Accounting II
Textbook Exam Questions
Course Introduction
Accounting II builds upon the foundational principles covered in introductory accounting, delving deeper into topics such as the accounting cycle, financial statement analysis, and the measurement and reporting of assets, liabilities, and equity. The course covers more advanced accounting concepts, including inventory valuation methods, depreciation, internal controls, and the preparation of statements for partnerships and corporations. Emphasis is placed on interpreting financial data to support decision-making, understanding regulatory frameworks, and applying accounting standards to both real-world and hypothetical scenarios. By the end of the course, students will have developed practical skills for handling more complex accounting tasks and an enhanced ability to analyze organizational financial health.
Recommended Textbook
Financial and Managerial Accounting 11th Edition by Carl S. Warren
Available Study Resources on Quizplus
15 Chapters
2679 Verified Questions
2679 Flashcards
Source URL: https://quizplus.com/study-set/3939
Page 2
Chapter 1: Introduction to Accounting and Business
Available Study Resources on Quizplus for this Chatper
194 Verified Questions
194 Flashcards
Source URL: https://quizplus.com/quiz/78548
Sample Questions
Q1) Discuss the characteristics of a LLC (Limited liability company).
Answer: A Limited liability company (LLC) combines the attributes of a partnership and a corporation. It is often used as an alternative to a partnership because it has tax and legal liability advantages for owners.
Q2) If total liabilities decreased by $55,000 during a period of time and owner's equity increased by $60,000 during the same period, the amount and direction (increase or decrease) of the period's change in total assets is
A) $115,000 increase
B) $5,000 increase
C) $5,000 decrease
D) $115,000 decrease
Answer: B
Q3) Clifford Moore purchased $15,000 of Star Tech stock for cash. Star Tech would
A) increase Assets (Cash) and increase Liabilities (Accounts Payable)
B) increase Assets (Cash) and increase Stockholders' Equity (Capital Stock)
C) Increase Assets (Accounts Receivable) and decrease Liabilities (Accounts Payable)
D) Increase Assets (Cash) and increase Assets (Accounts Receivable)
Answer: B
To view all questions and flashcards with answers, click on the resource link above. Page 3
Chapter 2: Analyzing Transactions
Available Study Resources on Quizplus for this Chatper
222 Verified Questions
222 Flashcards
Source URL: https://quizplus.com/quiz/78541
Sample Questions
Q1) Which of the following errors would cause the trial balance totals to be unequal?
A) A transaction was not posted.
B) A payment of $67 for insurance was posted as a debit of $42 to Prepaid Insurance and a credit of $42 to Cash.
C) A payment of $1,311 to a creditor was posted as a debit of $3,111 to Accounts Payable and a debit of $311 to Accounts Receivable.
D) Cash received from customers on account was posted as a debit of $680 to Cash and a credit of $680 to Accounts Payable.
Answer: C
Q2) An account has three parts to it; a title, an increase side, and a decrease side. A)True
B)False
Answer: True
Q3) Debiting the cash account will increase the account.
A)True
B)False
Answer: True
To view all questions and flashcards with answers, click on the resource link above. Page 4
Chapter 3: The Adjusting Process
Available Study Resources on Quizplus for this Chatper
179 Verified Questions
179 Flashcards
Source URL: https://quizplus.com/quiz/78540
Sample Questions
Q1) Prepaid expenses are eventually expected to
A) become expenses when their future economic value expires.
B) become revenues when services are performed.
C) become expenses in the period when they are paid.
D) become revenues when the liability is no longer owed.
Answer: A
Q2) Accumulated Depreciation is reported on the income statement.
A)True
B)False
Answer: False
Q3) Vertical analysis compares each item in a financial statement with a total amount from the same statement.
A)True
B)False
Answer: True
Q4) Accruals are needed when an unrecorded expense has been incurred or an unrecorded revenue has been earned.
A)True
B)False
Answer: True
To view all questions and flashcards with answers, click on the resource link above. Page 5
Chapter 4: Completing the Accounting Cycle
Available Study Resources on Quizplus for this Chatper
196 Verified Questions
196 Flashcards
Source URL: https://quizplus.com/quiz/78539
Sample
Questions
Q1) On September 1, the company pays rent for twelve months in advance and debits an asset account. At year end, the adjusting entry on the work sheet would
A) increase an expense account
B) decrease a liability account
C) increase an asset account
D) decrease an expense account
Q2) Deferred expenses that benefit a relatively short period of time are listed on the balance sheet as current assets.
A)True
B)False
Q3) The chart of accounts, the journal, and the ledger are essential parts of the accounting system.
A)True
B)False
Q4) If working papers are not considered part of the formal accounting records, then why are they used?
Q5) All companies must use a calendar year as their fiscal year.
A)True
B)False
To view all questions and flashcards with answers, click on the resource link above. Page 6
Chapter 5: Accounting for Merchandising Businesses
Available Study Resources on Quizplus for this Chatper
221 Verified Questions
221 Flashcards
Source URL: https://quizplus.com/quiz/78538
Sample Questions
Q1) When comparing a retail business to a service business, the financial statement that changes the most is the
A) balance sheet
B) income statement
C) retained earnings statement
D) statement of cash flows
Q2) In a merchandise business, sales minus operating expenses equals net income.
A)True
B)False
Q3) Using a perpetual inventory system, the entry to record the purchase of $30,000 of merchandise on account would include a
A) debit to Accounts Payable
B) debit to Merchandise Inventory
C) credit to Merchandise Inventory
D) credit to Sales
Q4) On March 29th, customers who owe $10,500.00 for purchases made on Sonic Sales Company credit cards submit payments of $4,250.00. Journalize this event.
Q5) Based upon the following data, determine the cost of merchandise sold for August.
To view all questions and flashcards with answers, click on the resource link above. Page 7
Chapter 6: Inventories
Available Study Resources on Quizplus for this Chatper
167 Verified Questions
167 Flashcards
Source URL: https://quizplus.com/quiz/78537
Sample Questions
Q1) When using a perpetual inventory system, the journal entry to record the cost of merchandise sold is:
A) debit Cost of Merchandise Sold; credit Sales
B) debit Cost of Merchandise Sold; credit Merchandise Inventory
C) debit Merchandise Inventory; credit Cost of Merchandise Sold
D) No journal entry is made to record the cost of merchandise sold.
Q2) The method of computing inventory that uses records of the selling prices of the merchandise is called
A) retail method
B) last-in, first-out
C) first-in, first-out
D) average cost
Q3) All of the following are reasons to use an estimated method of costing inventory except:
A) Perpetual inventory records are not maintained.
B) Purchase records are not maintained.
C) A disaster has destroyed the inventory records and the inventory.
D) Interim financial statements are required but physical inventory is only taken at the end of the financial accounting period.
To view all questions and flashcards with answers, click on the resource link above.
Page 8
Chapter 7: Sarbanes-Oxley, Internal Control, and Cash
Available Study Resources on Quizplus for this Chatper
174 Verified Questions
174 Flashcards
Source URL: https://quizplus.com/quiz/78536
Sample Questions
Q1) The control environment in an internal control structure is the attitude and awareness of internal control by all employees.
A)True
B)False
Q2) The bank reconciliation is an important part of the system of internal controls.
A)True
B)False
Q3) During 2010, Tempo Inc. has monthly cash expenses of $120,000. On December 31, 2010, its cash balance is $1,860,000. The ratio of cash to monthly cash expenses is A) 6.5
B) 15.5
C) 77.4
D) 12.0
Q4) Which of the following would not be included with the Cash and Equivalents on the Balance Sheet?
A) Commercial Paper
B) Short-Term Receivables
C) Certificates of Deposit
D) Money Market Mutual Funds
To view all questions and flashcards with answers, click on the resource link above. Page 9
Chapter 8: Receivables
Available Study Resources on Quizplus for this Chatper
147 Verified Questions
147 Flashcards
Source URL: https://quizplus.com/quiz/78535
Sample Questions
Q1) The journal entry to record a note received from a customer to apply on account is
A) debit Notes Receivable; credit Accounts Receivable
B) debit Accounts Receivable; credit Notes Receivable
C) debit Cash; credit Notes Receivable
D) debit Notes Receivable; credit Notes Payable
Q2) Harper Company lends Hewell Company $40,000 on March 1, accepting a four-month, 6% interest note. Harper Company prepares financial statements on March 31. What adjusting entry should be made before the financial statements can be prepared?
A) Cash 200 Interest Revenue 200
B) Interest Receivable 800 Interest Revenue 800
C) Interest Receivable 200 Interest Revenue 200
D) Note Receivable 40,000 Cash 40,000
Q3) The term "receivables" includes all
A) money claims against other entities.
B) merchandise to be collected from individuals or companies.
C) cash to be paid to creditors.
D) cash to be paid to debtors.
To view all questions and flashcards with answers, click on the resource link above.
Chapter 9: Fixed Assets and Intangible Assets
Available Study Resources on Quizplus for this Chatper
175 Verified Questions
175 Flashcards
Source URL: https://quizplus.com/quiz/78534
Sample Questions
Q1) On October 1, Sebastian Company acquired new equipment with a fair market value of $458,000. Sebastian received a trade-in allowance of $92,000 on the old equipment of a similar type and paid cash of $366,000. The following information about the old equipment is obtained from the account in the equipment ledger: Cost, $336,000; accumulated depreciation on December 31, the end of the preceding fiscal year, $220,000; annual depreciation, $20,000. Assuming the exchange has commercial substance, journalize the entries to record: (a) the current depreciation of the old equipment to the date of trade-in and (b) the exchange transaction on October 1.
Q2) Which of the following is true?
A) If using the double-declining-balance the total amount of depreciation expense during the life of the asset will be the highest.
B) If using the units-of-production method, it is possible to depreciate more than the depreciable cost.
C) If using the straight line method, the amount of depreciation expense during the first year is higher than that of the double-declining-balance.
D) Regardless of the depreciation method, the amount of total depreciation expense during the life of the asset will be the same.
To view all questions and flashcards with answers, click on the resource link above. Page 11
Chapter 10: Current Liabilities and Payroll
Available Study Resources on Quizplus for this Chatper
172 Verified Questions
172 Flashcards
Source URL: https://quizplus.com/quiz/78547
Sample Questions
Q1) An employee receives an hourly rate of $15, with time and a half for all hours worked in excess of 40 during the week. Payroll data for the current week are as follows: hours worked, 46; federal income tax withheld, $120; cumulative earnings for the year prior to this week, $5,500; Social security tax rate, 6% on maximum of $100,000; and Medicare tax rate, 1.5% on all earnings; state unemployment compensation tax, 3.4% on the first $7,000; federal unemployment compensation tax, .8% on the first $7,000. Prepare the journal entries to record the salaries expense and the employer payroll tax expense.
Q2) Mobile Co. issued a $45,000, 60-day, discounted note to Guarantee Bank. The discount rate is 6%. At maturity, assuming a 360-day year, the borrower will pay:
A) $45,450
B) $42,300
C) $45,000
D) $44,550
Q3) In order to be a recorded contingent liability, the liability must be possible and easily estimated.
A)True
B)False
Q4) List five internal controls that relate directly to payroll.
To view all questions and flashcards with answers, click on the resource link above.
Page 12
Chapter 11: Corporations: Organization, Stock Transactions, and Dividends
Available Study Resources on Quizplus for this Chatper
168 Verified Questions
168 Flashcards
Source URL: https://quizplus.com/quiz/78546
Sample Questions
Q1) On January 1, 20xx, Swenson Corporation had 40,000 shares of $10 par value common stock issued and outstanding. All 40,000 shares had been issued in a prior period at $20.00 per share. On February 1, 20xx, Swenson purchased 2,000 shares of treasury stock for $24 per share and later sold the treasury shares for $21 per share on March 1, 20xx. The journal entry to record the purchase of the treasury shares on February 1, 20xx, would include a
A) credit to Treasury Stock for $48,000.
B) debit to Treasury Stock for $48,000.
C) debit to a loss account for $6,000
D) credit to a gain account for $6,000.
Q2) Double taxation is a disadvantage of a corporation because the same party has to pay taxes twice on the income.
A)True
B)False
Q3) Earnings per share
A) is the net income per common share
B) must be reported by publicly traded companies
C) helps compare companies of different sizes
D) all of the above
Page 13
To view all questions and flashcards with answers, click on the resource link above.
Chapter 12: Long-Term Liabilities: Bonds and Notes
Available Study Resources on Quizplus for this Chatper
181 Verified Questions
181 Flashcards
Source URL: https://quizplus.com/quiz/78545
Sample Questions
Q1) The times interest earned ratio is calculated by dividing Bonds Payable by Interest Expense.
A)True
B)False
Q2) At 12/31/2009, the cash and securities held in a sinking fund to redeem bonds in 2011 are classified on the balance sheet as current assets.
A)True
B)False
Q3) When the effective-interest method is used, the amortization of the bond premium
A) increases interest expense each period
B) decreases interest expense each period
C) increases interest expense in some periods and decreases interest expense in other periods
D) has no effect on the interest expense in any period
Q4) The present value of $5,000 to be received in 4 years at a market rate of interest of 6% compounded annually is $3,636.30.
A)True
B)False
To view all questions and flashcards with answers, click on the resource link above. Page 14
Chapter 13: Investments and Fair Value Accounting
Available Study Resources on Quizplus for this Chatper
137 Verified Questions
137 Flashcards
Source URL: https://quizplus.com/quiz/78544
Sample Questions
Q1) Newville Corporation reported net income of $50,000 in 2012. They have 10,000 shares of $100 par, 6% preferred stock and 50,000 shares of $2 common stock outstanding. During 2012 Newville paid the preferred stockholder's a $6 per share dividend and also paid $20,000 to common shareholders. The market value of Newville's stock is: Preferred - $105 and Common - $10.
(1) Calculate Newville's dividend yield.
(2) Why does the dividend yield vary widely across firms?
Q2) Any gains or losses on the sale of bonds normally would be reported in the Other Income (Loss) section of the income statement.
A)True
B)False
Q3) Financial statements in which financial data for two or more companies are combined as a single entity are called
A) conventional statements
B) consolidated statements
C) audited statements
D) constitutional statements
Q4) Compare and contrast why companies invest cash in short-term temporary investments vs. long-term investments.
To view all questions and flashcards with answers, click on the resource link above. Page 15
Chapter 14: Statement of Cash Flows
Available Study Resources on Quizplus for this Chatper
162 Verified Questions
162 Flashcards
Source URL: https://quizplus.com/quiz/78543
Sample Questions
Q1) Free cash flow is the measure of operating cash flow available for corporate purposes after providing sufficient fixed asset additions to maintain current productive capacity and dividends.
A)True
B)False
Q2) Cost of merchandise sold reported on the income statement was $155,000. The accounts payable balance increased $5,000, and the inventory balance increased by $11,000 over the year. Determine the amount of cash paid for merchandise?
Q3) Cash flows from investing activities, as part of the statement of cash flows, include payments for the acquisition of fixed assets.
A)True
B)False
Q4) Free cash flow is cash from operations, less cash for A) dividends and cash for fixed assets needed to maintain productivity
B) dividends and cash to redeem bonds payable
C) fixed assets needed to maintain productivity
D) dividends, cash for fixed assets needed to maintain productivity, and cash to redeem bonds payable
To view all questions and flashcards with answers, click on the resource link above.
16
Chapter 15: Financial Statement Analysis
Available Study Resources on Quizplus for this Chatper
184 Verified Questions
184 Flashcards
Source URL: https://quizplus.com/quiz/78542
Sample Questions
Q1) In 2012 Robert Corporation had net income of $250,000 and paid dividends to common stockholders of $50,000. They had 50,000 shares of common stock outstanding during the entire year. Robert Corporation's common stock is selling for $50 per share on the New York Stock Exchange. Robert Corporation's price-earnings ratio is
A) 10 times.
B) 5 times.
C) 2 times.
D) 8 times.
Q2) The report on internal control required by the Sarbanes-Oxley Act of 2002 may be prepared by either management or the company's auditors.
A)True
B)False
Q3) A financial statement showing each item on the statement as a percentage of one key item on the statement is called common-sized financial statements.
A)True
B)False
Q4) Why would you compare or not compare Coca-Cola and Pepsi-Cola (PepsiCo) as companies to each other?
To view all questions and flashcards with answers, click on the resource link above.
Page 17