Question 1

Because of the modifying convention of ____________________, assets are understated rather than overstated if any uncertainty exists.

Accepted Answer

The answer of Because of the modifying convention of ____________________,...

Question 2

creditemployees during the last four days of the year, even though the wages will not be paid in that year. The accountant is following the ____________________ principle.

Accepted Answer

The answer of creditemployees during the last four days of...

Question 3

Match the accounting terms with the descriptions by entering the proper number.

Accepted Answer

The answer of Match the accounting terms with the descriptions...

Question 4

When Tamar Snyder opened a shoe store, her accountant did not include the cash in her personal savings account as one of the assets of the business. This is an example of

Accepted Answer

A)  the separate entity assumption. 
B)  the conservatism principle. 
C)  the materiality principle. 
D)  industry practice principle. 
A)  the separate entity assumption. 
B)  the conservatism principle. 
C)  the materiality principle. 
D)  industry practice principle.

Question 5

Keeping the personal assets of the owner of a business separate from the assets of the firm is an example of

Accepted Answer

A)  following the going concern assumption. 
B)  applying the realization principle. 
C)  following the separate entity assumption. 
D)  applying the conservatism convention. 
A)  following the going concern assumption. 
B)  applying the realization principle. 
C)  following the separate entity assumption. 
D)  applying the conservatism convention.

Question 6

In order to ensure that they are meaningful and useful, financial statements should be prepared

Accepted Answer

A)  in accordance with section 108 of the Sarbanes-Oxley Act. 
B)  on a daily basis. 
C)  on a timely basis. 
D)  using generally accepted accounting principles (GAAP). 
A)  in accordance with section 108 of the Sarbanes-Oxley Act. 
B)  on a daily basis. 
C)  on a timely basis. 
D)  using generally accepted accounting principles (GAAP).

Question 7

The ____________________ basis of accounting means that business transactions are recorded based on an "arm's length" transaction in the market.

Accepted Answer

The answer of The ____________________ basis of accounting means that...

Question 8

What is meant by the concept of neutrality in accounting?

Accepted Answer

Neutrality means that the stat

Question 9

Depreciating equipment over its useful life is an example of

Accepted Answer

A)  following the objectivity assumption. 
B)  applying the matching principle. 
C)  applying the realization principle. 
D)  applying the conservatism convention. 
A)  following the objectivity assumption. 
B)  applying the matching principle. 
C)  applying the realization principle. 
D)  applying the conservatism convention.

Question 10

Holly Day Company purchased a piece of land 10 years ago for $50,000. Holly Day company is considering selling the land. The piece of land was recently appraised for $120,000, they received an offer from a prospective buyer for $105,000, and a similar piece of land 5 block away recently sold for $113,000. How much should Holly Day Company report on its balance sheet for the piece of land?

Accepted Answer

A)  $120,000 
B)  $50,000 
C)  $113,000 
D)  $105,000 
A)  $120,000 
B)  $50,000 
C)  $113,000 
D)  $105,000

Question 11

If the ____________________ basis of accounting is used, income is recorded in the period in which it is earned.

Accepted Answer

The answer of If the ____________________ basis of accounting is...

Question 12

An accountant charged the Repairs Expense account for a tool that cost $12. The tool had an estimated useful life of 5 years; however, the accountant did not choose to depreciate it. The modifying convention that the accountant followed was

Accepted Answer

A)  materiality. 
B)  objectivity. 
C)  conservatism. 
D)  industry practice. 
A)  materiality. 
B)  objectivity. 
C)  conservatism. 
D)  industry practice.

Question 13

What two tests must be met in order for revenues to be recognized?

Accepted Answer

Revenues must have b

Question 14

Hour Place Clock Repair paid $2,400 cash in advance for a six month advertising contract with the local newspaper. According to the matching principle, if 2 months of the contract has expired by the end of the current fiscal year, how much should Hour Place Clock Repair report as Advertising Expense on the Income Statement?

Accepted Answer

A)  $0 
B)  $400 
C)  $800 
D)  $2,400 
A)  $0 
B)  $400 
C)  $800 
D)  $2,400

Question 15

Antonio Hanley owns a small automobile service center. He recently approached the local bank for a loan to finance an expansion of his service center. Antonio prepared the balance sheet given below and submitted it with his loan application. The balance sheet does not conform to generally accepted accounting principles. Using the additional information provided by the owner, prepare a corrected balance sheet in accordance with generally accepted accounting principles.   $$\begin{array}{l}
\text { Liabilities and Owner's Equity }\
\begin{array} { l r } 
\text { Accounts Payable } & 46,000 \
\text { Note Payable on Family Car } & 18,000 \
\text { Note Payable on Truck } & 12,000 \
\text { Mortgage on House } & 254,000 \
\text { Antonio Hanley, Capital } & \underline { 268,000 } \
\text { Total Liabilities and Owner's Equity } & \underline { \underline { 598,000 } }
\end{array}
\end{array}$$ Additional information provided by owner:
1. The inventory has an original cost of $\$ 84,000$. It is listed on the balance sheet at what it would cost to purchase today.
2. Included in the cash listed on the balance sheet is $\$ 8,000$ in Antonio Hanley's personal checking account.
3. Depreciation allowable to date on the equipment is $\$ 10,000$. Depreciation allowable to date on the truck is $\$ 6,000$.

Accepted Answer

The answer of Antonio Hanley owns a small automobile service...

Question 16

How are the concepts of materiality and cost-benefit related?

Accepted Answer

If an item is immaterial, there is less

Question 17

An accountant who records revenue when a credit sale is made rather than waiting for the receipt of cash from the customer is

Accepted Answer

A)  following the accrual principle. 
B)  following the conservatism convention. 
C)  violating generally accepted accounting principles. 
D)  following the consistency principle. 
A)  following the accrual principle. 
B)  following the conservatism convention. 
C)  violating generally accepted accounting principles. 
D)  following the consistency principle.

Question 18

Financial report users need information about

Accepted Answer

A)  profits. 
B)  economic resources (assets). 
C)  claims against the assets (liabilities and owner's equity). 
D)  All of the above. 
A)  profits. 
B)  economic resources (assets). 
C)  claims against the assets (liabilities and owner's equity). 
D)  All of the above.

Question 19

When a new company was formed, one partner contributed some used equipment he owned. The equipment was appraised at $44,000 and $50,000 by two different dealers. The accountant entered the equipment at $44,000 in the financial records of the partnership. This is an example of

Accepted Answer

A)  the materiality principle. 
B)  the conservatism principle. 
C)  the matching principle. 
D)  industry practice principle. 
A)  the materiality principle. 
B)  the conservatism principle. 
C)  the matching principle. 
D)  industry practice principle.

Question 20

Assets are carried on the books at historical cost.

Accepted Answer

A) True 
 B)False

Because of the modifying convention of ____________________, assets are understated rather than overstated if any uncertainty exists.

creditemployees during the last four days of the year, even though the wages will not be paid in that year. The accountant is following the ____________________ principle.

Match the accounting terms with the descriptions by entering the proper number.

When Tamar Snyder opened a shoe store, her accountant did not include the cash in her personal savings account as one of the assets of the business. This is an example of

Keeping the personal assets of the owner of a business separate from the assets of the firm is an example of

In order to ensure that they are meaningful and useful, financial statements should be prepared

The ____________________ basis of accounting means that business transactions are recorded based on an "arm's length" transaction in the market.

What is meant by the concept of neutrality in accounting?

Depreciating equipment over its useful life is an example of

If the ____________________ basis of accounting is used, income is recorded in the period in which it is earned.

An accountant charged the Repairs Expense account for a tool that cost $12. The tool had an estimated useful life of 5 years; however, the accountant did not choose to depreciate it. The modifying convention that the accountant followed was

What two tests must be met in order for revenues to be recognized?

How are the concepts of materiality and cost-benefit related?

An accountant who records revenue when a credit sale is made rather than waiting for the receipt of cash from the customer is

Financial report users need information about

When a new company was formed, one partner contributed some used equipment he owned. The equipment was appraised at $44,000 and $50,000 by two different dealers. The accountant entered the equipment at $44,000 in the financial records of the partnership. This is an example of

Assets are carried on the books at historical cost.

Accounting: the Language of Business

Analyzing Business Transactions

Analyzing Business Transactions Using T Accounts

The General Journal and the General Ledger

Adjustments and the Worksheet

Closing Entries and the Postclosing Trial Balance

Accounting for Sales and Accounts Receivable

Accounting for Purchases and Accounts Payable

Cash Receipts, Cash Payments, and Banking Procedures

Payroll Computations, Records, and Payment

Payroll Taxes, Deposits, and Reports

Accruals, Deferrals, and the Worksheet

Financial Statements and Closing Procedures

Accounts Receivable and Uncollectible Accounts

Filters

Exam 14: Accounting Principles and Reporting Standards

Because of the modifying convention of ____________________, assets are understated rather than overstated if any uncertainty exists.

creditemployees during the last four days of the year, even though the wages will not be paid in that year. The accountant is following the ____________________ principle.

Match the accounting terms with the descriptions by entering the proper number.

When Tamar Snyder opened a shoe store, her accountant did not include the cash in her personal savings account as one of the assets of the business. This is an example of

Keeping the personal assets of the owner of a business separate from the assets of the firm is an example of

In order to ensure that they are meaningful and useful, financial statements should be prepared

The ____________________ basis of accounting means that business transactions are recorded based on an "arm's length" transaction in the market.

What is meant by the concept of neutrality in accounting?

Depreciating equipment over its useful life is an example of

If the ____________________ basis of accounting is used, income is recorded in the period in which it is earned.

An accountant charged the Repairs Expense account for a tool that cost $12. The tool had an estimated useful life of 5 years; however, the accountant did not choose to depreciate it. The modifying convention that the accountant followed was

What two tests must be met in order for revenues to be recognized?

How are the concepts of materiality and cost-benefit related?

An accountant who records revenue when a credit sale is made rather than waiting for the receipt of cash from the customer is

Financial report users need information about

When a new company was formed, one partner contributed some used equipment he owned. The equipment was appraised at $44,000 and $50,000 by two different dealers. The accountant entered the equipment at $44,000 in the financial records of the partnership. This is an example of

Assets are carried on the books at historical cost.

Accounting: the Language of Business

Analyzing Business Transactions

Analyzing Business Transactions Using T Accounts

The General Journal and the General Ledger

Adjustments and the Worksheet

Closing Entries and the Postclosing Trial Balance

Accounting for Sales and Accounts Receivable

Accounting for Purchases and Accounts Payable

Cash Receipts, Cash Payments, and Banking Procedures

Payroll Computations, Records, and Payment

Payroll Taxes, Deposits, and Reports

Accruals, Deferrals, and the Worksheet

Financial Statements and Closing Procedures

Accounts Receivable and Uncollectible Accounts

Filters