Accounting I Mock Exam
Course Introduction
Accounting I introduces students to the foundational principles and practices of financial accounting. The course covers key concepts such as the accounting cycle, double-entry bookkeeping, preparation and analysis of financial statements, and the role of accounting in business decision-making. Students will learn to record, classify, and summarize economic transactions in accordance with generally accepted accounting principles (GAAP), as well as develop an understanding of ethical considerations in accounting. Through practical exercises and real-world examples, students will gain the skills necessary to interpret and communicate financial information effectively.
Recommended Textbook
Financial Accounting 6th Edition by Walter T. Harrison
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11 Chapters
1425 Verified Questions
1425 Flashcards
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Page 2
Chapter 1: The Financial Statements
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143 Verified Questions
143 Flashcards
Source URL: https://quizplus.com/quiz/69193
Sample Questions
Q1) Dividends appear on the:
A) retained earnings statement
B) income statement
C) balance sheet
D) both the retained earnings statement and the income statement
Answer: A
Q2) When a repurchase of shares is done by a company it:
A) increases the amount of owners' equity
B) decreases the amount of owners' equity
C) decreases the amount of total liabilities
D) increases the amount of total liabilities
Answer: B
Q3) Cash would appear on the:
A) income statement with the revenues
B) retained earnings statement with the net income
C) balance sheet with the current assets
D) balance sheet with the current liabilities
Answer: C
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Chapter 2: Recording Business Transactions
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170 Verified Questions
170 Flashcards
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Sample Questions
Q1) A trial balance is simply a list of all accounts and their balances at a point in time.
A)True
B)False
Answer: True
Q2) Prepare a Statement of Retained Earnings for the year ended June 30,2017. Chedacorn was incorporated on July 1,2015 by 10 shareholders who each invested $100,000 in cash in exchange for common shares.Chedacorn's year end is June 30th.In its first year of business Chedacorn had a net income of $243,750.For its years ended June 30,2016 and 2017,its second and third years of operation,Chedacorn reported net income of $472,500 and $560,000 respectively.In its first year Chedacorn did not pay any dividends,but in fiscal 2016 it paid $62,500 in dividends and in 2017 it paid $100,000 in dividends.
Answer: 11ea83d4_69ea_75f5_b139_939a9a7d5d97_TB5519_00_TB5519_00 11ea83d4_69ea_9d06_b139_9783e3b2db9b_TB5519_00_TB5519_00
Note: To solve the exercise,retained earnings on July 1,2016 must be calculated.This amount is $243,750 + $472,500 - $62,500.
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4
Chapter 3: Accrual Accounting and the Financial Statements
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144 Verified Questions
144 Flashcards
Source URL: https://quizplus.com/quiz/69191
Sample Questions
Q1) On a cash flow statement,closing entries will:
A) be shown in the operating activities
B) be shown in the investing activities
C) be shown in the financing activities
D) not appear on the statement
Answer: D
Q2) On June 1,2017,Destiny Ltd.received $3,600 for services to be performed evenly over the next twelve months.The adjusting entry on December 31,2017,would include a:
A) debit to Cash for $3,600
B) debit to Service Revenue for $1,500
C) debit to Unearned Service Revenue for $1,500
D) debit to Unearned Service Revenue for $2,100
Answer: D
Q3) The closing entry made for dividends would include:
A) a debit to Dividends and a credit to net income
B) a debit to Retained Earnings and a credit to Dividends
C) a debit to net income and a credit to Dividends
D) a debit to Dividends and a credit to Retained Earnings
Answer: B
Page 5
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Chapter 4: Cash and Receivables
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155 Verified Questions
155 Flashcards
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Sample Questions
Q1) When preparing a bank reconciliation,which of the following items would be subtracted from the bank balance on the bank statement?
A) deposits in transit
B) bank service charges
C) EFT cash payments
D) outstanding cheques
Q2) After a customer's account has been written off under the allowance method,the customer sends the company the amount owed.Before the receipt of cash can be recorded,the company must first:
A) debit Allowance for Uncollectible Accounts
B) credit Bad Debt Expense
C) debit Accounts Receivable
D) credit Accounts Receivable
Q3) The Bad Debt Expense account is classified:
A) as a contra-asset account
B) as part of cost of goods sold
C) as the cost to the seller of extending credit
D) deducted from Accounts Receivable account on the balance sheet
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6
Chapter 5: Inventory and Cost of Goods Sold
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104 Verified Questions
104 Flashcards
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Sample Questions
Q1) All of the following are deducted from the purchase price of inventory in determining cost of goods sold except:
A) purchase returns
B) purchase allowances
C) freight in
D) purchase discounts
Q2) Victory Stables had sales and cost of sales of $600,000 and $450,000 respectively in 2017.The company had shareholders equity of $750,000 and its assets were $1,125,000.Calculate the company's gross margin and gross profit percentage for 2017.
Q3) Inventory errors counter balance in two consecutive periods.
A)True
B)False
Q4) The gross margin rate is equal to:
A) net sales revenue minus cost of goods sold
B) gross margin divided by net sales revenue
C) net sales revenue minus gross margin on sales
D) cost of goods sold divided by net sales revenue
Q5) State some guidelines a company's management could use to determine the most desirable inventory costing method.
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Chapter 6: Property, plant, and Equipment, and Intangible Assets
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136 Verified Questions
136 Flashcards
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Sample Questions
Q1) On January 2,2016,McNally's Extra Corporation acquired equipment for $120,000.The estimated life of the equipment is 5 years or 20,000 hours.The estimated residual value is $20,000.What is the balance in Accumulated Depreciation on December 31,2017,if McNally's Extra Corporation uses the double-declining-balance method of depreciation?
A) $23,200
B) $36,000
C) $43,200
D) $76,800
Q2) A revision of an estimate which extends the asset's useful life:
A) is ignored until the last year of the asset's life
B) requires restatement of prior years' financial statements
C) increases depreciation expense and decreases owners' equity
D) decreases depreciation expense and increases owners' equity
Q3) Which of the following depreciation methods best fits those assets that tend to wear out before they become obsolete?
A) depletion method
B) straight-line method
C) double-declining-balance method
D) units-of-production method
Page 8
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Chapter 7: Investments and the Time Value of Money
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102 Verified Questions
102 Flashcards
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Sample Questions
Q1) Cooper Company has purchased equipment that requires annual payments of $18,000 to be paid at the end of each of the next 6 years.The discount rate is 8%.The present value of $1 for six periods at 8% is 0.630.The present value of an ordinary annuity of $1 for six periods at 8% is 4.623.What amount will be assigned to the equipment? (Round your final answer to the nearest dollar.)
A) $3,894
B) $83,214
C) $94,554
D) $108,000
Q2) On January 1,2015 Blue Cat Corporation purchased 1,000 shares (5%)of Mike Mouse Co.for $14,000 as a long term investment.On May 31,2016 Mike Mouse pays a $0.70 dividend.At year end December 31,2014 Mike Mouse shares are trading at $15 per share.Blue Cat then sells their investment in Mike Mouse Co for $13,500 on February 20,2017.Prepare Blue Cat's journal entries for 2015,2016 and 2017.
Q3) Investments in long-term bonds are shown on the balance sheet at their current market value.
A)True
B)False
Q4) Briefly explain the meaning of the term "present value."
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Chapter 8: Liabilities
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103 Verified Questions
103 Flashcards
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Sample Questions
Q1) An example of a post retirement benefit provided by a company is medical insurance for retired workers.
A)True
B)False
Q2) A $10,000 bond quoted at 103 1/2 is selling for:
A) $9,662
B) $9,897
C) $10,104
D) $10,350
Q3) Under the effective-interest method of amortization,the cash payment on each interest payment date will:
A) remain the same for each interest period
B) decrease if bonds are issued at a premium
C) increase if bonds are issued at par
D) increase if bonds are issued at a discount
Q4) Failure to record an accrued liability causes a company to:
A) overstate assets
B) overstate expenses
C) overstate liabilities
D) overstate owners' equity
Page 10
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Chapter 9: Shareholders Equity
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119 Verified Questions
119 Flashcards
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Sample Questions
Q1) Assets other than cash should be recorded at their current fair market values when received from the issuance of shares.
A)True
B)False
Q2) The term outstanding shares refers to the maximum number of shares a corporation is allowed to distribute to shareholders.
A)True B)False
Q3) Quo Corporation issues 100 common shares for $12 per share.This transaction will include a:
A) credit to Retained Earnings for $1,200
B) credit to Contributed Surplus for $1,200
C) debit to Common Shares for $1,200
D) credit to Common Shares for $1,200
Q4) Name several accounts that would appear in the shareholders' equity section of a balance sheet.
Q5) List several characteristics of a corporation.Indicate,wherever appropriate,if the characteristic is an advantage or a disadvantage of the corporate form of business.
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Chapter 10: The Statement of Cash Flows
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133 Verified Questions
133 Flashcards
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Sample Questions
Q1) The sale of repurchased shares is a(n)________ on a statement of cash flows.
A) operating activity
B) investing activity
C) financing activity
D) financing activity or an investing activity
Q2) On an indirect method statement of cash flows,a decrease in inventory would be:
A) netted against any decreases in accounts payable
B) deducted from net income
C) reflected in the investing activities section
D) added to net income
Q3) Proceeds from the issuance of shares appear in which,if any,section of the cash flow statement?
A) operating activities section
B) investing activities section
C) financing activities section
D) Proceeds from the issuance of shares do not appear in the cash flow statement.
Q4) Sometimes income and cash flow follow different patterns.
A)True
B)False
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Chapter 11: Financial Statement Analysis
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116 Verified Questions
116 Flashcards
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Sample Questions
Q1) When performing vertical analysis on a balance,the current liabilities are compared typically to total liabilities.
A)True
B)False
Q2) It is generally considered more useful to know the absolute dollar amount of change in financial statement amounts from year to year than to know the percentage change.
A)True
B)False
Q3) Briefly state the information provided by the following ratios and briefly discuss how they are used in financial analysis:
a.price/earnings ratio
b.dividend yield
Q4) The form of analysis that looks at trend percentages over a representative period is known as:
A) trend analysis, which is considered a form of horizontal analysis
B) trend analysis, which is considered a form of vertical analysis
C) ratio analysis
D) economic value added analysis
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