Business Accounting
Exam Practice Tests
Course Introduction
Business Accounting provides a comprehensive introduction to the principles and practices of accounting within a business context. The course covers essential concepts such as the accounting cycle, preparation and analysis of financial statements, and the interpretation of key financial data. Students will learn how businesses record transactions, manage accounts, and utilize financial information for decision-making and strategic planning. Emphasizing real-world applications, this course equips students with the foundational skills needed to understand financial health, comply with regulatory requirements, and communicate effectively about a companys economic performance.
Recommended Textbook
Horngren's Financial and Managerial Accounting 6th Edition by Tracie L. Miller Nobles
Available Study Resources on Quizplus
27 Chapters
5590 Verified Questions
5590 Flashcards
Source URL: https://quizplus.com/study-set/3528 Page 2
Chapter 1: Accounting and the Business Environment
Available Study Resources on Quizplus for this Chatper
263 Verified Questions
263 Flashcards
Source URL: https://quizplus.com/quiz/70086
Sample Questions
Q1) Which of the following organizations requires publicly owned companies to be audited by independent accountants (CPAs)?
A) Securities and Exchange Commission (SEC)
B) Public Company Accounting Oversight Board (PCAOB)
C) Financial Accounting Standards Board (FASB)
D) American Institute of Certified Public Accountants (AICPA)
Answer: A
Q2) The ultimate control of the corporation rests with the ________.
A) board of directors
B) stockholders
C) chairperson of Board of Directors
D) chief operating officer
Answer: B
Q3) Financial analysts perform reviews of companies to ensure compliance to rules and regulations.
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/70085
Sample Questions
Q1) A business purchases $500 of office supplies on account. What is the effect on the accounting equation?
A) Office Supplies increase and Cash decreases.
B) Office Supplies increase and Accounts Payable increase.
C) Office Supplies increase and Accounts Payable decrease.
D) Total assets increase and total liabilities decrease.
Answer: B
Q2) A posting reference column is used ________.
A) while preparing the trial balance using the ledger
B) when the information is transferred from the journal to the ledger
C) when the information is transferred from the ledger to the post-closing trial balance
D) while preparing the balance sheet using the trial balance
Answer: B
Q3) Debit is abbreviated as DE and Credit is abbreviated as CR.
A)True
B)False
Answer: False
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/70084
Sample Questions
Q1) Deferred revenues are assets because the business has collected the cash before earning the revenue.
A)True
B)False
Answer: False
Q2) Which of the following accounting terms assumes that a business's activities can be divided into small segments and that financial statements can be prepared for specific periods, such as a month, quarter, or year?
A) adjusting entry concept
B) economic entity concept
C) matching principle
D) time period concept
Answer: D
Q3) Accrued revenue represents the receipt of cash before the revenue has been earned.
A)True
B)False
Answer: False
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/70083
Sample Questions
Q1) Which of the following are temporary accounts that are closed at the end of the year?
A) assets, liabilities, and dividends
B) revenues, expenses, and dividends
C) assets, liabilities, and stockholders' equity
D) revenues, expenses, and stockholders' equity
Q2) Which of the following statements is true if the income statement debit column exceeds the income statement credit column of a worksheet?
A) The company incurred a net loss.
B) The retained earnings account increased during the period.
C) The company made a net profit.
D) An error was made.
Q3) If a business has a net loss, the closing entry to close Income Summary would be a debit to Income Summary and a credit to Retained Earnings.
A)True
B)False
Q4) A net loss from the balance sheet decreases Retained Earnings.
A)True
B)False
To view all questions and flashcards with answers, click on the resource link above. Page 6
Chapter 5: Merchandising Operations
Available Study Resources on Quizplus for this Chatper
277 Verified Questions
277 Flashcards
Source URL: https://quizplus.com/quiz/70082
Sample Questions
Q1) List four items from an invoice that are needed to record a purchase of merchandise inventory.
Q2) Gross profit is calculated as ________.
A) sales revenue less sales discounts and allowances
B) sales revenue less operating expenses
C) net sales revenue less sales discounts
D) net sales revenue less cost of goods sold
Q3) When using the perpetual inventory system, the entry to close Cost of Goods Sold will include a debit to Income Summary.
A)True
B)False
Q4) A company purchased inventory for $100,000 on account and recorded it as follows: \[\begin{array} { | c | r | r | }
\hline \text { Merchandise Inventory } & 100,000 & \\
\hline \text { Accounts Payable } & & 100,000 \\
\hline \end{array}\]
Q5) Briefly discuss what gross profit represents and how it affects the net earnings of a merchandiser.
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/70081
Sample Questions
Q1) An inventory error cancels out after two periods.
A)True
B)False
Q2) Boulevard Home Furnishings had the following balances and transactions during 2018. \[\begin{array} { | l | l | }
\hline \text { Beginning Inventory } & 20 \text { units at } \$ 71 \\
\hline \text { June 10 } & \text { Purchased } 40 \text { units at } \$ 85 \\
\hline \text { December 30 } & \text { Sold 25 units } \\
\hline \text { December 31 } & \text { Replacement cost } \$ 87 \\
\hline
\end{array}\] The company maintains its records of inventory on a perpetual basis using the FIFO inventory costing method. Calculate the amount of ending Merchandise Inventory at December 31, 2018 using the lower-of-cost-or-market rule.
A) $2,975
B) $3,045
C) $3,480
D) $5,220
Q3) What does inventory turnover measure? What does a low rate of inventory turnover indicate?
To view all questions and flashcards with answers, click on the resource link above.
Page 8
Chapter 7: Internal Control and Cash
Available Study Resources on Quizplus for this Chatper
258 Verified Questions
258 Flashcards
Source URL: https://quizplus.com/quiz/70080
Sample Questions
Q1) Electronic funds transfers are a system that transfers cash by using paper documents.
A)True
B)False
Q2) Collusion involves two or more people working together to circumvent internal controls and defraud a company.
A)True
B)False
Q3) Journal entries are required if the bank reconciliation includes a book error.
A)True
B)False
Q4) A company has a petty cash fund amount of $200. When replenished, it has petty cash tickets of $33 for gas expense, $31 for postage expense, $16 for supplies expense, and $12 for miscellaneous expenses. Assume the cash balance is not over or short. In the journal entry, Cash would be credited for ________.
A) $92
B) $76
C) $64
D) $80
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
234 Verified Questions
234 Flashcards
Source URL: https://quizplus.com/quiz/70079
Sample Questions
Q1) GAAP requires companies to ________ method to record bad debts expense.
A) use the direct write-off
B) use the allowance
C) select either the direct write-off or allowance
D) use the fair value
Q2) When a notes receivable is outstanding at the end of an accounting period, ________.
A) no adjusting entry is needed
B) the revenue recognition principle requires that earnings from the note be recorded in the year the cash is received
C) the total interest on the note should be recorded in an adjusting entry
D) the interest revenue earned on the note up to year-end is part of that year's earnings
Q3) The direct write-off method for uncollectible accounts violates the matching principle.
A)True
B)False
Q4) Days' sales in receivables is also called the collection period.
A)True
B)False
To view all questions and flashcards with answers, click on the resource link above. Page 10
Chapter 9: Plant Assets, Natural Resources, and Intangibles
Available Study Resources on Quizplus for this Chatper
210 Verified Questions
210 Flashcards
Source URL: https://quizplus.com/quiz/70078
Sample Questions
Q1) Rotan, Inc. purchased a van on January 1, 2018, for $850,000. Estimated life of the van was five years, and its estimated residual value was $94,000. Rotan uses the straight-line method of depreciation. At the beginning of 2020, the corporation revised the total estimated life of the asset from five years to six years. The estimated residual value remained the same as estimated earlier. Calculate the depreciation expense for 2020.
A) $151,200
B) $136,900
C) $113,400
D) $75,600
Q2) A truck was acquired for $100,000 and has accumulated depreciation of $70,000. The business exchanges the truck for a new one. The new truck has a market value of $120,000 and the business pays $100,000 cash. Assume the exchange has commercial substance. Prepare the journal entry to record this transaction. Omit explanation.
Q3) 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
To view all questions and flashcards with answers, click on the resource link above. Page 11
Chapter 10: Investments
Available Study Resources on Quizplus for this Chatper
191 Verified Questions
191 Flashcards
Source URL: https://quizplus.com/quiz/70077
Sample Questions
Q1) On January 1, 2018, West Coast Boats paid $ 1,850,000 for its 30% investment in East Coast Autos. After the purchase, West Coast Boats has significant influence over East Coast Autos. East Coast Autos earned net income of $30,000,000 and paid cash dividends of $15,000,000 to all outstanding stockholders during 2018. Assume all outstanding stock is voting stock. Requirement:
1. Journalize all required 2018 transactions related to West Coast Boats' investment in East Coast Autos. Omit explanations.
2. What is the December 31, 2018 balance of the investment account? Label your work.
Q2) When a trading debt security is disposed of, the amount of gain or loss is calculated as the difference between the cash received and the cost of the debt security disposed of.
A)True
B)False
Q3) When a company collects the face value of a bond investment at maturity, total assets increase.
A)True
B)False
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
225 Verified Questions
225 Flashcards
Source URL: https://quizplus.com/quiz/70076
Sample Questions
Q1) Unearned revenue, for services to be performed in six months, appears on the balance sheet as ________.
A) long-term investments
B) current liabilities
C) current assets
D) long-term assets
Q2) Which of the following is included in the entry to record estimated warranty payable?
A) a credit to Estimated Warranty Payable
B) a credit to Merchandise Inventory
C) a credit to Warranty Expense
D) a debit to Estimated Warranty Payable
Q3) Warranty Expense is shown on the income statement at the estimated amount.
A)True
B)False
Q4) Sales Tax Payable is usually calculated as a percentage of the amount of the sale.
A)True
B)False
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: Long-Term Liabilities
Available Study Resources on Quizplus for this Chatper
207 Verified Questions
207 Flashcards
Source URL: https://quizplus.com/quiz/70075
Sample Questions
Q1) Long-term liabilities can be structured either with an equal principal payment or with an equal total payment.
A)True
B)False
Q2) The discount on bonds payable becomes interest expense through a process of depreciation.
A)True
B)False
Q3) What does the debt to equity ratio show, and how is it calculated?
Q4) When a bond is issued, the issue price is the present value of the interest payments the bondholder will receive while holding the bond, plus the present value of the bond principal that will be received at maturity.
A)True
B)False
Q5) Generally accepted accounting principles require that interest expense be measured using the straight-line amortization method.
A)True
B)False
Q6) What is the difference between simple interest and compound interest?
Page 14
To view all questions and flashcards with answers, click on the resource link above.
Chapter 13: Stockholders Equity
Available Study Resources on Quizplus for this Chatper
277 Verified Questions
277 Flashcards
Source URL: https://quizplus.com/quiz/70074
Sample Questions
Q1) A small stock dividend, a large stock dividend and a stock split have no effect on total assets.
A)True
B)False
Q2) Discontinued operations are reported without consideration of the income tax effects.
A)True B)False
Q3) A corporation's income statement includes some unique items that do not often apply to smaller businesses.
A)True
B)False
Q4) The par value of a stock has no relation to the market value.
A)True
B)False
Q5) The declaration of a cash dividend does not create an obligation for the corporation.
A)True B)False
Q6) 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: The Statement of Cash Flows
Available Study Resources on Quizplus for this Chatper
183 Verified Questions
183 Flashcards
Source URL: https://quizplus.com/quiz/70073
Sample Questions
Q1) Urban Installations Company uses the direct method to prepare its statement of cash flows. Urban has reported cost of goods sold of $95,000 on its income statement for 2018. If the balance in the Merchandise Inventory account decreased by $6,000 during the year, then $6,000 needs to be added to $95,000 to calculate payments to suppliers for inventory purchases.
A)True
B)False
Q2) \[\begin{array} { | l | l | }
\hline \text { Item } & \begin{array} { l }
\text { Adjustment to Net Income on } \\
\text { Statement of Cash Flows }
\end{array} \\
\hline \text { Depreciation Expense } & \\
\hline \text { Decreases in Current Liabilities } & \\
\hline \text { Gains on Disposal of Long-term } & \\
\text { Assets } & \\
\hline \text { Increases in Current Assets } & \\
\text { pther than Cash } & \\
\hline \end{array}\]
To view all questions and flashcards with answers, click on the resource link above.
Page 16
Chapter 15: Financial Statement Analysis
Available Study Resources on Quizplus for this Chatper
161 Verified Questions
161 Flashcards
Source URL: https://quizplus.com/quiz/70072
Sample Questions
Q1) Ratios can be used to analyze a company's ability to pay long-term debt.
A)True
B)False
Q2) Ratio analysis ________.
A) cannot be used to evaluate a company's financial condition
B) is used most effectively to compare a company against other companies in the same industry and to denote trends within the company
C) cannot be used to compare a company against other companies in the same industry because the necessary information is not available D) cannot be used to evaluate a company's performance
Q3) Days' sales in receivables measures the return on average receivables.
A)True
B)False
Q4) Investors and creditors can evaluate a company by examining only one year of data.
A)True
B)False
Q5) List the three ways to analyze financial statements. State what each of these ways provides to investors and creditors.
To view all questions and flashcards with answers, click on the resource link above. Page 17
Chapter 16: Introduction to Managerial Accounting
Available Study Resources on Quizplus for this Chatper
245 Verified Questions
245 Flashcards
Source URL: https://quizplus.com/quiz/70071
Sample Questions
Q1) A corporation used $34,000 of direct materials. It incurred $74,000 in direct labor costs and $112,500 in manufacturing overhead costs during the period. What is the cost of goods manufactured if the beginning and ending Work-in-Process Inventories were $27,500 and $20,500, respectively?
A) $248,000
B) $227,500
C) $213,500
D) $220,500
Q2) Which of the following statements is true of managerial accounting?
A) The external stakeholders of a company are the primary users of managerial accounting.
B) Managerial accounting information is used to help managers plan, direct and control their operations.
C) An external audit by an independent CPA is required for managerial accounting information.
D) Managerial accounting information must comply with Generally Accepted Accounting Principles.
Q3) How does a service company calculate unit cost per service? Why do managers need to know the unit cost per service?
To view all questions and flashcards with answers, click on the resource link above.
Page 18
Chapter 17: Job Order Costing
Available Study Resources on Quizplus for this Chatper
191 Verified Questions
191 Flashcards
Source URL: https://quizplus.com/quiz/70070
Sample Questions
Q1) For a service company, such as an accounting firm, each client is considered a job.
A)True
B)False
Q2) Process costing rather than job order costing is more appropriate for service companies.
A)True
B)False
Q3) On January 1, Biden, Inc.'s Work-in-Process Inventory account had a balance of $30,300. During the year, $58,500 of direct materials was placed into production. Manufacturing wages incurred amounted to $84,000, of which $64,500 were for direct labor. Manufacturing overhead is allocated on the basis of 120% of direct labor cost. Actual manufacturing overhead was $90,500. Jobs costing $220,500 were completed during the year. What is the December 31 balance of Work-in-Process Inventory?
A) $153,300
B) $30,300
C) $230,700
D) $10,200
Q4) Why would the manager of a service company need to use job order costing?
To view all questions and flashcards with answers, click on the resource link above.
Page 19
Chapter 18: Process Costing
Available Study Resources on Quizplus for this Chatper
173 Verified Questions
173 Flashcards
Source URL: https://quizplus.com/quiz/70069
Sample Questions
Q1) The Assembling Department of Patchwork, Inc. had 11,000 units in process on December 1 and received 30,400 units from the Sewing Department. During the month, it completed 20,700 units and transferred them to the Packaging Department. Calculate the number of units accounted for by the Assembling Department for December. The company uses the FIFO method.
A) 20,700 units
B) 41,400 units
C) 11,000 units
D) 30,400 units
Q2) In process costing, production costs are accumulated by process. At the end of the period, the total production costs incurred must be split into two components. What are these two components?
Q3) In a process costing system, a department's total production costs incurred in a particular period must equal the total costs transferred out of the department.
A)True
B)False
Q4) List the four steps, in the order of occurrence, that are used in preparing a production cost report.
To view all questions and flashcards with answers, click on the resource link above.
Page 20
Chapter 19: Cost Management Systems: Activity-Based
Just-In-Time
Available Study Resources on Quizplus for this Chatper
188 Verified Questions
188 Flashcards
Source URL: https://quizplus.com/quiz/70068
Sample Questions
Q1) Quality management systems (QMS) are systems that help managers improve the business's performance by providing quality products and services.
A)True
B)False
Q2) When a manufacturer changes from using a single plantwide predetermined overhead rate to multiple predetermined overhead allocation rates, the product unit cost may be more accurate.
A)True
B)False
Q3) Why is using a single plantwide predetermined overhead allocation rate not always accurate?
Q4) A product mix decision focuses on generating the maximum profit for a company but does not consider the company's limited production capabilities.
A)True
B)False
Q5) List and briefly describe the four types of quality-related costs.
Q6) List and briefly discuss three major differences between just-in-time costing (JIT) and traditional costing.
To view all questions and flashcards with answers, click on the resource link above. Page 21
Chapter 20: Cost Volume Profit Analysis
Available Study Resources on Quizplus for this Chatper
196 Verified Questions
196 Flashcards
Source URL: https://quizplus.com/quiz/70067
Sample Questions
Q1) Sensitivity analysis allows managers to see how various business strategies will affect profit levels.
A)True
B)False
Q2) Resolute Company sells two generators-Model A and Model B-for $456 per unit and $394 per unit, respectively. The variable cost of Model A is $406 per unit and of Model B is $304 per unit. The company will generate lower revenues but a higher net income if it sells more of Model B than Model A.
A)True
B)False
Q3) The breakeven point is the point where the sales revenues are equal to the total variable costs plus the total fixed costs.
A)True
B)False
Q4) Fixed costs divided by the contribution margin ratio equals the breakeven point in sales dollars.
A)True
B)False
Q5) How is the contribution margin calculated?
To view all questions and flashcards with answers, click on the resource link above. Page 22
Chapter 21: Variable Costing
Available Study Resources on Quizplus for this Chatper
148 Verified Questions
148 Flashcards
Source URL: https://quizplus.com/quiz/70066
Sample Questions
Q1) In its first year of business, Talula, Inc. produced and sold 600 units. If Talula uses variable costing, ________.
A) its operating income for the period will be higher than under absorption costing
B) its operating income for the period will be lower than under absorption costing
C) its value of ending Finished Goods Inventory reported in the balance sheet will be higher than under absorption costing
D) its operating income will be the same as under absorption costing
Q2) Contribution margin is calculated by deducting ________ from sales revenue.
A) total product costs
B) total selling and administrative costs
C) total fixed costs
D) total variable costs
Q3) When more units are sold than produced, operating income is higher under absorption costing than variable costing.
A)True
B)False
To view all questions and flashcards with answers, click on the resource link above. Page 23
Chapter 22: Master Budgets
Available Study Resources on Quizplus for this Chatper
181 Verified Questions
181 Flashcards
Source URL: https://quizplus.com/quiz/70065
Sample Questions
Q1) The last step in the preparation of the master budget is the budgeted income statement.
A)True
B)False
Q2) For a merchandising company, what is the formula used to determine the amount of merchandise inventory to be purchased?
Q3) Use of advanced technology makes it more cost effective for managers to conduct sensitivity analysis.
A)True
B)False
Q4) Which of the following describes the cash budget?
A) It aids in planning to ensure the company has adequate inventory and cash on hand.
B) It captures the variable and fixed expenses of the business.
C) It depicts the breakdown of sales based on terms of collection.
D) It helps in planning to ensure the business has adequate cash.
Q5) For manufacturing companies, the primary source of cash is from its customers.
A)True
B)False
Q6) List the three sections of the cash budget for a merchandising company.
To view all questions and flashcards with answers, click on the resource link above. Page 24
Chapter 23: Flexible Budgets and Standard Cost Systems
Available Study Resources on Quizplus for this Chatper
223 Verified Questions
223 Flashcards
Source URL: https://quizplus.com/quiz/70064
Sample Questions
Q1) Which of the following should be considered when analyzing manufacturing overhead variances?
A) whether costs incurred are product costs or period costs
B) whether direct materials costs are higher than standard costs
C) whether certain manufacturing overhead costs are controllable
D) whether direct labor costs can be reduced
Q2) Cavalaris Products uses a standard cost system. Variable overhead costs are allocated based on direct labor hours. In the first quarter, Cavalaris had an unfavorable cost variance for variable overhead costs. Which of the following scenarios is a reasonable explanation for this variance?
A) The actual number of direct labor hours was lower than the budgeted hours.
B) The actual variable overhead costs were higher than the budgeted costs.
C) The actual variable overhead costs were lower than the budgeted costs.
D) The actual number of direct labor hours was higher than the budgeted hours.
Q3) Because it is a volume variance, the fixed overhead volume variance explains why fixed overhead is underallocated or overallocated.
A)True
B)False
Q4) List the direct labor variances and briefly describe each.
To view all questions and flashcards with answers, click on the resource link above. Page 25
Chapter 24: Responsibility Accounting and Performance Evaluation
Available Study Resources on Quizplus for this Chatper
187 Verified Questions
187 Flashcards
Source URL: https://quizplus.com/quiz/70063
Sample Questions
Q1) In a decentralized company, segment managers may not fully understand the big picture when making decisions.
A)True
B)False
Q2) Which responsibility center managers are responsible for both generating revenue and either controlling costs or efficiently managing invested capital?
A) cost and profit centers
B) revenue and profit centers
C) profit and investment centers
D) revenue and investment centers
Q3) A division of a manufacturing company responsible for a particular product is a(n)
A)responsibility center
B)cost center
C)investment center
D)revenue center
E)profit center
Q4) Define cost-based transfer price. When should cost-based transfer pricing be used? Explain your answer.
Page 26
To view all questions and flashcards with answers, click on the resource link above.
Chapter 25: Short-Term Business Decisions
Available Study Resources on Quizplus for this Chatper
200 Verified Questions
200 Flashcards
Source URL: https://quizplus.com/quiz/70062
Sample Questions
Q1) Celaneo Avionics makes aircraft instrumentation. Its basic navigation radio requires $60 in variable costs and $4000 per month in fixed costs. Celaneo sells 20 radios per month. If the company further processes the radio, to enhance its functionality, it will require an additional $40 per unit of variable costs, plus an increase in fixed costs of $500 per month. The current sales price of the radio is $280. The CEO wishes to improve operating income by $1200 per month by selling the enhanced version of the radio. In order to meet this target, the sales price to be charged for the enhanced product is
A) $320 per unit
B) $405 per unit
C) $125 per unit
D) $380 per unit
Q2) Which of the following is irrelevant when deciding to upgrade a company's heating and air conditioning system?
A) the energy efficiency of the old equipment versus the energy efficiency of the new equipment
B) the safety of the new equipment compared to the old equipment
C) the purchase price of the old equipment
D) the productivity of the old equipment compared to that of the new equipment
To view all questions and flashcards with answers, click on the resource link above.
Page 27
Chapter 26: Capital Investment Decisions
Available Study Resources on Quizplus for this Chatper
152 Verified Questions
152 Flashcards
Source URL: https://quizplus.com/quiz/70061
Sample Questions
Q1) Cash inflows from a capital investment arise from an increase in revenues, a decrease in expenses, or both.
A)True
B)False
Q2) The accounting rate of return shows the effect of the investment on the company's accrual-based income.
A)True
B)False
Q3) Which of the following two methods are typically used for initial screening of investments, rather than for detailed, in-depth analysis?
A) payback and accounting rate of return
B) net present value and payback
C) internal rate of return and net present value
D) accounting rate of return and net present value
Q4) The accounting rate of return also is known as the average rate of return or annual rate of return.
A)True
B)False
Q5) What are the strengths of the net present value capital budgeting method?
To view all questions and flashcards with answers, click on the resource link above. Page 28
Chapter 27: Understanding Accounting Information Systems
and their Components
Available Study Resources on Quizplus for this Chatper
164 Verified Questions
164 Flashcards
Source URL: https://quizplus.com/quiz/70087
Sample Questions
Q1) On April 1, a hardware retailer purchases inventory on account for $1500. Which of the following correctly describes the effect of this transaction? Assume a perpetual inventory system is used.
A) Merchandise Inventory decreases by $1500 and Accounts Receivable decreases by $1500.
B) Merchandise Inventory decreases by $1500 and Accounts Receivable increases by $1500.
C) Merchandise Inventory increases by $1500 and Accounts Payable decreases by $1500.
D) Merchandise Inventory increases by $1500 and Accounts Payable increases by $1500.
Q2) A disadvantage of a typical enterprise resource planning system is that it cannot be offered through cloud computing.
A)True
B)False
Q3) The cash disbursements journal is also called the check register.
A)True
B)False
Q4) Describe the transactions recorded in the purchases journal.
To view all questions and flashcards with answers, click on the resource link above. Page 29