Accounting II
Exam Answer Key
Course Introduction
Accounting II builds upon the foundational principles introduced in Accounting I, delving deeper into the concepts and practices of financial accounting and reporting. This course covers topics such as the preparation and analysis of financial statements, accounting for partnerships and corporations, inventory valuation methods, long-term assets and liabilities, and the statement of cash flows. Students also explore managerial accounting topics, including budgeting, cost systems, and performance evaluation. Through a combination of theoretical frameworks and practical applications, Accounting II equips students with the skills necessary for advanced study in accounting and effective participation in financial decision-making processes.
Recommended Textbook
Financial Accounting 3rd Edition by Robert Kemp
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12 Chapters
1837 Verified Questions
1837 Flashcards
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Page 2
Chapter 1: Business, Accounting, and You
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148 Verified Questions
148 Flashcards
Source URL: https://quizplus.com/quiz/65522
Sample Questions
Q1) Dividends are part of:
A)sales.
B)expenses.
C)Retained Earnings.
D)Assets.
Answer: C
Q2) Liabilities represent:
A)items owned by the company.
B)economic resources of the company.
C)earnings kept in the business.
D)amounts owed to third parties.
Answer: D
Q3) Financial information that is verifiable violates the principle of objectivity.
A)True
B)False
Answer: False
Q4) Liabilities are obligations owed to third parties.
A)True
B)False
Answer: True
Page 3
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Chapter 2: Analyzing and Recording Business Transactions
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146 Flashcards
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Sample Questions
Q1) A T-account has which of the following three major parts?
A)A debit side,a credit side,and a balance
B)A debit side,a credit side,and a total column
C)A title,a current date,and a balance
D)A title,a debit side,and a credit side
Answer: D
Q2) A business generally has fewer liability accounts than asset accounts.
A)True
B)False
Answer: True
Q3) The difference between the total debits and total credits of an account is called a: A)trial balance.
B)sub-total.
C)ruling.
D)balance.
Answer: D
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Chapter 3: Adjusting and Closing Entries
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149 Flashcards
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Sample Questions
Q1) Accounts Receivable and Accounts Payable are examples of accruals.
A)True
B)False
Answer: True
Q2) Which of the following accounts would NOT appear on a post-closing trial balance?
A)Common Stock
B)Dividends
C)Sales tax Payable
D)Accounts Receivable
Answer: B
Q3) The entry to close the Dividend account includes:
A)a debit to Common Stock and a credit to Dividends.
B)a debit to Dividends and a credit to Retained Earnings.
C)a debit to Dividends and a credit to Common Stock.
D)a debit to Retained Earnings and a credit to Dividends.
Answer: D
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Chapter 4: Accounting for a Merchandising Business
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Sample Questions
Q1) Which of the following would NOT be classified as a service business?
A)Graham's Lawn Mowing
B)Tonya's Tax Service
C)Rick's Pet Walking
D)Charla's Fashion Boutique
Q2) If damaged goods are received by the merchandiser and are kept with a reduction in price,the account to be credited by the merchandiser for the reduction in price under a perpetual inventory system is:
A)Inventory.
B)Accounts Payable.
C)Returns.
D)Cash.
Q3) A discount offered as an inducement for prompt payment of an invoice is called a(n):
A)invoice discount.
B)purchase discount.
C)early discount.
D)cash discount.
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6
Chapter 5: Inventory
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152 Flashcards
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Sample Questions
Q1) The ending inventory of one year becomes the beginning inventory of the next year.
A)True
B)False
Q2) New technology,like the latest cell phones and HDTV,would probably be costed using the:
A)LIFO method of inventory costing.
B)FIFO method of inventory costing.
C)moving average method of inventory costing.
D)any method as the physical flow and the cost flow are different.
Q3) The ________ estimates inventory by using the format for cost of goods sold.
A)FIFO method
B)LIFO method
C)gross profit method
D)average cost method
Q4) The journal entries to record the purchases of inventory on account are different based on the costing method chosen.
A)True
B)False
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Chapter 6: The Challenges of Accounting: Standards, internal
Control, audits, fraud, and Ethics
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139 Verified Questions
139 Flashcards
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Sample Questions
Q1) A company may be limited in their internal control procedures because the cost of hiring enough people to implement the procedures:
A)outweighs the benefits of the system.
B)has nothing to do with the effectiveness of the internal control system.
C)can prevent collusion.
D)can limit employee distractions.
Q2) The delegation of authority and responsibility is part of the control environment of an internal control system.
A)True
B)False
Q3) Which of the following would NOT be considered part of monitoring in an internal control system?
A)Having an audit trail
B)Assessing performance of the system
C)Locating weakness of the system
D)Management involvement
Q4) Employees conduct external audits of a business.
A)True
B)False
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Chapter 7: Cash and Receivables
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166 Flashcards
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Sample Questions
Q1) Accounts Receivable should be reported at ________ in the ________ section of a company's Balance Sheet.
A)Market value;Long-Term Assets
B)Net realizable value;Long-Term Assets
C)Net realizable value;Current Assets
D)Market value;Current Assets
Q2) The most common types of financial institution credit cards are MasterCard and Visa.
A)True
B)False
Q3) Most financial institutions charge the retailer a service fee that enables the retailer to accept the credit cards as payment on merchandise.
A)True
B)False
Q4) The maturity value is the sum of the principal plus the interest due at maturity. A)True
B)False
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Chapter 8: Long-Term and Other Assets
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Sample Questions
Q1) Sydney's Siding made a basket purchase involving four assets.Their market values were A: $45,000;B: $37,500;C: $41,000;and D: $53,000.The price Sydney's paid for the four assets was $160,000.What percentage of the $160,000 price would be allocated to asset C to the nearest one-tenth of a percent?
A)30.0%
B)25.5%
C)23.2%
D)21.2%
Q2) Upgrading the RAM on a computer would be an example of a(n):
A)betterment.
B)extraordinary repair.
C)ordinary repair.
D)capital expense.
Q3) The cost of furniture and fixtures,such as desks,chairs and other items,includes its basic cost plus all other costs to ready the asset for its intended use.
A)True
B)False
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Chapter 9: Current Liabilities and Long-Term Debt
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Sample Questions
Q1) The journal entry to record $300,000 of bonds that were issued at 107 would be to:
A)debit Cash,$321,000;credit Bonds payable,$321,000.
B)debit Cash,$321,000;credit Bonds payable,$300,000;credit Premium on bonds payable,$21,000.
C)debit Cash,$300,000;credit Bonds payable,$300,000.
D)debit Cash,$300,000;debit Discount on bonds payable,$21,000;credit Bonds payable,$321,000.
Q2) In general it is better to use current liabilities to finance current assets and long-term debt to finance long-term assets.
A)True
B)False
Q3) The maximum tax credit an employer can get for FUTA if they pay unemployment taxes to a state is:
A)6)20%.
B)5)40%.
C)0)80%.
D)7)65%.
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Chapter 10: Corporations: Paid-In Capital and Retained Earnings
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Sample Questions
Q1) If a company has 3,000 shares authorized and 2,000 have been issued,the annual dividends on $18 par 3% preferred stock is $1,620.
A)True
B)False
Q2) Which of the following is TRUE regarding treasury stock?
A)Treasury Stock has a debit balance.
B)Treasury Stock is a contra-asset account.
C)Treasury Stock is recorded at cost.
D)Both A and C are true of Treasury Stock.
Q3) The declaration of a stock dividend:
A)creates a liability.
B)creates an asset.
C)creates a revenue.
D)does not create a liability.
Q4) Cumulative common stock will pay dividends in arrears.
A)True B)False
Q5) Corporations declare cash dividends from Retained Earnings.
A)True
B)False
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Chapter 11: The Statement of Cash Flows
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Sample Questions
Q1) Goldman Company's Accounts Receivable decreased by $25,000 and its Accounts Payable increased by $12,000.What is the net effect on cash from operations under the indirect method?
A)+$37,000
B)-$13,000
C)-$37,000
D)+$13,000
Q2) The Supplies balance has decreased during the year.How would this affect the Statement of Cash Flows operations section under the indirect method?
A)It is already included in the net income.
B)It would be added back to net income.
C)It would be subtracted from net income.
D)It does not affect the cash flow from operations.
Q3) One formula for determining cash collections from customers is to take Sales plus the increase in Accounts Receivable.
A)True
B)False
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Chapter 12: Financial Statement Analysis
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Sample Questions
Q1) Revere,Inc.reported $23,400 in A/R in 2014 and $25,100 in A/R in 2013.The percentage change in A/R from 2013 to 2014 was:
A)+6.77%.
B)+7.26%.
C)-6.77%.
D)-7.26%.
Q2) Island Industries,Inc.reported Net Sales of $306,000,Cost of Goods Sold of $192,600,Operating Expenses of $58,900,and Income Tax Expense of 12,300.Island Industries' net income percentage was:
A)37.06.
B)13.79.
C)62.94.
D)17.81.
Q3) Franklin Fisheries had extraordinary losses of $150,000.If their corporate tax rate is 30%,at what amount will the losses be shown on the Income Statement?
A)$150,000
B)$105,000
C)$45,000
D)Not enough information is given to answer the question.
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Page 14