Unit 1 Ch.1-3
• Question
1
4 out of 4 points
The Securities and Exchange
Commission (SEC) is a government agency that has legal authority to establish
GAAP.
Selected
Answer: True
• Question
2
4 out of 4 points
Zapper has beginning equity of
$257,000, net income of $51,000, dividends of $40,000 and stockholder
investments of $6,000. Its ending equity is:
Selected
Answer: $274,000.
• Question
3
4 out of 4 points
The Superior Company acquired a
building for $500,000. The building was appraised at a value of $575,000. The
seller had paid $300,000 for the building 6 years ago. Which accounting principle
would require Superior to record the building on its records at $500,000?
Selected
Answer: Measurement (Cost)
principle.
• Question
4
4 out of 4 points
A company acquires equipment for
$75,000 cash. This represents a(n):
Selected
Answer: Investing activity.
• Question
5
4 out of 4 points
All of the following are true
regarding ethics except:
Selected
Answer: Ethics do not affect
the operations or outcome of a company.
• Question
6
4 out of 4 points
The Financial Accounting
Standards Board is the governmental agency that sets both broad and specific
accounting principles.
Selected
Answer: False
• Question
7
4 out of 4 points
A net loss occurs when revenues
exceed expenses.
Selected
Answer: False
• Question
8
4 out of 4 points
Billington Corp. borrows $80,000
cash from Second National Bank. How does this transaction affect the accounting
equation for Billington?
Selected
Answer: Assets would increase
$80,000 and liabilities would increase $80,000.
• Question
9
4 out of 4 points
A customer's promise to pay on
credit is classified as an account payable by the seller.
Selected
Answer: False
• Question
10
0 out of 4 points
Which of the following statements
is not true:
Selected
Answer: Accounts receivable
are increased by billings to customers.
• Question
11
0 out of 4 points
The amount of net income is added
on the statement of retained earnings.
Selected
Answer: False
• Question
12
4 out of 4 points
Revenues always increase equity.
Selected
Answer: True
• Question
13
4 out of 4 points
The record of all accounts and
their balances used by a business is called a:
Selected
Answer: Ledger (or General
Ledger).
• Question
14
4 out of 4 points
"Unearned" accounts are liabilities
that must be fulfilled.
Selected
Answer: True
• Question
15
4 out of 4 points
The ordering of accounts in a
trial balance typically follows their identification number from the chart of
accounts, that is, assets first, then liabilities, then common stock and
dividends, followed by revenues and expenses.
Selected
Answer: True
• Question
16
4 out of 4 points
Increases in liability accounts
are recorded as debits.
Selected
Answer: False
• Question
17
4 out of 4 points
The balances in Sanchez
Accounting Services' office supplies account on February 1 and February 28 were
$1,200 and $375, respectively. If the office supplies expense for the month is
$1,900, what amount of office supplies was purchased during February?
Selected
Answer: $1,075
• Question
18
4 out of 4 points
All of the following are true
regarding unearned revenues except:
Selected
Answer: The adjusting entry
for unearned revenues increases assets and increases revenues.
• Question
19
4 out of 4 points
Interim financial statements
refer to financial reports:
Selected
Answer: That cover less than
one year, usually spanning one, three, or six-month periods.
• Question
20
0 out of 4 points
The Retained earnings account has
a credit balance of $37,000 before closing entries are made. Total revenues for
the period are $55,200, total expenses are $39,800, and dividends are $9,000.
What is the correct closing entry for the revenue accounts?
Selected
Answer: Debit Income Summary
$55,200; credit Revenue accounts $55,200.
• Question
21
4 out of 4 points
A company purchased new furniture
at a cost of $16,000 on January 1. The furniture is estimated to have a useful
life of 6 years and a $1,000 salvage value. The company uses the straight-line
method of depreciation. What is the book value of the furniture on December 31
of the first year?
Selected
Answer: $13,500
• Question
22
0 out of 4 points
For the year ended December 31, a
company has revenues of $317,000 and expenses of $196,000. The company paid
$50,000 in dividends during the year. The balance in the Retained earnings
account before closing is $81,000. Which of the following entries would be used
to close the dividends account?
Selected
Answer: Debit Dividends
$50,000; credit Retained earnings $50,000.
• Question
23
4 out of 4 points
The following information is
available for the Higgins Travel Agency. After closing entries are posted, what
will be the balance in the Retained earnings account?
Net Income $ 42,500
Retained earnings
130,000
Dividends 12,000
________________________________________
Selected
Answer: $160,500.
• Question
24
4 out of 4 points
The accrual basis of accounting
reflects the principle that revenue is recorded when it is earned, not when
cash is received.
Selected
Answer: True
• Question
25
4 out of 4 points
Reversing entries:
Selected
Answer: Are optional.
Comments
Post a Comment