Combo with "Accounting 102" and 1 other

On January 31, an entity's balance sheet showed net assets of $1,025 and liabilities of $225. Stockholders' equity on January 31 was:

$1,025

At the end of the year, retained earnings totaled $1,700. During the year, net income was $250, and dividends of $120 were declared and paid. Retained earnings at the beginning of the year totaled:

$1570

At the beginning of the year, paid-in capital was $82 and retained earnings was $47. During the year, the stockholders invested $24 and dividends of $6 were declared and paid. Retained earnings at the end of the year were $52. Total stockholders' equity at the end of the year was:

$158

Martin & Associates borrowed $5,000 on April 1, 2013 at 8% interest with both principal and interest due on March 31, 2014. How much should be in the firm's interest payable account at December 31, 2013?

$400

At the beginning of the fiscal year, the balance sheet showed assets of $1,364 and stockholders' equity of $836. During the year, assets increased $74 and liabilities decreased $38. Liabilities at the end of the year totaled:

$490

Sage, Inc. has 20 employees who work Monday through Friday each week; each employee earns $100 per day and is paid every Friday. The end of the accounting period is on a Wednesday. How much wages expense should the firm accrue at the end of the period?

$6000

D. All of the above are characteristics or limitations of the kind of information that financial reporting by business enterprises can provide.

12. Which of the following is not a characteristic or limitation of the kind of information that financial reporting by business enterprises can provide? A. The information results in approximate, rather than exact, measures. B. The information largely reflects the financial effects of transactions that have already happened. C. The information is provided and used at a cost. D. All of the above are characteristics or limitations of the kind of information that financial reporting by business enterprises can provide.

C. By an auditing firm cannot own any stock in the company being audited.

13. The ethical concept of independence means that an accountant employed: A. By a corporation cannot prepare financial statements for use by the company's bank. B. By one company cannot work part-time for another company. C. By an auditing firm cannot own any stock in the company being audited. D. By one company cannot accept a job with another company in the same industry.

B. Focus on providing information for resource providers, rather than investors.

14. The objectives of financial reporting for nonbusiness enterprises: A. Are exactly the same as those for business enterprises. B. Focus on providing information for resource providers, rather than investors. C. Have more of an internal utilization rather than external reporting focus. D. Do not give consideration to the cost of providing information.

D. Attempt to be honest and forthright in dealings and communications with others.

15. The ethical concept of integrity means that an individual must: A. Sign a pledge to abide by all laws and regulations. B. Report to a supervisor any violation of the code of conduct of her company that is observed. C. Read, understand, and agree to follow all provisions of her employer's code of conduct. D. Attempt to be honest and forthright in dealings and communications with others.

D. Financial reporting should provide information about the economic resources of an enterprise, the claims to those resources, and changes in those resources and claims to them.

16. Which of the following is an objective of financial reporting by business enterprises? A. Financial reporting should provide assurance that all liabilities of business enterprises will be paid. B. Financial reporting should show the timing and amount of future cash dividends to potential investors. C. The primary focus of financial reporting is information about the assets of the entity. D. Financial reporting should provide information about the economic resources of an enterprise, the claims to those resources, and changes in those resources and claims to them.

A firm's net income for the year was $200,000. Average assets totaled $1.5 million, and average liabilities totaled $0.3 million. Return on equity was:

16.7%

C. Both A and B are correct.

17. Which of the following is true about the IASB? A. Created to promote world acceptance and observation of accounting and financial reports. B. The IASB is a private body and the pronouncements cannot be enforced. C. Both A and B are correct. D. None of the above is correct.

E. A, B and C are correct.

18. The provisions of the Sarbanes-Oxley Act of 2002 had the following components: A. Enforce auditing. B. Attestation. C. Quality control. D. None of the above are provisions. E. A, B and C are correct.

B. To measure the current market value of the business enterprise.

2. Which of the following is not an objective of financial reporting described in FASB Concepts Statement No. 1? A. To provide information about how management of an enterprise has discharged its stewardship responsibility to owners. B. To measure the current market value of the business enterprise. C. To provide information so potential investors or creditors can make their own predictions of future earnings. D. To focus primarily on information about earnings and its components. E. All of the above are objectives of financial reporting.

C. The FASB follows a due process procedure that permits input from interested parties before a standard is issued.

3. Which of the following statements about the Financial Accounting Standards Board is correct? A. The FASB is an agency of the Federal government. B. The FASB has the authority to fine a noncompliant firm. C. The FASB follows a due process procedure that permits input from interested parties before a standard is issued. D. The FASB is controlled by the American Institute of CPA's. E. None of the above statements is correct.

C. financial accounting, national accounting, cost accounting.

4. Major classifications of accounting activity would not include: A. financial accounting, internal auditing, public accounting. B. internal auditing, governmental accounting, managerial accounting. C. financial accounting, national accounting, cost accounting. D. auditing, income tax accounting, governmental accounting.

A firm has an ROI of 15%, turnover of 3, and sales of $6 million. The firm's margin is:

5%

B. Probability of success of a new product development.

5. Which of the following is not an example of a decision or informed judgment that a potential investor would make from accounting information? A. Future profitability based on past profitability. B. Probability of success of a new product development. C. A forecast of dividends. D. Assessment of risk that a company may have more debt than it can repay if the economy enters a recession.

A. Personnel turnover statistics (i.e., hiring and terminations).

6. Which of the following is not an example of a decision or informed judgment that a potential employee could make from accounting information? A. Personnel turnover statistics (i.e., hiring and terminations). B. Probability of the company's ability to make profit sharing plan contributions in the future. C. Assessment of the risk that the company may become bankrupt in the near future. D. The extent of the company's commitment to a research program.

D. A Certified Public Accountant.

7. Which of the following is qualified to express an auditor's opinion about an entity's financial statements? A. A Comptroller. B. A Certified Management Accountant. C. A Certified Internal Auditor. D. A Certified Public Accountant. E. None of the above.

C. Managerial accounting.

8. Which classification of accounting is most concerned with the use of economic and financial information to plan and control many of the activities of the entity? A. Financial accounting. B. Auditing-Public accounting. C. Managerial accounting. D. Income tax accounting.

D. states that they are presented in conformance with generally accepted accounting principles.

9. An unqualified auditors' opinion about an entity's financial statements: A. is a clean bill of health. B. means that all of the entity's transactions during the audited period were checked out. C. guarantees that the entity was not involved in or the victim of any fraudulent activities during the audited period. D. states that they are presented in conformance with generally accepted accounting principles.

Which of the following are qualified to express an auditor's opinion about an entity's financial statements?

A Certified Public Accountant.

Which of the following accounting methods accomplishes much of the matching of revenues and expenses?

Accrual accounting.

Which of the following is not a characteristic or limitation of the kind of information that financial reporting by business enterprises can provide?

All of these are characteristics or limitations of the kind of information that financial reporting by business enterprises can provide.

Which of the following entities would not require accounting information pertaining to their economic activities?

All of these require accounting information.

An expanded version of the accounting equation could be:

Assets = Liabilities + Paid-in Capital + Beginning Retained Earnings + Revenues - Expenses - Dividends

Which of the following is not usually considered a measure of an entity's liquidity?

Cash ratio

The provisions of the Sarbanes-Oxley Act of 2002 had the following components:

Enforce auditing, Attestation and Quality control are correct.

The officer of a corporation responsible for the firm's published financial statements would be most concerned about pronouncements of the

FASB.

The authoritative financial accounting standards-setting body in the United States is presently the:

Financial Accounting Standards Board (FASB).

Which of the following is an objective of financial reporting by business enterprises?

Financial reporting should provide information about the economic resources of an enterprise, the claims to those resources, and changes in those resources and claims to them.

Cost accounting is a subset of which of the following?

Managerial accounting.

Which classification of accounting is most concerned with the use of economic and financial information to plan and control many of the activities of the entity?

Managerial accounting.

Which of the following accounts is part of working capital?

Merchandise Inventory.

Which of the following is true about the International Accounting Standards Board (IASB)?

Only the IASB has been working with the FASB in recent years to achieve convergence of International Financial Reporting Standards (IFRS) and U.S. GAAP and the goal of the IASB is to develop a single set of high quality, understandable, enforceable, and globally accepted financial reporting standards based upon clearly articulated principles are correct.

An engineering consultant provided $300 of services to a client; the client paid $50 when the bill was submitted and will pay the balance within a week. The consultant will record this transaction by:

Option A

Martin & Associates borrowed $5,000 on April 1, 2013 at 8% interest with both principal and interest due on March 31, 2014. Which of the following journal entries should the firm use to record the payment of interest on March 31, 2014?

Option A

To accrue $3,200 of employee salaries for the last week of February, the employer's journal entry is:

Option B

Martin & Associates borrowed $5,000 on April 1, 2013 at 8% interest with both principal and interest due on March 31, 2014. Which of the following journal entries should the firm use to accrue interest at the end of each month?

Option C

When a firm purchases supplies for use in its business, and the cost of the supplies purchased is recorded as an asset, the following adjustment to recognize the cost of supplies used will probably be required:

Option C

Which of the following is not an example of a decision or informed judgment that a potential employee could make from accounting information?

Personnel turnover statistics (i.e., hiring and terminations).

Which of the following is not an example of a decision or informed judgment that a potential investor would make from accounting information?

Probability of success of a new product development.

Which of the following is not a transaction to be recorded in the accounting records of an entity?

Receipt of a plaque recognizing the firm's encouragement of employee participation in the United Way fund drive.

Another term for return on investment is:

Return on assets.

Which of the following is a universally accepted measure of profitability?

Return on investment.

The balance sheet might also be called:

Statement of Financial Position.

Which of the following statements about the Financial Accounting Standards Board is correct?

The FASB follows a due process procedure that permits input from interested parties before a standard is issued.

Transactions are summarized in:

The entity's accounts.

Stockholders' equity refers to which to the following?

The ownership right of the stockholder(s) of the entity.

If a firm borrowed money on a six-month bank loan, the firm's working capital immediately after obtaining the loan, relative to its working capital just prior to the loan, would be:

The same.

The Interest Receivable account for February showed transactions totaling $8,500 and an adjustment of $11,200.

The transactions were probably entered on the credit side of the account.

The balance in the Wages Payable account increased from $12,200 at the beginning of the month to $15,000 at the end of the month. Wages accrued during the month totaled $61,000.

Wages paid during the month totaled $58,200.

The time frame associated with a balance sheet is:

a point in time in the past.

Wisdom Co. has a note payable to its bank. An adjustment is likely to be required on Wisdom's books at the end of every month that the loan is outstanding to record the:

accrued interest expense for the month.

Matching revenues and expenses refers to:

accurately reflecting the results of operations for a fiscal period.

When a firm purchases supplies for its business:

an adjustment will probably be required as supplies are used.

The ethical concept of integrity means that an individual must:

attempt to be honest and forthright in dealings and communications with others.

The ethical concept of independence means that an accountant employed:

by an auditing firm cannot own any stock in the company being audited.

Major classifications of accounting activity would not include

financial accounting, national accounting, cost accounting.

The objectives of financial reporting for nonbusiness enterprises:

focus on providing information for resource providers, rather than investors.

A current ratio of 6.0 is usually an indication that the firm:

has not made the most productive use of its assets.

The accountant at Abco, Inc. made an adjusting entry at the end of February to accrue interest on a note receivable from a customer. The effect of this entry is to:

increase ROI for February.

A credit entry will:

increase a liability account.

A debit entry will:

increase an expense account.

In the seller's records, the sale of merchandise on account would:

increase assets and increase expenses.

In the buyer's records, the purchase of merchandise on account would:

increase assets and increase liabilities.

A newspaper ad submitted and published this week, with the agreement to get paid for it next week would, in the newspaper's records:

increase assets and increase revenues.

In an advertiser's records, a newspaper ad submitted and published this week with the agreement to pay for it next week would:

increase liabilities and increase expenses.

The effect of an adjustment on the financial statements is usually to:

increase the accuracy of both the balance sheet and income statement.

A credit entry will:

increase the balance of a revenue account.

A debit entry will:

increase the balance of an expense account.

Revenues are:

increases in net assets from selling a product.

The distinction between a current asset and other assets:

is based on when the asset is expected to be converted to cash, or used to benefit the entity.

The return on investment measure of performance:

is calculated using net income as the amount of return.

A cash equivalent is a current asset that:

is readily convertible into cash with a minimal risk.

The return on investment measure of performance:

is used by individuals to compare investment performance.

An advantage of the DuPont model for calculating ROI is that:

it focuses on asset utilization as well as net income.

A firm's net income is $315,000 on sales of $31.5 million. Average assets for the period were $7 million. For the year:

margin was 1%, turnover was 4.5, and ROI was 4.5%.

The accounting concept/principle being applied when an adjustment is made is usually:

matching revenue and expense.

The Statement of Changes in Stockholders' Equity shows:

net income and dividends for the period.

The purpose of the income statement is to show the:

net income or net loss for the period covered by the statement.

Another term for return on equity is:

none of these

A concept or principle that relates to transactions is:

original cost

For a firm that presently has a current ratio of 2.0, the effect on this ratio of paying a current liability is that it:

raises the current ratio.

Return on equity:

relates net income and stockholders' equity.

When comparing entity financial ratios with industry ratios:

relative values at a point in time may not be significant.

A journal entry recording an accrual:

results in a better matching of revenues and expenses.

The income statement shows amounts for:

revenues, gains, expenses and losses

The balance sheet of an entity:

shows amounts that are not adjusted for changes in the purchasing power of the dollar.

An unqualified auditors' opinion about an entity's financial statements:

states that they are presented in conformance with U.S. generally accepted accounting principles.

Paid-in Capital represents:

the amount invested in the entity by the stockholders

The principle of consistency means that:

the effect of any change in an accounting method will be disclosed in the financial statements or notes thereto.

The effect of an adjustment is:

to increase the accuracy of the financial statements.

Financial statement ratios support informed judgments and decision making most effectively:

when the trend of entity data is compared to the trend of industry data.

D. All of the above require accounting information.

1. Which of the following entities would not require accounting information pertaining to their economic activities? A. Social clubs. B. Not-for-profit entities. C. State governments. D. All of the above require accounting information. E. None of the above requires accounting information.

D. Managerial accounting.

10. Cost accounting is a subset of which of the following? A. Internal auditing. B. Public auditing. C. Cost analysis. D. Managerial accounting.

A. FASB.

11. The officer of a corporation responsible for the firm's published financialstatements would be most concerned about pronouncements of the: A. FASB. B. AICPA. C. GASB. D. SEC. E. IRS.

Which of the following is not one of the 5 questions of transaction analysis?

Is this an accrual?