Course Introduction
Business Accounting
Final Exam Questions
Business Accounting introduces students to the fundamental principles and practices of accounting within a business context. The course covers essential topics such as the accounting cycle, financial statement preparation and interpretation, and the management of financial records. Students will learn how to analyze transactions, utilize accounting software, and apply ethical standards in financial reporting. Emphasis is placed on understanding how accounting information supports decision-making processes in planning, control, and evaluation of business operations. Through practical exercises and real-world case studies, students gain skills applicable to careers in business, finance, and entrepreneurship.
Recommended Textbook
Financial Accounting 4th Edition by Robert Kemp
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12 Chapters
1893 Verified Questions
1893 Flashcards
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Page 2
Chapter 1: Business, Accounting, and You
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159 Verified Questions
159 Flashcards
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Sample Questions
Q1) The value of an item is determined by taking the revenue from a sale and deducting the cost of the sale.
A)True
B)False
Answer: False
Q2) Amounts owed to a company by its customers are classified as:
A)payables.
B)dividends.
C)cash.
D)receivables.
Answer: D
Q3) An increase in revenues would have which of the following effects on the accounting equation?
A)Decrease Stockholders' Equity
B)Increase Common Stock
C)Increase Liabilities
D)Increase Stockholders' Equity
Answer: D
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3
Chapter 2: Analyzing and Recording Business Transactions
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152 Verified Questions
152 Flashcards
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Sample Questions
Q1) Shaman, Inc. purchased $325 of office supplies on account and treated the supplies as a prepaid expense. The journal entry would require a:
A)debit to Office Supplies Expense and a credit to Cash.
B)debit to Office Supplies and a credit to Cash.
C)debit to Office Supplies and a credit to Accounts Payable.
D)debit to Office Supplies Expense and a credit to Office Supplies.
Answer: C
Q2) A T-account has a $789 debit balance. This account is most likely NOT:
A)Common Stock.
B)Land.
C)Advertising Expense.
D)Dividends.
Answer: A
Q3) The third step in recording a transaction in the general journal is to record the: A)explanation of the entry.
B)account(s)to be credited and the amount(s).
C)date of the entry.
D)account(s)to be debited and the amount(s).
Answer: B
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Page 4
Chapter 3: Adjusting and Closing Entries
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155 Flashcards
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Sample Questions
Q1) Safety First Supply Company purchased a 5-year insurance policy for $2,900. What would the adjusting entry be at the end of the first year?
A)Debit Insurance Expense $2,900, credit Prepaid Insurance $2,900
B)Debit Insurance Expense $2,900, credit Cash $2,900
C)Debit Insurance Expense $580, credit Prepaid Insurance $580
D)Debit Insurance Expense $580, credit Cash $580
Answer: C
Q2) Of the following, which is NOT reported on the Balance Sheet?
A)cash
B)equipment
C)Depreciation Expense
D)account payable
Answer: C
Q3) Assets, Liabilities and Retained Earnings are permanent accounts that are NOT closed at the end of the accounting period.
A)True
B)False
Answer: True
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5
Chapter 4: Accounting for a Merchandising Business
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158 Verified Questions
158 Flashcards
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Sample Questions
Q1) Prism Co. purchased $2,300 of merchandise on account. The terms of the purchase are 2/15, n/45, FOB shipping point with prepaid shipping costs of $60. If Prism pays within the discount period, what is the amount of the purchase discount?
A)$44.80
B)$46.00
C)$47.20
D)No discount is allowed when shipping is prepaid.
Q2) When a customer pays within the discount period, the journal entry for the merchandiser will include a debit to Cash and a credit to Sales Discounts.
A)True
B)False
Q3) Wholesalers purchase large quantities of product from manufacturers and then sell the product to retailers.
A)True
B)False
Q4) A retailer sells goods to a wholesaler.
A)True
B)False
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6
Chapter 5: Inventory
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155 Flashcards
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Sample Questions
Q1) Cost of goods sold equals:
A)ending inventory plus net purchases minus beginning inventory.
B)beginning inventory minus net purchases plus ending inventory.
C)beginning inventory plus net sales minus ending inventory.
D)beginning inventory plus net purchases minus ending inventory.
Q2) The consistency principle is mandated by:
A)the IRS.
B)the SEC.
C)GAAP.
D)the federal government.
Q3) A material amount of value is one large enough to cause someone to change a decision that has been made.
A)True
B)False
Q4) The LEAST widely used of the four inventory valuation methods is:
A)FIFO.
B)LIFO.
C)average cost.
D)specific-identification.
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Chapter 6: The Challenges of Accounting: Standards, Internal
Control, Audits, Fraud, and Ethics
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145 Flashcards
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Sample Questions
Q1) "I didn't steal the money, I only borrowed it until I can pay it back" is an example of:
A)realization.
B)perceived opportunity.
C)rationalization.
D)perceived pressure.
Q2) When a company has one person post cash receipts, and another person deliver the deposit, this is an example of:
A)restricted access.
B)proper authorization.
C)separation of duties.
D)internal control limitations.
Q3) The U.S. is now using International Financial Reporting Standards instead of the old GAAP system.
A)True
B)False
Q4) Marla has a gambling addiction. She may have a perceived pressure to commit fraud.
A)True
B)False
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Chapter 7: Cash and Receivables
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165 Flashcards
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Sample Questions
Q1) Pirates Party Supply deposited a check for $695, but it was recorded on their books as a check for $536. This error of $159 would be:
A)added to the bank balance.
B)added to Pirate's book balance.
C)subtracted from the bank balance.
D)subtracted from Pirate's book balance.
Q2) Using a 360-day year, the maturity value of a 60-day note for $5,000 at 8% annual interest is $67.
A)True
B)False
Q3) Piper Inc. has cash of $63,000; net Accounts Receivable of $77,000; short-term investments of $20,000 and inventory of $68,000. It also has $47,000 in current liabilities and $73,000 in long-term liabilities. The current ratio for Piper Inc. is:
A)1.55.
B)3.40.
C)1.34.
D)4.85.
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Chapter 8: Long-Term and Other Assets
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171 Flashcards
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Sample Questions
Q1) Disposal of a plant asset always occurs after the asset has been fully depreciated.
A)True
B)False
Q2) Depreciation is a process of valuation of an asset.
A)True
B)False
Q3) Investments in debt securities, may be classified as either current or long-term assets based on their maturity date.
A)True
B)False
Q4) A piece of equipment that was originally purchased for $33,000, had accumulated depreciation of $25,000, and was sold for $8,000 would recognize a gain of $1,000.
A)True
B)False
Q5) A fixed asset's useful life may be shorter than its physical life due to obsolescence. A)True
B)False
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Page 10
Chapter 9: Current Liabilities and Long-Term Debt
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Sample Questions
Q1) A major difference between Accounts Payable and Notes Payable is that:
A)only Accounts Payable are classified as current assets.
B)Notes Payable are more formal than Accounts Payable.
C)only Notes Payable charge interest.
D)Notes Payable are only long-term assets.
Q2) The debt ratio is an indicator of a company's profitability.
A)True
B)False
Q3) If Caesar's Coffee Company had total liabilities of $200,000 and total Stockholders' Equity of $150,000, then the debt ratio would be 57%.
A)True
B)False
Q4) Capital leases are most similar to:
A)Accounts Payable.
B)unearned revenue.
C)mortgage notes.
D)regular Notes Payable.
Q5) Sales tax liabilities are classified as long-term payables.
A)True
B)False
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Chapter 10: Corporations: Paid-In Capital and Retained Earnings
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Sample Questions
Q1) Which of the following is NOT a date associated with cash dividends?
A)Date of issuance
B)Date of declaration
C)Date of payment
D)Date of record
Q2) Charmed, Inc. reacquired 7,000 shares of its $16-par common stock for $11/share.
The debit to Treasury Stock will be:
A)$35,000.
B)$77,000.
C)$112,000.
D)based on the last treasury stock transaction.
Q3) The formula to determine dividends on par-value preferred stock is:
A)number of outstanding shares times dividend rate.
B)dividend rate times par value.
C)par value times number of outstanding shares times dividend rate.
D)number of outstanding shares divided by the dividend rate.
Q4) 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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135 Flashcards
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Sample Questions
Q1) An example of a cash outflow from financing activities is:
A)paying off note payable.
B)paying for 6 months rent in advance.
C)purchasing land.
D)making payment on accounts payable.
Q2) Under the direct method, depreciation on a building would be reported as a(n):
A)investing activity.
B)operating activity.
C)financing activity.
D)It is not reported.
Q3) The accuracy of the Statement of Cash Flows can be verified by computing the change in the balance of the:
A)cash and cash equivalent accounts.
B)equity account.
C)revenue accounts.
D)asset and liability accounts.
Q4) The direct method of formatting a Statement of Cash Flows starts with net income.
A)True
B)False
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Chapter 12: Financial Statement Analysis
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Sample Questions
Q1) The goal of the investing decision is to obtain money at the lowest possible cost.
A)True
B)False
Q2) Dolly's Diamonds reported Net Sales of $254,000, Cost of Goods Sold of $107,500, Operating Expenses of $60,400, and Income Tax Expense of $21,600. Dolly's gross profit margin percentage was: (Round your final answer to two decimal places, X.XX%.)
A)33.9%.
B)42.32%.
C)57.68%.
D)25.39%.
Q3) Wolfe Supply Co. sells hiking and other outdoor equipment. It also sells a few trail books and outdoor guides about the area. In their Income Statement, the revenue from the books and guides would probably be recorded as:
A)operating income.
B)other income.
C)other expenses.
D)extraordinary income.
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