Basic Accounting Exam Solutions
Course Introduction
Basic Accounting introduces students to the foundational principles and practices of accounting, focusing on the systematic recording, classification, and interpretation of financial transactions. This course covers essential topics such as the accounting cycle, preparation of financial statements, and understanding debits and credits. Students will gain practical skills in bookkeeping, learn to use the double-entry accounting system, and develop an understanding of the importance of accuracy and ethics in financial reporting. Emphasis is placed on understanding how accounting information is used by managers, investors, and other stakeholders to make informed business decisions.
Recommended Textbook Horngrens Accounting The Financial Chapters 12th Edition by Tracie L. Miller-Nobles
Available Study Resources on Quizplus
17 Chapters
3678 Verified Questions
3678 Flashcards
Source URL: https://quizplus.com/study-set/3741 Page 2
Chapter 1: Accounting and the Business Environment
Available Study Resources on Quizplus for this Chatper
246 Verified Questions
246 Flashcards
Source URL: https://quizplus.com/quiz/74576
Sample Questions
Q1) In a statement of owner's equity,decreases in Owner,Capital result from ________.
A)gains on sale of land
B)net losses
C)net income
D)revenues earned Answer: B
Q2) Financial analysts perform reviews of companies to ensure compliance to rules and regulations.
A)True
B)False Answer: False
Q3) The balance sheet is prepared after the statement of owner's equity.
A)True
B)False Answer: True
Q4) The balance sheet shows whether or not a business is profitable.
A)True
B)False Answer: False
To view all questions and flashcards with answers, click on the resource link above. Page 3
Chapter 2: Recording Business Transactions
Available Study Resources on Quizplus for this Chatper
219 Verified Questions
219 Flashcards
Source URL: https://quizplus.com/quiz/74567
Sample Questions
Q1) The T-account is a summary device that is shaped like a capital T with debits posted on the right side of the vertical line and credits posted on the left side of the vertical line.
A)True
B)False
Answer: False
Q2) A trial balance summarizes the ledger by listing all the accounts with their balances at a point in time.
A)True
B)False
Answer: True
Q3) Which one of the following account groups normally has a debit balance?
A)assets and expenses
B)revenues and expenses
C)liabilities and revenues
D)assets and liabilities
Answer: A
Q4) Employees worked and a business paid salaries of $6,000 in cash.Record the transaction in the journal.
Answer: 11ea8a75_426f_c88b_a2a1_9feb19bf032f_TB6701_00
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
225 Verified Questions
225 Flashcards
Source URL: https://quizplus.com/quiz/74566
Sample Questions
Q1) Adjusting entries do not update balance sheet accounts.
A)True
B)False Answer: False
Q2) Accumulated Depreciation is a(n)________ account and carries a normal ________ balance.
A)revenue;debit
B)expense;debit
C)contra asset;credit
D)liability;credit Answer: C
Q3) Armstrong Services has a weekly payroll of $50,000.December 31 falls on Thursday and Armstrong will pay its employees the following Monday (January 4)for the previous full week.Assume that the company has a five-day workweek and has an unadjusted balance in Salaries Expense of $845,000 at December 31.Prepare the January 4 journal entry.Reversing entries are not made.
Answer: 11ea8a75_425b_7cdd_a2a1_ff99ee8ab2c7_TB6701_00
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
208 Verified Questions
208 Flashcards
Source URL: https://quizplus.com/quiz/74565
Sample Questions
Q1) Reversing entries are used in conjunction with ________.
A)accrual-type adjustments
B)deferred revenues
C)deferred expenses
D)Unearned Revenue and Prepaid Rent
Q2) Salaries Payable,Accounts Payable,and Unearned Revenue are examples of ________.
A)short-term investments
B)fixed assets
C)current liabilities
D)long-term liabilities
Q3) Which of the following would be considered a long-term asset?
A)Accounts Payable
B)Land
C)Office Supplies
D)Owner,Capital
Q4) A balance sheet prepared in the account form lists the assets at the top and the liabilities and owner's equity are positioned below the assets.
A)True
B)False
Page 6
Q5) List the steps of the accounting cycle that take place during the period.
To view all questions and flashcards with answers, click on the resource link above.
Chapter 5: Merchandising Operations
Available Study Resources on Quizplus for this Chatper
301 Verified Questions
301 Flashcards
Source URL: https://quizplus.com/quiz/74564
Sample Questions
Q1) Extreme Discount Merchandisers has purchased merchandise on account and paid $450 for freight in.Prepare the journal entry for freight paid.(Assume a perpetual inventory system. )
Q2) Regarding a periodic inventory system,which of the following statements is incorrect?
A)The periodic inventory system is normally used for relatively expensive goods.
B)Restaurants and small retail stores normally use the periodic inventory system.
C)Periodic inventory systems are becoming less and less popular.
D)The physical count of inventory is required in order to determine the quantities on hand.
Q3) Cafeteria Supply returned 2 cases of defective warming trays to the vendor for an amount of $600.Prepare the journal entry for this transaction.Cafeteria Supply uses a perpetual inventory system and purchased the cases on account.Omit explanation.
Q4) Sales Revenue is recorded net of sales discounts,so it is labeled Net Sales Revenue on the income statement.
A)True
B)False
Q5) Prepare the journal entry to close the expense accounts.Omit explanation.
To view all questions and flashcards with answers, click on the resource link above.
Page 7
Chapter 6: Merchandise Inventory
Available Study Resources on Quizplus for this Chatper
199 Verified Questions
199 Flashcards
Source URL: https://quizplus.com/quiz/74563
Sample Questions
Q1) Using the LIFO method of inventory valuation will always produce the same results for cost of goods sold and ending inventory whether a company uses perpetual or periodic inventory costing methods.
A)True
B)False
Q2) The last-in,first-out (LIFO)costing system may or may not match the physical flow of goods.
A)True
B)False
Q3) Which of the following inventory costing methods uses the costs of the oldest purchases to calculate the value of the ending inventory?
A)specific identification
B)weighted-average
C)last-in,first-out
D)first-in,first-out
Q4) Weighted average cost per unit is determined by dividing the cost of goods available for sale by the number of units available.
A)True
B)False
To view all questions and flashcards with answers, click on the resource link above. Page 8
Chapter 7: Accounting Information Systems
Available Study Resources on Quizplus for this Chatper
164 Verified Questions
164 Flashcards
Source URL: https://quizplus.com/quiz/74562
Sample Questions
Q1) If there is no cash involved in a business transaction,the transaction should be recorded in ________.
A)either the cash receipts journal or general journal
B)either the sales journal or purchases journal
C)the general journal only
D)sales journal,purchases journal,or general journal
Q2) Entries in the sales journal are posted to both the accounts receivable subsidiary ledger and the general ledger.
A)True
B)False
Q3) The ________ is a set of programs or instructions that drive the computer to perform the work desired.
A)network
B)hardware
C)software
D)router
Q4) Most small businesses have computerized all of their accounting.
A)True
B)False
Q5) List and describe two features of an effective accounting information system.
Page 9
To view all questions and flashcards with answers, click on the resource link above.
Chapter 8: Internal Control and Cash
Available Study Resources on Quizplus for this Chatper
258 Verified Questions
258 Flashcards
Source URL: https://quizplus.com/quiz/74561
Sample Questions
Q1) A company received a bank statement showing a balance of $76,000.Reconciling items included outstanding checks of $2,000 and a deposit in transit of $9,100.What is the company's adjusted bank balance?
A)$64,900
B)$68,900
C)$83,100
D)$66,900
Q2) Regarding Electronic Data Interchange (EDI),which of the following statements is incorrect?
A)A manager approves the invoice,and then an electronic fund transfer sends the retailer's payment to the supplier.
B)The retailer electronically sends an invoice to the supplier.
C)EDI procedures are used for both cash payments and cash receipts in many companies.
D)When a retailer's inventory reaches a low level,the computer creates and sends an electronic purchase order to the supplier.
Q3) Strict internal controls must be implemented,regardless of the cost.
A)True
B)False
To view all questions and flashcards with answers, click on the resource link above.
Page 10
Chapter 9: Receivables
Available Study Resources on Quizplus for this Chatper
233 Verified Questions
233 Flashcards
Source URL: https://quizplus.com/quiz/74560
Sample Questions
Q1) On October 1,2019,Westfield Company sold machinery to a customer for $21,000.The customer could not pay at the time of sale,but agreed to pay 10 months later,and signed a 10-month note at 12% interest.How much interest revenue was earned during 2019? Round any intermediate calculations to two decimal places,and your final answer to the nearest dollar.
A)$660
B)$630
C)$4410
D)$2100
Q2) Businesses must estimate the amount of bad debts expense at the end of the accounting period only when using the balance sheet approaches.
A)True
B)False
Q3) For a promissory note,the entity to whom the promise of future payment is made is the ________.
A)maker of the note
B)endorser of the note
C)banker of the note
D)payee of the note
To view all questions and flashcards with answers, click on the resource link above. Page 11
Chapter 10: Plant Assets, natural Resources, and Intangibles
Available Study Resources on Quizplus for this Chatper
212 Verified Questions
212 Flashcards
Source URL: https://quizplus.com/quiz/74575
Sample Questions
Q1) According to Generally Accepted Accounting Principles,if the fair value of goodwill decreases below its book value,an impairment loss must be recorded.
A)True
B)False
Q2) The units-of-production method is used to compute depletion expense.
A)True
B)False
Q3) Discarding plant assets involves disposing of the asset for no cash.
A)True
B)False
Q4) On July 14,Jones Sporting Goods sold equipment that originally cost $50,000.After updating depreciation,the Accumulated Depreciation - Equipment had a normal balance of $44,000.The selling price of the equipment was $42,000.Jones will report a loss of $8,000.
A)True
B)False
Q5) The cost of an asset is $10,000,000,and its residual value is $100,000.Estimated useful life of the asset is four years.Prepare the schedule of depreciation using the double-declining-balance method of accounting.
To view all questions and flashcards with answers, click on the resource link above. Page 12
Chapter 11: Current Liabilities and Payroll
Available Study Resources on Quizplus for this Chatper
221 Verified Questions
221 Flashcards
Source URL: https://quizplus.com/quiz/74574
Sample Questions
Q1) Which of the following is required to be deducted from employees' paychecks?
A)federal income tax
B)SUTA
C)FUTA
D)charitable contributions
Q2) Maywood Company recently signed a $350,000,six-month note on August 22,2019.The interest rate is 7%.How much interest will be due at maturity?
A)$10,208
B)$24,500
C)$12,250
D)$8167
Q3) Which of the following is paid by the employer only?
A)OASDI tax
B)Medicare tax
C)employee income tax
D)federal unemployment tax
Q4) If the likelihood of a future event is probable and the amount of the expense can be estimated,how should the company report the contingency?
Q5) What is a contingent liability? Provide two examples of contingencies.
To view all questions and flashcards with answers, click on the resource link above. Page 13
Chapter 12: Partnerships
Available Study Resources on Quizplus for this Chatper
171 Verified Questions
171 Flashcards
Source URL: https://quizplus.com/quiz/74573
Sample Questions
Q1) Which of the following statements is TRUE of partnerships?
A)If the partners have no partnership agreement specifying how to divide profits and losses,then they share profits and losses equally.
B)It is legally required to share the profit and losses equally,irrespective of the partnership agreement.
C)The stated ratio of profit sharing needs to be approved by the SEC.
D)The profit sharing is always based on each partner's capital balances and any losses will be shared equally.
Q2) An asset received from a partner as a contribution is recorded at its historical cost.
A)True
B)False
Q3) The financial statements of a partnership are similar to the statements of a sole proprietorship.
A)True
B)False
Q4) The addition of a new partner to a firm does not dissolve the old partnership.
A)True
B)False
To view all questions and flashcards with answers, click on the resource link above. Page 14
Chapter 13: Corporations
Available Study Resources on Quizplus for this Chatper
277 Verified Questions
277 Flashcards
Source URL: https://quizplus.com/quiz/74572
Sample
Questions
Q1) Pumpkin Corporation issued 10,000 shares of common stock on January 1,2018.The stock has no par value and was issued at $17 per share.The journal entry for this transaction includes a ________.
A)debit to Cash for $170,000 and a credit to Common Stock-No-Par Value for $170,000
B)debit to Cash for $170,000 and a credit to Paid-In Capital in Excess of Par-Common for $170,000
C)credit to Cash for $170,000 and a debit to Common Stock-No-Par Value for $170,000
D)credit to Cash for $170,000,a debit to Paid-In Capital in Excess of Par-Common for $10,000,and a debit to Common Stock-No-Par Value for $160,000
Q2) Ballpark has 61,000 shares of $16.00 par common stock outstanding.Ballpark announces a stock split of 4-for-1.What is the effect of the split?
A)par stays at $16.00;total shares increase to 15,250
B)par drops to $8.00;total shares stay at 61,000
C)par drops to $4.00;total shares increase to 244,000
D)par goes to $64.00;total shares increase to 244,000
Q3) List the four basic rights of stockholders.
To view all questions and flashcards with answers, click on the resource link above. Page 15
Chapter 14: Long-Term Liabilities
Available Study Resources on Quizplus for this Chatper
207 Verified Questions
207 Flashcards
Source URL: https://quizplus.com/quiz/74571
Sample Questions
Q1) The discount on bonds payable becomes interest expense through a process of depreciation.
A)True
B)False
Q2) On January 1,2018,Brazos Company purchased equipment and signed a six-year mortgage note for $97,000 at 15%.The note will be paid in equal annual installments of $25,631,beginning January 1,2019.On January 1,2019,the journal entry to record the first installment payment will include a ________.(Round your answer to the nearest whole number. )
A)debit to Mortgage Payable for $25,631
B)debit to Interest Expense for $14,550
C)credit to Cash for $11,081
D)credit to Mortgage Payable for $97,000
Q3) Secured bonds give bondholders the right to take specified assets of the issuer if the issuer fails to pay principal or interest.
A)True
B)False
Q4) List three disadvantages of borrowing.
Q5) What does the debt to equity ratio show,and how is it calculated?
To view all questions and flashcards with answers, click on the resource link above. Page 16
Chapter 15: Investments
Available Study Resources on Quizplus for this Chatper
193 Verified Questions
193 Flashcards
Source URL: https://quizplus.com/quiz/74570
Sample Questions
Q1) Which of the following is an example of debt securities?
A)preferred stocks
B)real estate
C)common stocks
D)corporate bonds
Q2) Consolidation accounting is the way to combine the financial statements of two or more companies that have the same owners.
A)True
B)False
Q3) When there is an unrealized loss on trading debt investments,the ________ will decrease.
A)total equity
B)cash
C)total liabilities
D)long-term investments
Q4) The owner of a bond or stock of a corporation is referred to as the investor.
A)True
B)False
Q5) List and discuss two common reasons why companies invest in debt or equity securities.
To view all questions and flashcards with answers, click on the resource link above. Page 17
Chapter 16: The Statement of Cash Flows
Available Study Resources on Quizplus for this Chatper
183 Verified Questions
183 Flashcards
Source URL: https://quizplus.com/quiz/74569
Sample Questions
Q1) IFRS requires the use of the indirect method for the operating activities section of the statement of cash flows.
A)True
B)False
Q2) The financing activities section of the statement of cash flows includes paying dividends and making payments on long-term liabilities.
A)True
B)False
Q3) Which of the following sections of the statement of cash flows includes activities that increase and decrease long-term liabilities and stockholders' equity?
A)the financing activities section
B)the operating activities section
C)the investing activities section
D)change in cash section
Q4) The investing activities section of the statement of cash flows reports cash receipts and payments that increase or decrease long-term liabilities.
A)True
B)False
To view all questions and flashcards with answers, click on the resource link above. Page 18
Chapter 17: Financial Statement Analysis
Available Study Resources on Quizplus for this Chatper
161 Verified Questions
161 Flashcards
Source URL: https://quizplus.com/quiz/74568
Sample Questions
Q1) Horizontal analysis provides a year-to-year comparison of a company's performance in different periods.
A)True
B)False
Q2) The formula for calculating the cash ratio is ________.
A)(Cash)/ Total liabilities
B)(Cash + Cash equivalents)/ Total current liabilities
C)(Cash + Cash equivalents)/ Total assets
D)(Cash equivalents)/ Total current liabilities
Q3) The audit report in the annual report is prepared by an internal auditor of a company.
A)True
B)False
Q4) The dividend payout ratio measures the annual dividend per share as a proportion of the market price per share.
A)True
B)False
Q5) The current ratio may indicate that the company is using its assets effectively.
A)True
B)False
To view all questions and flashcards with answers, click on the resource link above. Page 19