Financial accounting test 1 review
Revenues are: A. Increase in paid-in capital resulting from the owners investing in the business. B. Increases in retained earnings resulting from selling products or performing services C. Decreases in Liabilities resulting from paying off loans. D. All of the above
B.
The accounting equation can be expressed as- A. Equity-Assets= Liabilities B. Assets-Liabilities= Equity C. Assets=liabilities-Equity D. Assets+Liabilities=Equity
B.
The financial statement that reports revenues and expenses is called the- A. Balance sheet B. Income Statement c. Statement of Cashflows D. Statement of retained earnings
B.
The journal entry to record the acquisition of land and a building by issuing common stock A. debits land, building, and common stock B. debits Land and Building and credits Common Stock C. debits Common Stock and credits Land and Building D. debits Land and credits Common Stock
B.
The journal entry to record the purchase of supplies on an account A. credits Supplies and debits Cash B. debits Supplies and credits Accounts Payable C. credits Supplies and debits Accounts Payable D. debits Supplies Expense and credits Supplies
B.
The primary objective of financial reporting is to provide information- A. To the federal government B. Useful for making investment and credit decisions C. On the cash flows of the company d. About the profitability of the enterprise
B.
Thorpe corporation purchases a new delivery truck and signs a note payable at the truck dealership for the total cost. The impact of this transaction on Thorpe Corporation: A. Increases assets and decreases stockholders' equity B. Increases assets and increases liabilities C. Decreases assets and increases liabilities D. Increases assets and increases stockholder's equity
B.
To be useful, information must have which of the following fundamental qualitative characteristics? A. Timeliness and affordability B. Relevance and faithful representation C. Faithful representation and diversity D. Expediency and relevance
B.
Which statement is false? A. A trial balance can verify the equality of debits and credits B. A trial balance is the same as a balance sheet C. A trial balance lists and the accounts with their current balances D. a Trial balance can be taken at any time
B.
Which type of business organization provides the least amount of protection for bankers and other creditors of the company? A. Partnership B. Corporation C. Proprietorship D. Both a and c
B.
performing a service on account will A. increase total assets B. increase stockholders' equity C. increase total liabilities D. accomplish both a and b
D.
During February, assets increased by $82,000, and liabilities increased by $22,000. Equity must have- A. Increased by $60,000 B Decreased by $60,000 C. Decreased by $104,000 D. Increased by $104,000
A.
Identify the asset from the following list of accounts: A. Inventory B. Notes payable C. Common stock D. Retained earnings
A.
If a corporation purchases a delivery van for $35,000 cash, the net impact of this transaction will be A. no impact on total assets B. An increase in both assets and liabilities of $35,000 C. a decrease in total assets of $35,000 D. an increase in total assets of $35,000
A.
Perfect plate company has current assets of $65,000 and long-term assets of $85,000. Its total liabilities equal $55,000. Stockholders' equity is: A. $95,000 B. $205,000 C. $140,000 D. $150,000
A.
Prairie corporation holds cash of $7,000 and owes $31,000 on accounts payable. Prairie has accounts receivable of $30,000 , Inventory of $30,000 , and land that cost $50,000. How much are Prairie's total assets and Liabilities? A. Assets: $117,000 Liabilities $31,000 B. Assets: $117,000 Liabilities $61,000 C. Assets: $67,000 Liabilities $81,000 D. Assets: $87,000 Liabilities $61,000
A.
Receiving cash from a customer on account will A. have no effect on total assets B. Increase total assets C. decrease liabilities D. increase stockholders' equity
A.
The stockholders' equity of Chernasty company t the beginning and end of 2018 totaled $126,000 and $130,000, resprctively. Assets at the beginning of 2018 were $146,000. If the liabilities of Chernasky Company increases by $64,000 in 2018, how much were total assets at the end of 2018? A. $214,000 B. $78,000 C. $210,000 D. $212,000
A.
What is the effect on total assets and stockholders' equity of paying the telephone bill as soon as it is received each month? A. Decrease total assets, decrease stockholders' equity B. No effect on total assets, decrease stockholders' equity C. No effect on total assets, no effect on stockholders' equity D. Decrease total assets, no effect on stockholders' equity
A.
What item flows from the statement of retained earnings to the balance sheet? A. Retained earnings B. Cash C. Net income D. Dividends
A.
Which financial statement woud show how well a company performed over the past year? A. Income Statement B. balance sheet C. Statement of cash flows D. Statement of retained earnings
A.
Which of the following debit and credit rules is correct? A. Increases in liabilities and stockholders' equity are credited B. Decreases in assets and liabilities are credited C. Increases in assets and liabilities are debited D. Increases in liabilities and stockholders' equity are debited
A.
Which of the following transactions will increase and asset and increase a liability? A. buying equipment on account B. Purchasing office equipment for cash C. paying an account payable D. Issuing stock
A.
Which statement is false? A. Dividends are increases by credits B. Assets are increased by debits C. Revenues are increased by credits D liabilities are decreased by debits
A.
the amount a company expects to collect from customers appears on the- A. Balance sheet in the current assets section B. Balance sheet in the stockholders' equity section. C. Statement of cash flows. D. Income Statement in the expenses section
A.
Purchasing computer equipment for cash will A. decrease both total assets and stockholders' equity B. Increase both total assets and total liabilities C. decrease both total liabilities and stockholders' equity D. have no effect on total assets, total liabilities, or stockholders' equity
D.
Which of the following is an asset? A. Salary expense B Common stock C. service revenue D. None of the listed accounts is an asset
D.
Blast Enterprises buys a warehouse for $600,000 to use for its East Coast distribution operations. On the date of the purchase, a professional appraisal shows a value of $610,000 for the warehouse. The seller had originally purchased the building for $480,000. Blast has a similar warehouse on the West Coast that has a book value of $612,000. Under the Historical cost principle, Blast should record the building for- A. $600,000 B. $612,000 C. $480,000 D. $610,000
A.
An investment of cash by stockholders into the business will A. Increase stockholders' equity B. Decrease total liabilities C. Have no effect on total assets D. Decrease total assets
A.
Assets are usually reported at their- A. Historical cost B. Current market value C. Appraised value D. None of the above
A.
Where is a transaction first recorded?
A. ledger B. Account C. Journal D. Trial Balance
A credit entry to an account will- A. Decrease revenues B. Increase liabilities C. Increase expenses D. Increase assets
B.
Amounts owned to a company by its customers would be: A. Inventory B. Accounts Receivable C. Accounts payable D. Prepaid expenses
B.
Another name for the balance sheet is the- A. Statement of profit and loss B. Statement of financial position C. Statement of earnings D. Statement of operations
B.
Assume that a business is headed for certain bankruptcy and it is evident that its liabilities greatly exceed its assets. Which principle would be violated if its Financial statement were prepared using standard U.S. GAAP? A. Historical cost principle B. Continuity assumption C. entity assumption D. Stable-monetary-unit assumption
B.
Blake Company completed a consulting job and billed the customer $5,000. The impact on Blake Company from this transaction: A. Increases liabilities and decreases stockholders' equity. B. Increases assets and increases stockholders' equity C. Increases assets and increases liabilities D. Decreases liabilities and increases stockholders' equity
B.
If the credit to record the purchase of supplies on account is not posted A. Expenses will be overstated B. Liabilities will be understated C. Assets will be understated D. stockholders' equity will be understated
B.
In a double-entry accounting system- A. half of all accounts have a normal credit balance B. A debit entry is recorded on the left side of a T-account C. liabilities, stockholders' equity, and revenue accounts all have normal debit balances D. both a and b are correct
B.
Accounts payable had a normal beginning balance of $1700. During the period, there were debit postings of 4400 and credit postings of $1000. What was the ending balance? A. $1,100 debit B. $1,100 credit C. $2.300 credit D. $2,300 debit
C.
All of the following are current assets except: A. Inventory B.Accounts Receivable C. Accounts Payable D. Prepaid Expenses
C.
An attorney performs services of $1,100 for a client and receives $400 cash with the remainder on account. The journal entry for this transaction would A. Debit Cash, debit Service Revenue, credit Accounts Receivable B. debit Cash, Credit service Revenue C. debit Cash, Debit accounts receivable, credit service revenue D. debit Cash, credit Accounts Receivable, credit Service Revenue
C.
How would the issuance of common stock for cash affect the accounting equation? A. Increase assets and increase liabilities B. Decrease assets and decrease liabilities C. Increase assets and increase stockholders' equity D. Increase liabilities and decrease stockholders' equity
C.
Nicholas is a software engineer and is starting a consulting practice. What form of business organization limits his liability to the amount he has invested in the business? A. Partnership B. Proprietorship C. Corporation D. None of the above
C.
The cost of doing business are classifies as- A. Revenues B. Liabilities C. Expenses D. Assets
C.
The following accounts have normal debit balances: A. liabilities B. revenues C. Assets D. all of the listed accounts have a normal debit balance
C.
The journal entry to record a payment on account will A. debit Cash and credit Expenses B. debit Accounts Payable and credit Retained Earnings C. debit Accounts Payable and credit Cash D. debit Expenses and credit Cash
C.
What item flows from the income statement to the statement of retained earnings? A. Cash B. Inventory C. Net Income D. Dividends
C.
Which is the correct sequence for recording transactions and preparing financial statements? A. ledger, journal, trial balance, financial statements B. ledger, trial balance, journal, financial statements C. Journal, ledger, trial balance, financial statements D. Financial statements, trial balance, ledger, journal
C.
Which of the following is a true statement about international Financial Reporting Standards? A. They are not being applied anywhere in the world yet, but soon they will be B. They are considered to be the single strongest set of accounting standards in the world. C. They are converging gradually with U.S. standards. D. They are more exact (contain more rules) than U.S. generally accepted accounting principles
C.
Which of the following transactions will increase an asset and increase stockholders' equity? A. Borrowing money from a bank B. Purchasing supplies on account C. Performing a service on account for a customer D. Collecting cash from a customer on an account receivable
C.
Accounts Receivable will appear on which of the following financial statements? A. Statement of cash flows B. Statement of retained earnings C. Income statement D. Balance sheet
D.
Adam Corporation issues stock to Cara Riley in exchange for $24,000 cash. The impact on Adam Corporation's assets from this transaction: A. Does not have an impact B. Not enough information is provided to determine the impact on assets C. Decreases assets D. Increases assets
D.
An organization's investors and creditors will primarily use information provided by? A. The Financial Accounting Standards Board. B. The Internal Revenue Service C. The organization's managerial accounting system D. The organization's financial accounting system
D.
Cash paid to purchase a building appears on the statement of cash flows among the- A. Financing activities B. Stockholders' equity C. Operating activities D. investing activities
D.
During the year, ChemDry Corporation has $330,000 in revenues, $145,000 in expenses, and $5,000 in dividend declarations and payments. Net income for the year was: A. $330,000 B. $190,000 C. $150,000 D. $185,000
D.
Financial statements can be used by which of the following groups? A. Individuals B. Investors and Creditors C. Regulatory Bodies D. All of the above
D.
If the credit to record the payment of an account payable is not posted, A. cash will be understated B. liabilities will be understated C. expenses will be understated D. cash will be overstated
D.
Net income appears on which financial statements? A. Balance sheet B. statement of retained earnings C. Income Statement D. both b and c
D.
On which financial statement would the ending Balance of the account "Acconts receivable" be found? A. Statement of Cash Flows B. Income Statement C. Statement of retained earnings D. Balance Sheet
D.
Purchasing a laptop computer on account will A. have no effect on stockholders' equity B. increase total liabilities C. increase total assets D. all of the listed choices are correct
D.