Question 1

What is the trial balance used to verify?

Accepted Answer

A)  Sum of debit entries = Sum of credit entries 
B)  Sum of debit entries  Sum of credit entries 
D)  None of these. 
A)  Sum of debit entries = Sum of credit entries 
B)  Sum of debit entries  Sum of credit entries 
D)  None of these. A

Question 2

The income statement impact on the statement of cash flows is through revenues and expenses collected or paid during the year.

Accepted Answer

A) True 
 B)False  True

Question 3

The term 'credit' is synonymous with 'increase'.

Accepted Answer

A) True 
 B)False  False

Question 4

What is the process of transferring entries from the journal to the ledger called?

Accepted Answer

A)  Journalizing 
B)  Posting 
C)  Recording 
D)  Accounting 
A)  Journalizing 
B)  Posting 
C)  Recording 
D)  Accounting

Question 5

The income statement offers a dynamic vision of the financial position of the firm.

Accepted Answer

A) True 
 B)False

Question 6

The statement of financial position/balance sheet emphasizes the dynamics of the cash flowing in and out of the business.

Accepted Answer

A) True 
 B)False

Question 7

The need for a statement of cash flows arises from:

Accepted Answer

A)  Cash accounting 
B)  Accrual accounting. 
C)  International accounting. 
D)  None of these. 
A)  Cash accounting 
B)  Accrual accounting. 
C)  International accounting. 
D)  None of these.

Question 8

Which of the following equations is correct?

Accepted Answer

A)  Using balance sheet accounts:
Sum of debit balances - Sum of credit balances = Net income 
B)  Using trial balance accounts:
Sum of debit balances = Sum of credit balances 
C)  Using income statement accounts:
Sum of credit balances - Sum of debit balances = Net income 
D)  All of these. 
A)  Using balance sheet accounts:
Sum of debit balances - Sum of credit balances = Net income 
B)  Using trial balance accounts:
Sum of debit balances = Sum of credit balances 
C)  Using income statement accounts:
Sum of credit balances - Sum of debit balances = Net income 
D)  All of these.

Question 9

Proponents of using national standardized charts of accounts argue that:

Accepted Answer

A)  It facilitates the mobility of qualified accountants since all firms use the same basic structure. 
B)  It facilitates inter-company comparability of published accounts. 
C)  It reduces the cost of designing accounting software packages. 
D)  All of these. 
A)  It facilitates the mobility of qualified accountants since all firms use the same basic structure. 
B)  It facilitates inter-company comparability of published accounts. 
C)  It reduces the cost of designing accounting software packages. 
D)  All of these.

Question 10

Which of the following statements is true?

Accepted Answer

A)  The statement of financial position/balance sheet,the income statement and the statement of cash flows are totally linked. 
B)  There are links only between the statement of financial position/balance sheet and statement of cash flows. 
C)  There is no link between the statement of financial position/balance sheet,the income statement and the statement of cash flows. 
D)  There are links only between the income statement and the statement of cash flows. 
A)  The statement of financial position/balance sheet,the income statement and the statement of cash flows are totally linked. 
B)  There are links only between the statement of financial position/balance sheet and statement of cash flows. 
C)  There is no link between the statement of financial position/balance sheet,the income statement and the statement of cash flows. 
D)  There are links only between the income statement and the statement of cash flows.

Question 11

Alf sells merchandise on credit to Bob for 100 CU.How will the transaction be recorded in Bob's accounting records?

Accepted Answer

A)  Purchases of merchandise => Credit : 100
Supplier Alf => Debit : 100 
B)  Purchases of merchandise => Credit : 100
Supplier Alf => Credit : 100 
C)  Purchases of merchandise => Debit : 100
Supplier Alf => Debit : 100 
D)  Purchases of merchandise => Debit : 100
Supplier Alf = >Credit : 100 
A)  Purchases of merchandise => Credit : 100
Supplier Alf => Debit : 100 
B)  Purchases of merchandise => Credit : 100
Supplier Alf => Credit : 100 
C)  Purchases of merchandise => Debit : 100
Supplier Alf => Debit : 100 
D)  Purchases of merchandise => Debit : 100
Supplier Alf = >Credit : 100

Question 12

Which of the following statements is true?

Accepted Answer

A)  The accounts kept by a company constitute legal evidence,must be easily accessible to controllers and comply with laws and regulations. 
B)  The accounts kept by a company are a source of management information. 
C)  The accounts kept by a company are an instrument for business management. 
D)  All of these. 
A)  The accounts kept by a company constitute legal evidence,must be easily accessible to controllers and comply with laws and regulations. 
B)  The accounts kept by a company are a source of management information. 
C)  The accounts kept by a company are an instrument for business management. 
D)  All of these.

Question 13

The accounting process relies only on the use of technical tools and does not require human intervention and interpretation.

Accepted Answer

A) True 
 B)False

Question 14

Where no specific document exists for a transaction the operation is classified as:

Accepted Answer

A)  Miscellaneous. 
B)  Insignificant. 
C)  Immaterial. 
D)  None of these. 
A)  Miscellaneous. 
B)  Insignificant. 
C)  Immaterial. 
D)  None of these.

Question 15

By convention,the left-hand side of a T-account is called:

Accepted Answer

A)  Debt side 
B)  Cash side 
C)  Debit side 
D)  Credit side 
A)  Debt side 
B)  Cash side 
C)  Debit side 
D)  Credit side

Question 16

Which of the following statements is true?

Accepted Answer

A)  If you decrease an asset account,you could decrease a liability account. 
B)  If you increase a liability account,you could increase a shareholders' equity account. 
C)  If you increase an asset account,you could increase another asset account. 
D)  All of these. 
A)  If you decrease an asset account,you could decrease a liability account. 
B)  If you increase a liability account,you could increase a shareholders' equity account. 
C)  If you increase an asset account,you could increase another asset account. 
D)  All of these.

Question 17

Which of the following accounts is expected to present a credit balance?

Accepted Answer

A)  Accounts receivable 
B)  Provision for doubtful debts 
C)  Doubtful debt accounts 
D)  Selling expenses 
A)  Accounts receivable 
B)  Provision for doubtful debts 
C)  Doubtful debt accounts 
D)  Selling expenses

Question 18

All over the world,the overall structure of the accounts code is left entirely up to company management.

Accepted Answer

A) True 
 B)False

Question 19

On a statement of financial position/balance sheet the total of debit balances equals the total of credit balances.

Accepted Answer

A) True 
 B)False

Question 20

Repaying the principal of a debt will generate a cash outflow.

Accepted Answer

A) True 
 B)False

What is the trial balance used to verify?

The income statement impact on the statement of cash flows is through revenues and expenses collected or paid during the year.

The term 'credit' is synonymous with 'increase'.

What is the process of transferring entries from the journal to the ledger called?

The income statement offers a dynamic vision of the financial position of the firm.

The statement of financial position/balance sheet emphasizes the dynamics of the cash flowing in and out of the business.

The need for a statement of cash flows arises from:

Which of the following equations is correct?

Proponents of using national standardized charts of accounts argue that:

Which of the following statements is true?

Alf sells merchandise on credit to Bob for 100 CU.How will the transaction be recorded in Bob's accounting records?

Which of the following statements is true?

The accounting process relies only on the use of technical tools and does not require human intervention and interpretation.

Where no specific document exists for a transaction the operation is classified as:

By convention,the left-hand side of a T-account is called:

Which of the following statements is true?

Which of the following accounts is expected to present a credit balance?

All over the world,the overall structure of the accounts code is left entirely up to company management.

On a statement of financial position/balance sheet the total of debit balances equals the total of credit balances.

Repaying the principal of a debt will generate a cash outflow.

Accounting: the Language of Business

Introduction to Financial Statements

Accounting Principles and End-Of-Period Adjustments

Regulation of Accounting and Financial Reporting

Revenue Recognition Issues

Tangible Fixed Assets

Intangible Assets

Inventories

Financial Instruments in the Statement of Financial Position and Fair Value Accounting

Shareholders Equity

Liabilities and Provisions

Business Combinations

Income Statement Analysis

Balance Sheet Analysis

Statement of Cash Flows Construction

Statement of Cash Flows Analysis and Earnings Quality

Ratio Analysis, financial Analysis and Beyond

Filters

Exam 3: Financial Statements: Interrelations and Construction

What is the trial balance used to verify?

The income statement impact on the statement of cash flows is through revenues and expenses collected or paid during the year.

The term 'credit' is synonymous with 'increase'.

What is the process of transferring entries from the journal to the ledger called?

The income statement offers a dynamic vision of the financial position of the firm.

The statement of financial position/balance sheet emphasizes the dynamics of the cash flowing in and out of the business.

The need for a statement of cash flows arises from:

Which of the following equations is correct?

Proponents of using national standardized charts of accounts argue that:

Which of the following statements is true?

Alf sells merchandise on credit to Bob for 100 CU.How will the transaction be recorded in Bob's accounting records?

Which of the following statements is true?

The accounting process relies only on the use of technical tools and does not require human intervention and interpretation.

Where no specific document exists for a transaction the operation is classified as:

By convention,the left-hand side of a T-account is called:

Which of the following statements is true?

Which of the following accounts is expected to present a credit balance?

All over the world,the overall structure of the accounts code is left entirely up to company management.

On a statement of financial position/balance sheet the total of debit balances equals the total of credit balances.

Repaying the principal of a debt will generate a cash outflow.

Accounting: the Language of Business

Introduction to Financial Statements

Accounting Principles and End-Of-Period Adjustments

Regulation of Accounting and Financial Reporting

Revenue Recognition Issues

Tangible Fixed Assets

Intangible Assets

Inventories

Financial Instruments in the Statement of Financial Position and Fair Value Accounting

Shareholders Equity

Liabilities and Provisions

Business Combinations

Income Statement Analysis

Balance Sheet Analysis

Statement of Cash Flows Construction

Statement of Cash Flows Analysis and Earnings Quality

Ratio Analysis, financial Analysis and Beyond

Filters