Question 1

Which of the following is an example of an obvious financial reporting fraud as discussed in the text?

Accepted Answer

A) Closing the books at the end of the reporting period. 
B) Transferring assets to an affiliate at more than their actual value. 
C) Recording as expenses expenditures that should have been classified as expenses. 
D) Recording a liability when title to merchandise passes to the purchaser. 
A) Closing the books at the end of the reporting period. 
B) Transferring assets to an affiliate at more than their actual value. 
C) Recording as expenses expenditures that should have been classified as expenses. 
D) Recording a liability when title to merchandise passes to the purchaser. B

Question 2

What type of information does the general journal include for each transaction?

Accepted Answer

The entries in a general journal include the following information about each transaction:
$\bold{Date:}$ The year appears on the first line of the first column,the month on the next line of the first column,and the day in the second column opposite the month.For subsequent entries on the same page for the same month and year,the month and year can be omitted.
$\bold{Accounts:}$ The names of the accounts debited and credited appear in the Description column.The names of the accounts that are debited are placed next to the left margin opposite the dates;on the line below,the names of the accounts credited are indented.
$\bold{Amounts:}$ The debit amounts appear in the Debit column opposite the accounts that are debited,and the credit amounts appear in the Credit column opposite the accounts credited.
$\bold{Explanation:}$ An explanation of each transaction appears in the Description column below the account names. An explanation should be brief but sufficient to identify the transaction.
$\bold{Account numbers:}$ The account numbers appear in the Post. Ref. (posting reference) column, if they apply.

Question 3

Mesquite,Inc.engaged in the following transactions during October:   
-What is the balance in cash after these transactions?

Accepted Answer

A) $940 
B) $1,140 
C) $740 
D) $2,440 
A) $940 
B) $1,140 
C) $740 
D) $2,440 B

Question 4

The trial balance for Parker Company is as follows:   If the trial balance showed a balance of $8,000 in the Wages Expense account and a balance of $85,000 in the Advertising Fees Earned account,what would be the amount of the Dividends account?

Accepted Answer

A) $75,000 
B) $53,000 
C) $35,000 
D) $63,000 
A) $75,000 
B) $53,000 
C) $35,000 
D) $63,000

Question 5

Another name for the ledger is the book of original entry.

Accepted Answer

A) True 
 B)False

Question 6

The trial balance for Parker Company is as follows:   If the trial balance showed a balance of $16,000 in the Wages Expense account and a balance of $86,000 in the Advertising Fees Earned account,what would be the amount of A?

Accepted Answer

A) $126,000 
B) $106,000 
C) $136,000 
D) $116,000 
A) $126,000 
B) $106,000 
C) $136,000 
D) $116,000

Question 7

Provide explanations for the following related journal entries:

Accepted Answer

a.Made advance payment of rent.
b.Issued

Question 8

Which of the following is not a measurement issue in accounting?

Accepted Answer

A) When to record a business transaction. 
B) How to classify the items of a business transaction. 
C) When to classify the items of a business transaction. 
D) Where to record a business transaction. 
A) When to record a business transaction. 
B) How to classify the items of a business transaction. 
C) When to classify the items of a business transaction. 
D) Where to record a business transaction.

Question 9

Posting is performed by transferring information from the

Accepted Answer

A) source documents to the journal. 
B) source documents to the ledger. 
C) journal to the ledger. 
D) ledger to the journal. 
A) source documents to the journal. 
B) source documents to the ledger. 
C) journal to the ledger. 
D) ledger to the journal.

Question 10

Which of the following business events is not a transaction?

Accepted Answer

A) Signing a contract. 
B) Paying wages. 
C) Receiving goods. 
D) Purchasing a service. 
A) Signing a contract. 
B) Paying wages. 
C) Receiving goods. 
D) Purchasing a service.

Question 11

Which of the following is a business event that is not considered a recordable transaction?

Accepted Answer

A) A company receives a product previously ordered. 
B) A company pays an employee for work performed. 
C) A customer inquires about the availability of a service. 
D) A customer purchases a service. 
A) A company receives a product previously ordered. 
B) A company pays an employee for work performed. 
C) A customer inquires about the availability of a service. 
D) A customer purchases a service.

Question 12

Copper Company engaged in the following transactions during April 
 
-What is the amount of cash still to be collected?

Accepted Answer

A) $126,000 
B) $341,000 
C) $144,000 
D) $18,000 
A) $126,000 
B) $341,000 
C) $144,000 
D) $18,000

Question 13

Using the following transactions,calculate the ending balance of (A)total assets, (B)total liabilities, (C)Cash,and (D)Stockholders' Equity.Indicate whether each balance is debit or credit.
a.Began doing business by selling shares of common stock to investors for $72,000 in cash.
b.Paid one year's insurance in advance,$4,800.
c.Billed customers for services rendered,$12,000.
d.Received utility bill,to be paid next month,$800.
e.Received $1,600 in advance of performing a service.
f.Received $8,800 from customers billed in c.
g.Paid $600 on the utility bill of d.
h.Dividends of $4,000 were paid to common stock holders.

Accepted Answer

a.$81,000 debit ($72,000 + $12,000 + $1,

Question 14

A journal entry is a notation that records a single transaction in the chronological accounting record known as the book of original entry.

Accepted Answer

A) True 
 B)False

Question 15

Which pair of accounts follows the rules of debit and credit in the opposite manner?

Accepted Answer

A) Prepaid Insurance and Dividends 
B) Advertising Expense and Land 
C) Dividends and Service Revenue 
D) Interest Payable and Common Stock 
A) Prepaid Insurance and Dividends 
B) Advertising Expense and Land 
C) Dividends and Service Revenue 
D) Interest Payable and Common Stock

Question 16

Copper Company engaged in the following transactions during April 
 
-What is the amount of cash still to be paid?

Accepted Answer

A) $18,000 
B) $47,000 
C) $94,000 
D) $52,000 
A) $18,000 
B) $47,000 
C) $94,000 
D) $52,000

Question 17

When a company has performed a service but has not yet received payment,what is the required journal entry to be recorded?

Accepted Answer

A) Accounts Receivable - Debit;Service Revenue - Credit 
B) Service Revenue - Debit;Accounts Payable - Credit. 
C) Service Revenue - Debit;Accounts Receivable - Credit 
D) No entry is required until the cash is received. 
A) Accounts Receivable - Debit;Service Revenue - Credit 
B) Service Revenue - Debit;Accounts Payable - Credit. 
C) Service Revenue - Debit;Accounts Receivable - Credit 
D) No entry is required until the cash is received.

Question 18

Mesquite,Inc.engaged in the following transactions during October:   
-What is the amount of cash still to be paid?

Accepted Answer

A) $2,300 
B) $2,100 
C) $1,300 
D) $400 
A) $2,300 
B) $2,100 
C) $1,300 
D) $400

Question 19

The cost principle relates most closely to the

Accepted Answer

A) recognition point. 
B) recognition issue. 
C) valuation issue. 
D) classification issue. 
A) recognition point. 
B) recognition issue. 
C) valuation issue. 
D) classification issue.

Question 20

Which of the following errors will cause the trial balance to be out of balance?

Accepted Answer

A) An entire transaction was entered in the general journal as $27 instead of $72. 
B) An entire transaction was omitted from the general journal. 
C) The balance of an account was incorrectly computed. 
D) A debit entry was entered in the wrong debit account. 
A) An entire transaction was entered in the general journal as $27 instead of $72. 
B) An entire transaction was omitted from the general journal. 
C) The balance of an account was incorrectly computed. 
D) A debit entry was entered in the wrong debit account.

Exam 2: Measurement Concepts: Recording Business Transactions

Which of the following is an example of an obvious financial reporting fraud as discussed in the text?

What type of information does the general journal include for each transaction?

Mesquite,Inc.engaged in the following transactions during October: -What is the balance in cash after these transactions?

The trial balance for Parker Company is as follows: If the trial balance showed a balance of $8,000 in the Wages Expense account and a balance of $85,000 in the Advertising Fees Earned account,what would be the amount of the Dividends account?

Another name for the ledger is the book of original entry.

The trial balance for Parker Company is as follows: If the trial balance showed a balance of $16,000 in the Wages Expense account and a balance of $86,000 in the Advertising Fees Earned account,what would be the amount of A?

Provide explanations for the following related journal entries:

Which of the following is not a measurement issue in accounting?

Posting is performed by transferring information from the

Which of the following business events is not a transaction?

Which of the following is a business event that is not considered a recordable transaction?

Copper Company engaged in the following transactions during April -What is the amount of cash still to be collected?

A journal entry is a notation that records a single transaction in the chronological accounting record known as the book of original entry.

Which pair of accounts follows the rules of debit and credit in the opposite manner?

Copper Company engaged in the following transactions during April -What is the amount of cash still to be paid?

When a company has performed a service but has not yet received payment,what is the required journal entry to be recorded?

Mesquite,Inc.engaged in the following transactions during October: -What is the amount of cash still to be paid?

The cost principle relates most closely to the

Which of the following errors will cause the trial balance to be out of balance?

Uses of Accounting Information and the Financial Statements

Measuring Business Income: Adjusting the Accounts

Foundations of Financial Reporting and the Classified Balance Sheet

Accounting for Merchandising Operations

Inventories

Cash and Internal Control

Receivables

Long-Term Assets

Current Liabilities and Fair Value Accounting

Long-Term Liabilities

Stockholders Equity

The Statement of Cash Flows

Financial Statement Analysis

Managerial Accounting and Cost Concepts

Costing Systems: Job Order Costing

Costing Systems: Process Costing

Value-Based Systems: Activity-Based Costing and Lean Accounting

Cost-Volume-Profit Analysis

The Budgeting Process

Flexible Budgets and Performance Analysis

Standard Costing and Variance Analysis

Short-Run Decision Analysis

Capital Investment Analysis

Pricing Decisions, including Target Costing and Transfer Pricing

Quality Management and Measurement

Accounting for Unincorporated Businesses

Accounting for Investments

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