Information provided in financial statements should be?
1. Relevant and Reliable
2. Fair and Just
3. Accurate and Truthful
4. Audited by a CPA
Relevant and Reliable
100
Who controls a corporation?
1. The President
2. The CFO
3. Stockholders
4. The Board of Directors
The Stockholders
100
What form of business is separate from its owners?
1. Sole Proprietor
2. Partnership
3. Corporation
4. Limited Liability Company
A Corporation
100
What does AICPA stand for and what is it?
American Institute of Certified Public Accountants - the largest organizations of accountants
100
What is the objectivity principle of accounting?
1. holds that the entity will remain in operation for the foreseeable future.
2. enables accountants to ignore the effect of inflation in the accounting records
3. maintains that each organization or section of an organization stands apart from other organizations and individuals.
4. ensures that accounting records and statements are based on the most reliable data available
ensures that accounting records and statements are based on the most reliable data available.
200
An expense incurred in 2008 is not paid until 2009. Using the accrual basis of accounting, the expense should appear on:
1. the 2008 income statement.
2. the 2009 income statement.
3. neither the 2008 nor the 2009 income statement.
4. both the 2008 and the 2009 income statement
the 2008 income statement
200
Cash for merchandise to be delivered in 2009 is received in 2008. Using the accrual basis of accounting, the revenue should appear on:
1. the 2008 income statement.
2. the 2009 income statement. CORRECT ANSWER
3. neither the 2008 nor the 2009 income statement.
4. both the 2008 and the 2009 income statement
the 2009 income statement
200
What is The owners’ interest in the assets of a corporation is known as:
1. liabilities
2. stockholders’ equity
3. long-term assets
4. Not found on the Balance Sheet.
stockholders’ equity
200
What does FASB stand for and what does it do?
Financial Accounting Standards Board - they are responsible for producing Generally Accepted Accounting Principles.
200
What is The stable-monetary-unit concept of accounting?
1. ensures that accounting records and statements are based on the most reliable data available
2. holds that the entity will remain in operation for the foreseeable future.
3. maintains that each organization or section of an organization stands apart from other organizations and individuals.
4. enables accountants to ignore the effect of inflation in the accounting records.
enables accountants to ignore the effect of inflation in the accounting records.
300
Which financial statement would show the amount of cash generated by operations?
1. Balance Sheet
2. Income Statement
3. Statement of Cash Flows
4. Trial Balance
Statement of Cash Flows
300
In a bank reconciliation, a deposit in transit is:
1. added to the bank balance
2. added to the book balance.
3. deducted from the book balance
4. deducted from the bank balance
added to the bank balance
300
What is A company received cash in exchange for issuing stock. This transaction increased assets and:
1. increased expenses.
2. increased revenues.
3. increased liabilities.
4. increased equity.
increased equity.
300
What does SEC stand for and what does it do?
Security Exchange Commission - a government entity that oversees publicly traded companies.
300
What is The going-concern concept of accounting?
1. enables accountants to ignore the effect of inflation in the accounting records.
2. holds that the entity will remain in operation for the foreseeable future.
3. maintains that each organization or section of an organization stands apart from other organizations and individuals.
4. ensures that accounting records and statements are based on the most reliable data available
holds that the entity will remain in operation for the foreseeable future.
400
What is a trial balance?
A list of all accounts with their balances. It is used to ensure total debits equals total credits.
400
Which characteristic will NOT be found in an effective system of internal control?
1. competent, reliable, and ethical personnel
2. a combination of duties
3. a separation of duties
4. documents and records
a combination of duties
400
What is A company purchased office supplies for cash. This transaction increased assets and:
1. increased equity.
2. increased liabilities.
3. increased revenues.
4. decreased assets.
decreased assets.
400
What does GAAP stand for?
Generally Accepted Accounting Principles.
400
What principle states that assets acquired by the business should be recorded at their actual price is the:
1. Cost Principle
2. objectivity principle
3. reliability principle
4. stable dollar principle
Cost Principle
500
The company’s ____________ has the primary responsibility for establishing and maintaining a company’s system of internal control.
top management
500
If the interest on a note was 12.5% and the principal was $100,000, what was the Maturity Value of the note, if the note is outstanding for 7 months?
Interest = P x R x T
MV= P + I
$107,291.67
500
Which of the following account types is increased with a debit and has a normal debit balance?
1. expense account.
2. liability account.
3. asset account.
4. both an expense account and an asset account
both an expense account and an asset account.
500
Put the following accounts in order
posting, transacting, closing and journalizing
transacting, journalizing, posting and closing
500
If the interest is $5,000 on a 6%, 2 month note, what is the principal?
n= P x R x T