market inventory costing method (LCM)
F) market value
G) stock ledger
H) stock record
I) weighted-average inventory costing method

Question 18

The entry to journalize the adjusting entry for unearned rent revenue that has now been earned is

Accepted Answer

A)  debit Rent Income; credit Unearned Rent Income. 
B)  debit Unearned Rent Income; credit Income Summary. 
C)  debit Income Summary; credit Unearned Rent Income. 
D)  debit Unearned Rent Income; credit Rent Income. 
A)  debit Rent Income; credit Unearned Rent Income. 
B)  debit Unearned Rent Income; credit Income Summary. 
C)  debit Income Summary; credit Unearned Rent Income. 
D)  debit Unearned Rent Income; credit Rent Income.

Question 19

Paying cash dividends is an example of a financing activity.

Accepted Answer

A) True 
 B)False

Question 20

Select the one term that best fits each definition
-An entry recording revenue before the cash is received, or an expense before the cash is paid.

Accepted Answer

A)  accrual 
B)  accrued interest expense 
C)  accrued expenses 
D)  deferral 
E)  deferred expenses
F) deferred revenue
G) reversing entry 
A)  accrual 
B)  accrued interest expense 
C)  accrued expenses 
D)  deferral 
E)  deferred expenses
F) deferred revenue
G) reversing entry

Exam 18: Acquiring Capital for Growth and Development

Bonds generally have shorter terms and are for larger amounts than notes payable.

Select the one term that best fits each definition -An asset that does not have physical substance.

In periods of rising costs, the inventory method which gives the lowest possible ending inventory cost is the

Select the one term that best fits each definition -Any method of depreciation which records greater depreciation expense in the early years and less depreciation expense in the later years.

Select the one term that best fits each definition -An entry recording the receipt of cash before the related revenue is earned, or payment of cash before the related expense is incurred.

Unpaid dividends on preferred stock may have to be paid before common stockholders receive any dividends.

Select the one term that best fits each definition -A class of stock that gives preferred shareholders preference over common shareholders in dividends along with other rights.

Select the one term that best fits each definition -A file of stock records for all merchandise on hand.

A merchandise inventory that is larger than needed may decrease net income.

Select the one term that best fits each definition -An increase in equity resulting from activity other than selling goods or services.

If Merchandise Inventory decreases from the beginning to the end of the fiscal period, the adjusting entry includes a debit to Income Summary.

Select the one term that best fits each definition -A declining-balance rate that is two times the straight-line rate.

The reversing entry for accrued interest expense would include a debit to

The reversing entry for accrued interest expense increases the balance of Interest Payable.

Select the one term that best fits each definition -Cash received for goods or services which have not yet been provided.

Select the one term that best fits each definition -The amount that must be paid to replace an asset.

Select the one term that best fits each definition -Estimating inventory by using the previous year's percentage of gross profit on operations.

The entry to journalize the adjusting entry for unearned rent revenue that has now been earned is

Paying cash dividends is an example of a financing activity.

Select the one term that best fits each definition -An entry recording revenue before the cash is received, or an expense before the cash is paid.

The Accounting Equation

Debit and Credit Parts

Journalizing Transactions

Posting to a General Ledger

Cash Control Systems

Work Sheet and Adjusting Entries

Financial Statements for a Proprietorship

Closing Entries and Post-Closing

Accounting for Purchases and Cash Payments

Accounting for Sales and Cash Receipts

Using a General Journal

Preparing Payroll Records

Accounting for Payroll and Payroll Taxes

Uncollectible Accounts Receivable

Adjusting Entries and a Trial Balance

Financial Statements and Closing Entries

Financial Statement Analysis

Plant Assets and Intangible Assets

Accounting for Inventory

Accruals, Deferrals, and Reversing Entries

End-Of-Fiscal-Period Work for a Corporation

Accounting for Partnerships

Recording International and Internet Sales

Service Business Organized As a Proprietorship

Merchandising Business As a Corporation

Additional Accounting Procedures

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