Accounting for Business
Final Test Solutions
Course Introduction
Accounting for Business introduces students to the fundamental concepts and principles of financial and managerial accounting as they apply to modern business environments. The course covers essential topics such as recording financial transactions, preparing and interpreting financial statements, understanding the accounting cycle, and analyzing financial information for decision-making. Emphasis is placed on the role of accounting in supporting business operations, strategic planning, and performance evaluation, providing students with practical skills and knowledge to apply accounting techniques within real-world business contexts.
Recommended Textbook
Introduction to Financial Accounting 11th Edition by Charles T. Horngren
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12 Chapters
1592 Verified Questions
1592 Flashcards
Source URL: https://quizplus.com/study-set/3420
Page 2
Chapter 1: Accounting: the Language of Business
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127 Verified Questions
127 Flashcards
Source URL: https://quizplus.com/quiz/67924
Sample Questions
Q1) Jakey Technologies has 1,000 folders in inventory that cost $2.00 each.The company's supplier announced that,effective immediately,all future folders will cost $2.20 each.Jakey Technologies should
A)increase the inventory account by $200 and increase the capital account by $200.
B)increase the inventory account by $200 and decrease the capital account by $200.
C)increase the inventory account by $200 and increase the accounts payable account by $200.
D)increase the inventory account by $200 and decrease the accounts payable account by $200.
E)There is no effect from the price change on the accounts of Jakey Technologies.
Answer: E
Q2) An audit is an examination of transactions and financial statements.
A)True
B)False
Answer: True
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Chapter 2: Measuring Income to Assess Performance
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136 Verified Questions
136 Flashcards
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Sample Questions
Q1) Revenue is recorded when accounts receivable are collected under the cash basis of accounting.
A)True
B)False
Answer: True
Q2) Which of the following circumstances would result in a decrease in income under the accrual basis but would not result in a decrease in income under the cash basis?
A)Purchase of inventory on account
B)Payment of 2 months' rent in advance
C)The expiration of prepaid rent
D)The return of defective inventory purchased on account,where full credit was given
E)The payment of the current period's utility bill
Answer: C
Q3) Another name for the P-E ratio is the earnings multiple.
A)True
B)False
Answer: True
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Chapter 3: Recording Transactions
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126 Verified Questions
126 Flashcards
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Sample Questions
Q1) If the entry to journalize expired supplies is not prepared,liabilities will be overstated.
A)True
B)False Answer: False
Q2) A trial balance proves the equality of the total debits and total credits of the accounts listed.
A)True
B)False Answer: True
Q3) The purchase of office supplies on account would include a debit to accounts payable and a credit to office supplies.
A)True
B)False Answer: False
Q4) If an entry involving only two assets is not posted,the trial balance will be out of balance.
A)True
B)False Answer: False
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Chapter 4: Accrual Accounting and Financial Statements
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126 Verified Questions
126 Flashcards
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Sample Questions
Q1) An example of an explicit transaction is
A)depreciation expense.
B)expiration of prepaid rent.
C)accrual of interest payable.
D)accrual of wages payable.
E)purchasing inventory on account.
Q2) Current assets must be greater than current liabilities.
A)True
B)False
Q3) An example of an implicit transaction is
A)a cash sale.
B)a credit purchase of inventory.
C)the receipt of cash in advance of providing services.
D)the expiration of prepaid rent.
E)a credit sale.
Q4) On a multiple-step income statement,operating expenses are deducted from cost of goods sold to obtain operating income.
A)True B)False
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Chapter 5: Statement of Cash Flows
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128 Verified Questions
128 Flashcards
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Sample Questions
Q1) Which of the following statements is false?
A)The statement of cash flows reports the cash receipts and cash payments of an entity over a period of time.
B)The statement of cash flows is similar to the income statement,as they both determine the net income for a company.
C)The operating activities in a cash flow statement include transactions that affect the sale and the purchase or production of goods and services.
D)Investing activities in a cash flow statement include acquiring and selling long-term assets.
E)Financing activities in a cash flow statement include obtaining resources from owners and creditors and repaying amounts borrowed.
Q2) Net income is always used in determining a company's cash flow from operations.
A)True
B)False
Q3) To determine cash collections from customers,we take sales and add the increase in Accounts Receivable.
A)True
B)False
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7
Chapter 6: Accounting for Sales
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132 Verified Questions
132 Flashcards
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Sample Questions
Q1) White Enterprises sold $100,000 of sales in January,but customers returned $10,000 of goods to White Enterprises during the month.In addition,White Enterprises gave cash discounts of $1,000 to its customers.The beginning balance of the allowance for uncollectible accounts was $2,000 and the company uses the aging of accounts receivable to account for uncollectible accounts.What is the net sales figure for the month of January for White Enterprises?
A)$89,000
B)$90,000
C)$92,000
D)$91,000
E)$100,000
Q2) All else equal,the lower the accounts receivable turnover ratio and the higher the days to collect accounts receivable,the better.
A)True
B)False
Q3) Name the five steps for revenue recognition proposed by the joint discussions between the FASB and IASB.
Q4) Name four internal controls specific to the cash account.
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Page 8
Chapter 7: Inventories and Cost of Goods Sold
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120 Verified Questions
120 Flashcards
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Sample Questions
Q1) Given the following data,what is cost of goods sold? \[\begin{array} { l c }
\text { Fales revenue } & \$ 730,000\\
\text { Epginninginventory } & 80,000 \\
\text { Endinginventory } & 95,000 \\
\text { lumcheses of inventory } & 160,000
\end{array}\]
A)$585,000
B)$145,000
C)$570,000
D)$175,000
E)$555,000
Q2) Under a periodic inventory system,a business maintains a continual record of inventory on hand.
A)True
B)False
Q3) If unit costs and prices did not fluctuate,specific identification,LIFO,FIFO,and weighted-average would show the same ending inventory and cost of goods sold balances.
A)True
B)False
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Chapter 8: Long-Lived Assets
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152 Verified Questions
152 Flashcards
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Sample Questions
Q1) Delta Company acquired land and a building on March 1,20X3,paying a total of $1,400,000.Separately,the land had an estimated fair market value of $750,000 and the building had an estimated fair market value of $1,125,000.In order to use the property,land improvements of $20,000 were incurred.Additionally,the building needed to be rewired,at a cost of $65,000.Also,certain walls had to be knocked down,while others were constructed.The cost to remove and replace walls was $80,000.The company took occupancy of the building on August 1,20X3. For all of items noted above,determine how much will be incorporated into the land account,the building account,or expensed as of Delta Company's year end of December 31,20X3.
Q2) Double-declining-balance depreciation computes annual depreciation by multiplying the asset's book value at the beginning of the year by two times the straight-line rate.
A)True
B)False
Q3) The depreciable value is the difference between the total acquisition cost and the predicted residual value.
A)True
B)False
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Page 10
Chapter 9: Liabilities and Interest
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196 Verified Questions
196 Flashcards
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Sample Questions
Q1) Nunn Industries had the following items on its December 31,20X3,balance sheet:
\[\begin{array} { l l }
\text { Cashand cash equivalents } & \$ 56,230 \\
\text { Accounts payable } & 96,640 \\
\text { Inventories } & 60,790 \\
\text { Additional paid-in capital } & 51,690 \\
\text { Accrued liabilities and expenses } & 94,100 \\
\text { layments due within 1 year on long-term debt } & 35,380 \\
\text { short-term debt } & 39,030 \\
\text { Long-term debt } & 97,290
\end{array}\] Required:
Prepare the current liabilities section of Nunn Industries' balance sheet.
Q2) On January 1,20X3,Nets n' Hoops issued $5,000,000 of 9%,10-year bonds dated January 1,20X3,with annual interest payments on December 31.The bonds were issued for $4,692,570 yielding an effective interest rate of 10%.Nets n' Hoops uses the effective-interest method of amortization.
a.Prepare the necessary journal entries to record the issuance of the bonds and the first interest payment.
b.Determine the ending net liability of the bonds on December 31,20X3.
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Chapter 10: Stockholders Equity
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117 Verified Questions
117 Flashcards
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Sample Questions
Q1) In the United States,most corporations pay dividends every six months.
A)True
B)False
Q2) With respect to dividends,the record date comes first and is always followed by the declaration date,which is then always followed by the payment date.
A)True
B)False
Q3) Preferred stocks and bonds have some similar characteristics.
A)True
B)False
Q4) Market value per share divided by book value per share is commonly referred to as earnings per share.
A)True
B)False
Q5) Stock splits generally cause stock prices to fall.
A)True
B)False
Q6) In general,what are the principal rights of shareholders?
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Chapter 11: Intercorporate Investments and Consolidations
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110 Verified Questions
110 Flashcards
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Sample Questions
Q1) On September 1,2X12,Yelter Oil purchased trading securities consisting of common and preferred stocks.The portfolio consists of:
\(\begin{array} { l l l l }
\text { Company } & \# \text { of shares } & \text { purchase price/Share } & \text { market value (9/30/2X12) } \\
\text { Haring } & 400 & \$ 24 & \$ 20 \\
\text { jacker } & 200 & \$ 16 & \$ 19
\end{array}\) What will be the net gain or loss recorded on Yelter Oil's income statement for the quarter ended September 30,2X12?
Q2) The market method applies to short-term debt securities classified as trading securities and,as a result,a drop in market value below cost will result in a write-down of the investment.
A)True
B)False
Q3) The investor will increase Interest Revenue when the discount on a held-to-maturity security is amortized.
A)True
B)False
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Page 13
Chapter 12: Financial Statement Analysis
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122 Verified Questions
122 Flashcards
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Sample Questions
Q1) When a financial analyst evaluates a company's operating performance,the evaluation should exclude extraordinary items.
A)True
B)False
Q2) Fulton Company has the following data available: \(\begin{array}{l}
\text { Wage Expense, For the Year Ending December 31, 2X13} & \$95 \\
\text { Wage Expense, For the Year Ending December 31,2 X 12}& \$90 \\
\text { Sales, For the Year Ending December 31, 2X13}& \$900 \\
\text { Sales, For the Year Ending December 31, 2X12}& \$800 \\
\text { Net Income, For the Year Ending December 31, 2X13}& \$130 \\ \text { Net Income, For the Year Ending December 31, 2X12}& \$ 110\\
\end{array}\) If a common size income statement were prepared,what percentage would be attributable to the 2X13 wage expense of Fulton Company?
A)10.6%
B)11.2%
C)46.2%
D)58.1%
E)81.8%
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Page 14