Business Accounting
Question Bank
Course Introduction
Business Accounting is a foundational course that introduces students to the principles and practices of financial and managerial accounting within a business context. The course covers key topics such as recording financial transactions, preparing and analyzing financial statements, understanding the accounting cycle, and applying accounting information for internal decision-making. Students will also explore concepts such as budgeting, cost control, and the ethical considerations in accounting. Through practical examples and case studies, learners develop the skills needed to interpret financial data, communicate financial information effectively, and support informed business decisions.
Recommended Textbook
Horngrens Accounting 10th Edition by Miller Nobles Mattison
Available Study Resources on Quizplus
26 Chapters
3887 Verified Questions
3887 Flashcards
Source URL: https://quizplus.com/study-set/3431
Page 2
Chapter 1: Accounting and the Business Environment
Available Study Resources on Quizplus for this Chatper
143 Verified Questions
143 Flashcards
Source URL: https://quizplus.com/quiz/68147
Sample Questions
Q1) Venus Inc. paid $5,000 for account payable. How does this transaction affect the accounting equation of Venus?
A)Assets decrease by $5,000 and equity increases by $5,000.
B)Assets decrease by $5,000 and liabilities decrease by $5,000.
C)Assets increase by $5,000 and equity decreases by $5,000.
D)Assets increase by $5,000 and liabilities increase by $5,000.
Answer: B
Q2) Which of the following financial statements reports an increase or decrease in net cash during the time period covered?
A)income statement
B)statement of owner's equity
C)statement of cash flows
D)cash budget
Answer: C
Q3) The owner's claim to the assets of the business is called:
A)return on assets.
B)expenses.
C)equity.
D)debt.
Answer: C
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
156 Verified Questions
156 Flashcards
Source URL: https://quizplus.com/quiz/68148
Sample Questions
Q1) The following transactions have been journalized and posted to the proper accounts. Prepare a trial balance using the following details:
a. Edward Wilson invested $15,000 cash in his new landscaping business.
b. Paid the first month's rent with $800 cash.
c. Purchased equipment by paying $4,000 cash and executing a note payable for $4,000.
d. Purchased office supplies for $200 cash.
e. Billed clients for a total of $7,000 for design services rendered.
f. Received $1,000 cash from clients for services rendered above.
Answer: 11ea8243_0ffa_8f39_bbd8_4589c3137df9_TB2803_00
Q2) The trial balance is also known as the balance sheet.
A)True
B)False
Answer: False
Q3) A business paid salaries of $6,000 in cash. Provide the journal entry (debits first, credits second.)
Answer: 11ea8243_0ff8_4544_bbd8_896249b7e41f_TB2803_00 Paid salaries.
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
152 Verified Questions
152 Flashcards
Source URL: https://quizplus.com/quiz/68149
Sample Questions
Q1) Patricia Event Planning Service records prepaid expenses and unearned revenues using the alternative treatments. Patricia makes adjusting entries as needed to bring her books to the full accrual basis once a year at the end of the year. On December 15, she collected $1,000 from a customer in advance for a series of events that will start late December and end in March. At the end of the year, she rendered approximately 10% of the services for her customer. The adjusting entry on December 31 will include a debit to Service Revenue for $900.
A)True
B)False Answer: True
Q2) The revenue recognition principle is the basis for recording revenues-both when to record revenue and the amount of revenue to record.
A)True
B)False Answer: True
Q3) Under cash basis accounting, an expense is recorded only when cash is paid.
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
156 Verified Questions
156 Flashcards
Source URL: https://quizplus.com/quiz/68150
Sample Questions
Q1) Assets are listed in the order of their ________ on the balance sheet.
A)amounts
B)dates of purchase
C)liquidities
D)durabilities
Q2) The Cash account is a temporary account.
A)True
B)False
Q3) Which of the following is an example of an intangible asset?
A)Equipment
B)Plant
C)Property
D)Copyright
Q4) To which of the following accounts should the balance in the Income Summary account be closed?
A)Owner's Name, Withdrawals
B)Net Income
C)Owner's Name, Capital
D)Service Revenue
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
160 Verified Questions
160 Flashcards
Source URL: https://quizplus.com/quiz/68151
Sample Questions
Q1) A merchandiser's statement of owner's equity looks exactly like that of a service business.
A)True
B)False
Q2) Even in a perpetual inventory system that updates the inventory account as and when transactions occur, the business must count inventory at least once in a year.
A)True B)False
Q3) Freight out is an addition to the Merchandise Inventory account if the seller uses the perpetual inventory system.
A)True
B)False
Q4) The loss of inventory that occurs because of theft, damage, and errors is referred to as inventory shrinkage.
A)True B)False
Q5) The entry to close Sales Discounts will include a debit to Income Summary. A)True B)False
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
155 Verified Questions
155 Flashcards
Source URL: https://quizplus.com/quiz/68152
Sample Questions
Q1) The disclosure principle states that a company should disclose all major accounting methods and procedures in the:
A)balance sheet.
B)income statement.
C)footnotes to the financial statements.
D)adjusted trial balance.
Q2) Which of the following inventory costing methods results in the lowest value of ending inventory during a period of rising inventory costs?
A)Specific identification
B)Weighted-average
C)Last-in, first-out
D)First-in, first-out
Q3) During a period of declining inventory costs, which of the following costing methods should be used by a company that intends to minimize its tax expenses?
A)First-in, first-out
B)Last-in, first-out
C)Weighted-average
D)Specific identification
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
137 Verified Questions
137 Flashcards
Source URL: https://quizplus.com/quiz/68153
Sample Questions
Q1) Unlike the sales journal, entries in the cash receipts journal are posted monthly to the accounts receivable subsidiary ledger and daily to the general ledger.
A)True
B)False
Q2) While posting the entries from a sales journal, the total of the Accounts Receivable DR, Sales Revenue CR column is posted to the accounts receivable subsidiary ledger.
A)True
B)False
Q3) Examples of source documents, in an accounting information system, include the statement of cash flows and sales journal.
A)True
B)False
Q4) The Accounts Receivable balance in the general ledger may or may not equal the sum of the accounts in the accounts receivable subsidiary ledger.
A)True
B)False
To view all questions and flashcards with answers, click on the resource link above. Page 9
Chapter 8: Internal Control and Cash
Available Study Resources on Quizplus for this Chatper
160 Verified Questions
160 Flashcards
Source URL: https://quizplus.com/quiz/68154
Sample Questions
Q1) A ________ is a document explaining the reasons for the difference between a depositor's cash records and the depositor's cash balance in its bank account.
A)bank statement
B)deposit receipt
C)bank reconciliation
D)remittance advice
Q2) Which of the following describes the control environment?
A)Internal auditors monitor company controls to safeguard assets, and external auditors monitor the controls to ensure that the accounting records are accurate.
B)The control environment is the "tone at the top" of the business.
C)The control environment is designed to ensure that the business earns profit.
D)A company must identify its risks.
Q3) Journal entries are required if the bank reconciliation includes outstanding checks. A)True
B)False
Q4) A demand deposit at a bank is the most liquid of all company assets.
A)True
B)False
To view all questions and flashcards with answers, click on the resource link above.
10
Chapter 9: Receivables
Available Study Resources on Quizplus for this Chatper
138 Verified Questions
138 Flashcards
Source URL: https://quizplus.com/quiz/68155
Sample Questions
Q1) When a business accepts payment through credit cards or debit cards, it has to pay a fee to the credit card or debit card processor.
A)True
B)False
Q2) On October 1, 2015, Android Inc. made a loan to one of its customers. The customer signed a 4-month note for $100,000 at 15%. Calculate the maturity value of the note.
A)$105,000
B)$75,000
C)$25,000
D)$95,000
Q3) Tom's Fit Inc. a readymade garment seller accepts payment through credit cards. During the month of August, the card sales amounted to $12,000. The processor charges a 3% fee. Assuming that the credit card processor uses the gross method, provide the journal entries for the receipt of funds and the collection of fees at the end of the period.
Q4) Interest rates are generally stated on a monthly basis.
A)True B)False
To view all questions and flashcards with answers, click on the resource link above.
11
Chapter 10: Plant Assets, Natural Resources, and Intangibles
Available Study Resources on Quizplus for this Chatper
151 Verified Questions
151 Flashcards
Source URL: https://quizplus.com/quiz/68156
Sample Questions
Q1) The double-declining-balance method ignores the residual value while calculating the amount of depreciation.
A)True
B)False
Q2) In common with other intangible assets, goodwill must be amortized each year.
A)True
B)False
Q3) Which of the following costs related to a company car would be capitalized?
A)the cost to install an engine with higher horsepower
B)the cost to change the car's oil
C)the cost to replace a broken windshield
D)the cost of new tires
Q4) On October 1, 2015, Nurix Company purchased a patent for $100,000 cash. Although the patent gives legal protection for 20 years, it is expected to be used for only eight years. Journalize the amortization expense for 2015. Assume straight-line amortization.
Q5) The asset turnover ratio is calculated by dividing cost of goods sold by average total assets.
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
162 Verified Questions
162 Flashcards
Source URL: https://quizplus.com/quiz/68157
Sample Questions
Q1) The entry to accrue warranty payable includes a credit to Warranty Expense.
A)True
B)False
Q2) Amounts owed for products or services, due within one year, are current liabilities.
A)True
B)False
Q3) At the maturity of a note payable, a borrower will pay:
A)the principal plus interest.
B)the principal amount only.
C)the interest amount only.
D)the principal minus interest.
Q4) Which of the following accounts is credited by the seller when tax is collected on retail sales?
A)Accounts Payable
B)Payroll Tax
C)Sales Tax Payable
D)Unearned Revenue
To view all questions and flashcards with answers, click on the resource link above.
13
Chapter 12: Partnerships
Available Study Resources on Quizplus for this Chatper
161 Verified Questions
161 Flashcards
Source URL: https://quizplus.com/quiz/68158
Sample Questions
Q1) If a withdrawing partner receives assets worth more than the book value of his equity, then he receives a bonus.
A)True
B)False
Q2) Capital deficiency occurs when a partner's capital account has a credit balance.
A)True
B)False
Q3) Albert, Billy, and Cathy share profits and losses of their partnership as 2:5:3. If the net income is $50,000, calculate the profit share of Billy.
A)$20,000
B)$15,000
C)$25,000
D)$10,000
Q4) Which of the following will result in the dissolution of a partnership?
A)admission of a new partner
B)purchase of plant assets for the business
C)contribution of an asset by an existing partner
D)partner withdrawal of cash
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
158 Verified Questions
158 Flashcards
Source URL: https://quizplus.com/quiz/68159
Sample
Questions
Q1) Lerner Company had the following transactions in 2015, its first year of operations.
Issued 20,000 shares of common stock. Stock has par value of $1.00 per share and was issued at $14.00 per share.
Issued 1,000 shares of $100 par value preferred stock. Shares were issued at par.
Earned net income of $35,000.
Paid no dividends.
At the end of 2015, what is the total amount of paid-in capital?
A)$415,000
B)$120,000
C)$280,000
D)$380,000
Q2) Paid-in capital is externally generated capital and results from transactions with outsiders.
A)True
B)False
Q3) A 3-for-1 stock split of a $3 par value share will result in three shares of $1 par value.
A)True
B)False
To view all questions and flashcards with answers, click on the resource link above.
15
Chapter 14: Long-Term Liabilities
Available Study Resources on Quizplus for this Chatper
151 Verified Questions
151 Flashcards
Source URL: https://quizplus.com/quiz/68160
Sample Questions
Q1) If a bond is issued at a discount, it will sell for more than face value.
A)True
B)False
Q2) The balance in the Bonds Payable account is a credit of $89,000. The balance in the Premium on Bonds Payable account is a credit of $990. The bond's carrying amount is $89,990.
A)True
B)False
Q3) The balance in the Bonds Payable account is a credit of $65,000. The balance in the Discount on Bonds Payable account is a debit of $2,250. The bond's carrying amount is $62,750.
A)True
B)False
Q4) Blanding Company issues $1,000,000 of 8%, 10-year bonds at 98 on February 28, 2014. The bonds pay interest on February 28 and August 31. The journal entry to record the issuance would include a:
A)debit to Cash for $1,000,000.
B)credit to Bonds Payable for $980,000.
C)credit to Discount on Bonds Payable for $20,000.
D)debit to Cash for $980,000.
Page 16
To view all questions and flashcards with answers, click on the resource link above.
Chapter 15: Investments
Available Study Resources on Quizplus for this Chatper
135 Verified Questions
135 Flashcards
Source URL: https://quizplus.com/quiz/68161
Sample Questions
Q1) The rate of return on total assets measures:
A)a company's ability to meet its short-term obligations.
B)a company's ability to repay its long-term debt.
C)a company's success in using assets to earn a profit.
D)a company's investing flexibility.
Q2) Jade Investments purchased 40% of the common stock of Ivory Corporation on March 1, 2014. Ivory Corporation reports a net income of $675,000 for the 2015 year. Based on the information provided, which of the following is true of the balance sheet on December 31, 2015?
A)Total assets will remain unchanged.
B)Total liabilities will decrease.
C)Total equity will increase.
D)Cash will increase.
Q3) The Gain on Disposal from trading securities is a(n):
A)current asset account.
B)fixed asset account.
C)liability account.
D)equity account.
To view all questions and flashcards with answers, click on the resource link above.
Chapter 16: The Statement of Cash Flows
Available Study Resources on Quizplus for this Chatper
154 Verified Questions
154 Flashcards
Source URL: https://quizplus.com/quiz/68162
Sample Questions
Q1) Interest Expense paid on a Note Payable would be included in the operating activities section of the statement of cash flows.
A)True
B)False
Q2) Gladiator Inc. uses the direct method to prepare its statement of cash flows. Refer to the following information reported for the year 2014: Cost of Goods Sold, $130,000 Inventory, beginning balance, $25,000 Inventory, ending balance, $65,000
Accounts Payable, beginning balance, $7,500
Accounts Payable, ending balance, $4,900
What is the amount of cash paid for merchandise inventory?
A)$172,600
B)$140,000
C)$170,000
D)$167,400
Q3) The third section presented on the statement of cash flows is the non-cash operating activities section.
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
112 Verified Questions
112 Flashcards
Source URL: https://quizplus.com/quiz/68163
Sample Questions
Q1) Which of the following accurately describes working capital?
A)Current assets minus merchandise inventory
B)Current assets minus current liabilities
C)Total debt minus stockholders' equity
D)Cost of goods sold divided by average merchandise inventory
Q2) Vertical analysis involves comparing each figure in the financial statements with a corresponding figure of the previous year.
A)True
B)False
Q3) The debt ratio is the ratio of total debt divided by total equity.
A)True
B)False
Q4) The income statement is also known as the:
A)statement of operations.
B)statement of cash flows.
C)statement of stockholders' equity.
D)statement of financial position.
Q5) Extraordinary items are unusual and infrequent in nature.
A)True
B)False
Page 19
To view all questions and flashcards with answers, click on the resource link above.
Chapter 18: Introduction to Managerial Accounting
Available Study Resources on Quizplus for this Chatper
179 Verified Questions
179 Flashcards
Source URL: https://quizplus.com/quiz/68164
Sample Questions
Q1) Cost per service is calculated by dividing total costs by total number of services provided.
A)True
B)False
Q2) Which of the following describes a system in which suppliers deliver materials at the time they are needed and finished units are completed when customer orders need to be filled?
A)Supply chain management
B)Just-in-time (JIT)management
C)Enterprise resource planning (ERP)
D)Total quality management (TQM)
Q3) An enterprise resource planning system (ERP):
A)is a cost management system in which a company produces products just in time to satisfy needs.
B)requires the implementation of total quality management.
C)integrates all worldwide functions, departments and data of a company into a single system.
D)cannot be implemented in service companies.
To view all questions and flashcards with answers, click on the resource link above. Page 20
Chapter 19: Job Order Costing
Available Study Resources on Quizplus for this Chatper
152 Verified Questions
152 Flashcards
Source URL: https://quizplus.com/quiz/68165
Sample Questions
Q1) Cost accounting systems are used:
A)to accumulate product cost information.
B)to accumulate and assign period costs to products.
C)by manufacturing companies, not service companies.
D)by stockholders for decision-making purposes.
Q2) Broxsie Fabrication Company issued $60,000 of direct materials and $15,500 of indirect materials to production. Prepare the journal entry to record the transaction.
Q3) Manufacturing Overhead is a temporary account used to ________ indirect production costs during the accounting period.
A)allocate
B)assign
C)accumulate
D)approximate
Q4) Which of the following describes the allocation base for allocating manufacturing overhead costs?
A)the primary cost driver of indirect manufacturing costs
B)the estimated base amount of manufacturing overhead costs in a year
C)the percentage used to allocate direct labor to Work in Process
D)the main element that causes direct costs
To view all questions and flashcards with answers, click on the resource link above. Page 21
Chapter 20: Process Costing
Available Study Resources on Quizplus for this Chatper
144 Verified Questions
144 Flashcards
Source URL: https://quizplus.com/quiz/68166
Sample Questions
Q1) Nexus Inc. uses a process costing system. It prepares a production cost report for each processing department. How will the managers of Nexus use these production cost reports to prepare the balance sheet at the end of an accounting period?
A)to determine the amount of current liabilities of the period
B)to determine the balance of inventory accounts
C)to determine the cost of goods sold during the period
D)to determine the amount of revenues generated during the period
Q2) A production cost report is a part of the financial statements available to the shareholders of a company.
A)True
B)False
Q3) The Raw Materials Inventory account is debited when direct materials are issued for production.
A)True
B)False
Q4) Significant changes in costs are not exposed in a first-in, first-out (FIFO)method.
A)True
B)False
To view all questions and flashcards with answers, click on the resource link above. Page 22
Chapter 21: Cost-Volume-Profit Analysis
Available Study Resources on Quizplus for this Chatper
172 Verified Questions
172 Flashcards
Source URL: https://quizplus.com/quiz/68167
Sample Questions
Q1) Anthony Company's highest point of total cost was $75,000 in June. Their point of lowest cost was $50,000 in December. The company makes a single product. Production volume in June was 13,000 units; production volume in December was 8,000 units. What is the variable cost per unit?
A)$9.38 per unit
B)$6.25 per unit
C)$5.00 per unit
D)$5.77 per unit
Q2) The purpose of managerial accounting is to provide managers with information that is useful for internal decision making.
A)True
B)False
Q3) If the number of units sold is more than number of units produced, the income under both variable and absorption costing would be the same.
A)True
B)False
Q4) Total fixed costs can change from one relevant range to another.
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
114 Verified Questions
114 Flashcards
Source URL: https://quizplus.com/quiz/68168
Sample Questions
Q1) While preparing the budgeted income statement of a merchandiser, the amount of cost of goods sold can be taken from:
A)the budgeted balance sheet.
B)the budgeted cash flow statement.
C)the inventory, purchases and COGS budget.
D)the payment for cost of goods sold.
Q2) After comparing budgets with actual results, corrective action will be taken based on the differences.
A)True
B)False
Q3) Which of the following statements is true of the operating budget?
A)It is a part of the financial budget.
B)It includes the capital expenditures budget.
C)It includes the sales revenue budget.
D)Its final component is the cash budget.
Q4) Use of advanced technology makes it more cost effective for managers to conduct sensitivity analysis.
A)True
B)False
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
173 Verified Questions
173 Flashcards
Source URL: https://quizplus.com/quiz/68169
Sample Questions
Q1) An efficiency variance measures how well a company keeps unit prices of material and labor inputs within standards.
A)True B)False
Q2) The aggregate of direct materials cost and efficiency variances results in total direct materials variance.
A)True B)False
Q3) The fixed overhead volume variance is a volume variance, not a cost variance.
A)True B)False
Q4) A static budget is prepared for only one level of sales volume. A)True B)False
Q5) The exceptions under management by exception can be expressed as a percentage of a budgeted amount or a dollar amount.
A)True B)False
To view all questions and flashcards with answers, click on the resource link above. Page 25
Chapter 24: Cost Allocation and Responsibility Accounting
Available Study Resources on Quizplus for this Chatper
129 Verified Questions
129 Flashcards
Source URL: https://quizplus.com/quiz/68170
Sample Questions
Q1) Which of the following perspectives of the balanced scorecard focuses on revenue growth and productivity?
A)financial perspective
B)customer perspective
C)internal business perspective
D)learning and growth perspective
Q2) Which of the following is the correct formula for asset turnover ratio?
A)Net sales ÷ Average total assets
B)Net sales ÷ Cost of goods sold
C)Net Sales ÷ Net assets
D)Net profit ÷ Net sales
Q3) A high rate of employee turnover indicates that:
A)employees of the organization leave jobs frequently.
B)pay packages of employees are at par with that of industry.
C)the employees' retention ratio is also high.
D)employees also participate in the decision making process.
Q4) Activity-based costing uses a common allocation base for all activities.
A)True
B)False
To view all questions and flashcards with answers, click on the resource link above. Page 26
Chapter 25: Short-Term Business Decisions
Available Study Resources on Quizplus for this Chatper
161 Verified Questions
161 Flashcards
Source URL: https://quizplus.com/quiz/68171
Sample Questions
Q1) Which of the following is a major consideration when analyzing a special order?
A)the price must be high enough to cover any incremental costs to fill the order
B)the company must have a good stock turnover ratio
C)the profit margin of the special sale must be higher than the regular sales
D)the sunk costs of the decision must not exceed the irrelevant costs
Q2) Paragon Products sells a special kind of navigation equipment for $1,200. Variable costs are $900 per unit. When a special order arrived from a foreign contractor to buy 40 units at a reduced price of $1,000 per unit, there was a discussion among management. The controller said that as long as the special price was greater than the variable costs, the sale would contribute to the company's profits, and so it should be accepted as offered. The vice-president, however, decided to decline the order. Which of the following statements, if true, will support the decision of the vice-president?
A)The order is not likely to affect the regular sales.
B)The company is operating at 70% of its production capacity.
C)The variable costs of $900 includes variable costs of packing the product.
D)The company will need to hire additional staff to execute this order.
Q3) Price-setters emphasize a cost-plus pricing approach.
A)True
B)False
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
122 Verified Questions
122 Flashcards
Source URL: https://quizplus.com/quiz/68172
Sample Questions
Q1) An annuity refers to a series of equal cash flows received or paid annually.
A)True
B)False
Q2) Discounted cash flow methods consider the time value of money while evaluating an investment proposal.
A)True
B)False
Q3) Which of the following is the rate of return, based on discounted cash flows, that a company can expect to earn by investing in a capital asset?
A)accounting rate of return (ARR)
B)bank interest rate
C)internal rate of return (IRR)
D)return on investment
Q4) The NPV method of evaluating capital investments suggests that a project with positive net cash inflows that exceed the cost of the investment should be accepted.
A)True
B)False
To view all questions and flashcards with answers, click on the resource link above.
28