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Financial Accounting Fundamentals Chapter 1-4

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Multiple Choice
Natalie Balzert
Quiz por Natalie Balzert, atualizado more than 1 year ago
Natalie Balzert
Criado por Natalie Balzert mais de 9 anos atrás
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Resumo de Recurso

Questão 1

Questão
What is the accounting equation?
Responda
  • Assets + Liabilities = Shareholder's Equity
  • Assets = Liabilities - Shareholder's Equity
  • Assets = Liabilities + Shareholder's Equity

Questão 2

Questão
Which of these is NOT one of the 5 steps in recording all accounting transactions?
Responda
  • Is it a business transaction? Yes or No?
  • What board type of accounts are affected?
  • What specific type of accounts are affected?
  • Which specific accounts has increased or decreased?
  • Which accounts are recorded in to journal entries?
  • Record all transactions in the Journal.

Questão 3

Questão
Which of these is NOT one of the 4 basic principles of accounting (GAAP) ?
Responda
  • Income principle
  • Measurement principle
  • Revenue recognition
  • Expense recognition
  • Full disclosure principle

Questão 4

Questão
What are the Rules for debits and credits?
Responda
  • Debit means right, Credit means left
  • Credit means left, Debit means left
  • Debit means left, Credit means no change
  • Debit means left, Credit means right

Questão 5

Questão
What are the 4 basic assumptions of accounting (GAAP) ?
Responda
  • Monetary assumption, Integrity assumption, Expense assumption, Business Entity assumption
  • Monetary assumption, Time period assumption, On going assumption, Business Entity assumption
  • Money assumption, Time period assumption, On going assumption, Business Enterprise assumption
  • Monetary assumption, Time travel assumption, On going assumption, Business Entity assumption

Questão 6

Questão
What are the 2 basic constraints of accounting?
Responda
  • Materiality Constrains and Cost Benefit Constraints
  • Materialistic Constraints and Cost Effective Constraints
  • Material Constraints and Cost Revenue Constraints
  • Materiality Constraints and Cost Effective Constraints

Questão 7

Questão
What is the definition of Assets?
Responda
  • Economic resource that used to have a benefit
  • Economic resource that has a future benefit

Questão 8

Questão
Define Liabilities.
Responda
  • Economic obligation that requires the use of an asset to pay it off.
  • Economic obligation that requires the shareholders to pay it off.

Questão 9

Questão
Define Equity
Responda
  • Is the excess of an asset over liabilities.
  • Is the expense of an asset over revenue.

Questão 10

Questão
What are the 5 types of accounts in all of accounting?
Responda
  • Asses, Liabilities, Shareholder's Equity, Revenue, Expense
  • Assets, Liabilities, Receivables, Equity, Revenue
  • Assets, Receivables, Shareholder's Equity, Revenue, Expense
  • Assets, Liabilities, Shareholder's Equity, Revenue, Expense

Questão 11

Questão
Define Revenue.
Responda
  • Is the amount received for selling an asset or the release (i.e. forgiveness) of debt and increases shareholder's dividends.
  • Is the amount received for selling an asset or the release (i.e. forgiveness) of debt and increases shareholder's equity.

Questão 12

Questão
Define expense.
Responda
  • Is an expired asset, which required an asset or another liability to pay it off and decreases shareholder's common stock value.
  • Is an expired asset, which required an asset or another liability to pay it off and decreases shareholder's equity.

Questão 13

Questão
Define accounting.
Responda
  • Is the process of accounting for anything of value or expense that needs to be accounted for in an accounting general ledger.
  • It is the counting of something that can be accounted for.
  • Consists of 3 basic activities. It identifies, records and hides the economic events of an organization to interested users.
  • Consists of 3 basic activities. It identifies, records and communicates the economic events of an organization to interested users.

Questão 14

Questão
What are 4 examples of accounting source documents recording all accounting transactions?
Responda
  • Bank statement, Receipt Pay Slip, A check.
  • Bank statement, Sales Invoice, Pay Slip, A check.
  • Federal statement, Sales Invoice, Pay Slip, A check.
  • Federal statement, Sales Invoice, Pay Slip, Money.

Questão 15

Questão
What is an account?
Responda
  • An account is an individual accounting record of increases and decreases in a specific asset, liability, shareholder's equity, unearned revenue and expense item.
  • An account is an individual accounting record of increases and decreases in a specific asset, liability, shareholder's equity, revenue and expense item.
  • An account is an individual accounting record of increases and decreases in a specific asset, liability, common stock and dividends, revenue and expense item.
  • An account is an individual accounting record of increases and decreases in a specific asset, liability, common stock, unearned revenue and expense item.

Questão 16

Questão
Debit always mean increase and credit always means decrease.
Responda
  • True
  • False

Questão 17

Questão
Why are accounting systems called double-entry?
Responda
  • A system that records in appropriate accounts the unique effect of each transaction.
  • A system that records in appropriate accounts the single effect of each transaction.
  • A system that records in appropriate accounts the dual effect of each transaction.

Questão 18

Questão
Monthly and quarterly time periods are called
Responda
  • calendar periods.
  • fiscal periods.
  • interim periods.
  • quarterly periods.

Questão 19

Questão
The time period assumption states that
Responda
  • a transaction can only affect one period of time.
  • estimates should not be made if a transaction affects more than one time period.
  • adjustments to the enterprise's accounts can only be made in the time period when the business terminates its operations.
  • the economic life of a business can be divided into artificial time periods.

Questão 20

Questão
An accounting time period that is one year in length, but does not begin on January 1st, is referred to as
Responda
  • a fiscal year.
  • an interim period.
  • the time period assumption.
  • a reporting period.

Questão 21

Questão
Adjustments would not be necessary if financial statements were prepared to reflect net income from
Responda
  • monthly operations.
  • fiscal year operations.
  • interim operations.
  • lifetime operations.

Questão 22

Questão
Management usually desires________________ financial statements and the IRS requires all businesses to file _______________ tax returns.
Responda
  • annual, annual
  • monthly, annual
  • quarterly, monthly
  • monthly, monthly

Questão 23

Questão
The time period assumption is also referred to as the
Responda
  • calendar assumption.
  • cyclicity assumption.
  • periodicity assumption.
  • fiscal assumption.

Questão 24

Questão
In general, the shorter the time period, the difficulty of making the proper adjustments to accounts
Responda
  • is increased.
  • is decreased.
  • is unaffected.
  • depends on if there is a profit or loss.

Questão 25

Questão
Which of the following is NOT common time period chosen by businesses as their accounting period?
Responda
  • Daily.
  • Monthly.
  • Quarterly.
  • Annually.

Questão 26

Questão
Which of the following time periods would NOT be referred to as an interim period?
Responda
  • Monthly
  • Quarterly
  • Semi-annually
  • Annually

Questão 27

Questão
The fiscal year of a business is usually determined by
Responda
  • the IRS.
  • a lottery.
  • the business.
  • the SEC.

Questão 28

Questão
Which of the following are in accordance with generally accepted accounting principles?
Responda
  • Accrual basis accounting.
  • Cash basis accounting.
  • Both accrual basis and cash basis accounting.
  • Neither accrual basis nor cash basis accounting.

Questão 29

Questão
The revenue recognition principle dictates that revenue should be recognized in the accounting period
Responda
  • in which cash is received.
  • in which the performance obligation is satisfied.
  • at the end of the month.
  • in which income taxes are paid.

Questão 30

Questão
In a service-type business, revenue is recognized
Responda
  • at the end of the month.
  • at the end of the year.
  • when the service is performed.
  • when cash is received.

Questão 31

Questão
The expense recognition principle matches
Responda
  • customers with businesses.
  • expenses with revenues.
  • assets with liabilities.
  • creditors with businesses.

Questão 32

Questão
Which one of the following is not a justification for adjusting entries?
Responda
  • Adjusting entries are necessary to ensure that the revenue recognition principle is followed.
  • Adjusting entries are necessary to ensure that the expense recognition principle is followed.
  • Adjusting entries are necessary to enable financial statements to be in conformity with GAAP.
  • Adjusting entries are necessary to bring the general ledger accounts in line with the budget.

Questão 33

Questão
An adjusting entry
Responda
  • affects two balance sheet accounts.
  • affects two income statement accounts.
  • affects a balance sheet account and an income statement account.
  • is always a compound entry.

Questão 34

Questão
The preparation of adjusting entries is
Responda
  • straight forward because the accounts that need adjustment will be out of balance.
  • often an involved process requiring the skills of a professional.
  • only required for accounts that do not have a normal balance.
  • optional when financial statements are prepared.

Questão 35

Questão
If a resource has been consumed but a bill has not been received at the end of the accounting period, then
Responda
  • an expense should be recorded when the bill is received.
  • an expense should be recorded when the cash is paid out.
  • an adjusting entry should be made recognizing the expense.
  • is is optional whether to record the expense before the bill is received.

Questão 36

Questão
Accounts often need to be adjusted because
Responda
  • there are never enough accounts to record all the transactions.
  • many transactions affect more then one time period.
  • there are always errors made in recording transactions.
  • management can' decide what they want to report.

Questão 37

Questão
Adjusting entries are
Responda
  • not necessary if the accounting system is operating properly.
  • usually required before financial statements are prepared.
  • made whenever management desires to change an account balance.
  • made to balance sheet accounts only.

Questão 38

Questão
All of the following statements are correct except
Responda
  • adjusting entries ensure that the revenue recognition and expense recognition principles are followed.
  • a company must make adjusting entries every time is prepares financial statements.
  • adjusting entries are made to balance sheet accounts only.
  • companies often prepare adjusting entries after the balance sheet date, but date them as of the balance sheet date.

Questão 39

Questão
Accountants refer to an economic event as a
Responda
  • purchase.
  • sale.
  • transaction.
  • change in ownership.

Questão 40

Questão
The process of recording transactions has become more efficient because
Responda
  • fewer events can be quantified in financial terms.
  • computers are used in processing business events.
  • more people have been hired to record business transactions.
  • business events are recorded only at the end of the year.

Questão 41

Questão
Communication of economic events is the part of the accounting process that involves
Responda
  • identifying economic events.
  • quantifying transactions into dollars and cents.
  • preparing accounting reports.
  • recording and classifying information.

Questão 42

Questão
The use of computers in recording business events
Responda
  • has made the recording process more efficient.
  • does not use the same principles as manual accounting systems.
  • has greatly impacted the identification stage of the accounting process.
  • is economical only for large businesses.

Questão 43

Questão
Which of the following events cannot be quantified into dollars and cents and recorded as an accounting transaction?
Responda
  • The appointment of a new CPA firm to perform an audit.
  • The purchase of a new computer.
  • The sale of store equipment.
  • Payment of income taxes.

Questão 44

Questão
The accounting process involves all of the following except
Responda
  • identifying economic transactions that are relevant to the business.
  • communicating financial information to users by preparing financial reports.
  • recording non-quantifiable economic events.
  • analyzing and interpreting financial reports.

Questão 45

Questão
The accounting process is correctly sequenced as
Responda
  • identification, communication, recording.
  • recording, communication, identification.
  • identification, recording, communication.
  • communication, recording, identification.

Questão 46

Questão
Which of the following techniques are NOT used by accountants to interpret and report financial information?
Responda
  • Graphs.
  • Special memos for each class of external users.
  • Charts.
  • Ratios.

Questão 47

Questão
Accounting consists of three basic activities which are related to economic events of an organization. These include
Responda
  • identifying, recording and communicating.
  • identifying, calculating and responding.
  • classifying, numbering and reporting.
  • issuing, reporting and classifying.

Questão 48

Questão
All of the following statements are correct except
Responda
  • Good decision-making depends on good information.
  • A vital element in communicating economic events is the accountant's ability to analyze and interpret reported information.
  • The origins of accounting are generally attributed to Socrates, a classical Greek philosopher, who promoted accounting as a social contract.
  • The information that a user of financial information needs depends upon the kinds of decisions the user makes.

Questão 49

Questão
An account consists of
Responda
  • one part.
  • two parts.
  • three parts.
  • four parts.

Questão 50

Questão
The left side of an account is
Responda
  • blank.
  • a description of the account.
  • the debit side.
  • the balance of the account.

Questão 51

Questão
Which of the following is NOT part of an account?
Responda
  • Credit side.
  • Trial balance.
  • Debit side.
  • Title.

Questão 52

Questão
An account is a part of the financial information system and is described by all except which one of the following?
Responda
  • An account has a debit and credit side.
  • An account is a source document.
  • An account may be part of a manual or a computerized accounting system.
  • An account has a title.

Questão 53

Questão
The right side of an account
Responda
  • is the correct side.
  • reflects all transactions for the accounting period.
  • shows all the balances of the accounts in the system.
  • is the credit side.

Questão 54

Questão
An account consists of
Responda
  • a title, a debit balance and a credit balance.
  • a title, a left side and a debit balance.
  • a title, a debit side and a credit side.
  • a title, a right side and and debit balance.

Questão 55

Questão
A T-Account is
Responda
  • a way of depicting the basic form of an account.
  • what the computer uses to organize bytes of information.
  • a special account used instead of a trial balance.
  • used for accounts that have both a debit and credit balance.

Questão 56

Questão
Credits
Responda
  • decrease both assets and liabilities.
  • decrease assets and increase liabilities.
  • increase both assets and liabilities.
  • increase assets and decrease liabilities.

Questão 57

Questão
A debit to an asset account indicates
Responda
  • an error.
  • a credit was made to a liability account.
  • a decrease in the asset.
  • an increase in the asset.

Questão 58

Questão
The normal balance of any account is the
Responda
  • left side.
  • right side.
  • side which increases that account.
  • side which decreases that account.

Questão 59

Questão
The double-entry system requires that each transaction must be recorded
Responda
  • in at least two different accounts.
  • in two sets of books.
  • in a journal and in a ledger.
  • first as a revenue and then as an expense.

Questão 60

Questão
A credit is not the normal balance for which account listed below?
Responda
  • Common stock account.
  • Revenue account.
  • Liability account.
  • Dividends account.

Questão 61

Questão
Which of the following represents the expanded basic accounting equation?
Responda
  • Assets = Liabilities + Common stock + Retained Earnings + Dividends - Revenues - Expenses
  • Assets + Dividends + Expenses = Liabilities + Common Stock + Retained Earnings + Revenues
  • Assets - Liabilities - Dividends = Common Stock + Retained Earnings + Revenues - Expenses
  • Assets = Revenues + Expenses - Liabilities

Questão 62

Questão
Preparing a worksheet involves
Responda
  • two steps
  • three steps
  • four steps
  • five steps

Questão 63

Questão
The adjustments entered in the adjustments columns of a worksheet are
Responda
  • not journalized.
  • posted to the ledger but not journalized.
  • not journalized until after the financial statements are prepared.
  • journalized before the worksheet is completed.

Questão 64

Questão
The information for preparing a trial balance on a worksheet is obtained from
Responda
  • financial statements.
  • general ledger accounts.
  • general journal entries.
  • business documents.

Questão 65

Questão
After the adjusting entries are journalized and posted to the accounts in the general ledger, the balance of each account should agree with the balance shown on the
Responda
  • adjusted trial balance.
  • post-closing trial balance.
  • the general journal.
  • adjustments columns of the worksheet.

Questão 66

Questão
If the total debit column exceeds the total credit column of the income statement columns on a worksheet, then the company has
Responda
  • earned net income for the period.
  • an error because debits do not equal credits.
  • suffered a net loss for the period.
  • to make and adjusting entry.

Questão 67

Questão
A worksheet is a multiple column form that facilitates the
Responda
  • identification of events.
  • measurement process.
  • preparation of financial statements.
  • analysis process.

Questão 68

Questão
Which of the following companies would be least likely to use a worksheet to facilitate the adjustment process?
Responda
  • Large company with numerous accounts.
  • Small company with numerous accounts.
  • All companies, since worksheets are required under generally accepted accounting principles.
  • Small company with few accounts.

Questão 69

Questão
A worksheet can be thought of as a(n)
Responda
  • permanent accounting record.
  • optional device used by accountants.
  • part of the general ledger.
  • part of the journal.

Questão 70

Questão
The account, Supplied, will appear in the following debit columns of the worksheet.
Responda
  • Trial Balance.
  • Adjusted Trial Balance.
  • Balance Sheet.
  • All of these.

Questão 71

Questão
When constructing a worksheet, accounts are often needed that are not listed in the trial balance already entered on the worksheet from the ledger. Where should that additional accounts be shown on the worksheet?
Responda
  • They should be inserted in alphabetical order into the trial balance accounts already given.
  • They should be inserted in chart of account order into the trial balance already given.
  • They should be inserted on the lines immediately below the trial balance totals.
  • They should not be inserted on the trial balance until the next accounting period.

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