Business Accounting
Solved Exam Questions
Course Introduction
Business Accounting explores the fundamental principles and practices essential for measuring, recording, and communicating financial information in a business context. Students will gain an understanding of key accounting concepts such as the accounting cycle, financial statements, journal entries, and the role of ethics in accounting. The course covers topics including asset management, liabilities, equity, revenue recognition, and budgeting. Emphasis is placed on the interpretation and analysis of financial data to support effective decision-making and strategic planning in both small and large organizations.
Recommended Textbook
Fundamental Financial Accounting Concepts 10th Edition by Thomas P Edmonds
Available Study Resources on Quizplus
13 Chapters
1246 Verified Questions
1246 Flashcards
Source URL: https://quizplus.com/study-set/3735
Page 2
Chapter 1: An Introduction to Accounting
Available Study Resources on Quizplus for this Chatper
94 Verified Questions
94 Flashcards
Source URL: https://quizplus.com/quiz/74483
Sample Questions
Q1) At the end of Year 2,retained earnings for the Baker Company was $3,500.Revenue earned by the company in Year 2 was $1,500,expenses paid during the period were $800,and dividends paid during the period were $500.Based on this information alone,what was the amount of retained earnings at the beginning of Year 2?
A)$3,300
B)$3,700
C)$2,800
D)$3,800
Answer: A
Q2) A company's total assets increased during the period while its liabilities and common stock were unchanged.No dividends were declared or paid during the period.Which of the following would explain this situation?
A)Revenues were greater than expenses during the period.
B)Retained earnings were less than net income during the period.
C)No dividends were paid during the period.
D)The company must have purchased assets with cash during the period.
Answer: A
To view all questions and flashcards with answers, click on the resource link above. Page 3
Chapter 2: Accounting for Accruals and Deferrals
Available Study Resources on Quizplus for this Chatper
92 Verified Questions
92 Flashcards
Source URL: https://quizplus.com/quiz/74482
Sample Questions
Q1) What is the amount of net cash flows from operating activities that will be reported on the Year 1 statement of cash flows?
A)$400
B)$600
C)$1,400
D)$1,200
Answer: B
Q2) Which of the following types of accounts is closed at the end of an accounting cycle?
A)Dividends
B)Common stock
C)Assets
D)Liabilities
Answer: A
Q3) Recognizing an expense may be accompanied by which of the following?
A)An increase in liabilities
B)A decrease in liabilities
C)A decrease in revenue
D)An increase in assets
Answer: A
To view all questions and flashcards with answers, click on the resource link above. Page 4
Chapter 3: The Double-Entry Accounting System
Available Study Resources on Quizplus for this Chatper
106 Verified Questions
106 Flashcards
Source URL: https://quizplus.com/quiz/74481
Sample Questions
Q1) The adjusting entry to record expense related to the use of a delivery van would involve which of the following?
A)A debit to Accumulated Depreciation
B)A credit to Delivery Van
C)A debit to Depreciation Expense
D)A debit to Retained Earnings
Answer: C
Q2) Journals are sometimes called books of original entry because transactions are recorded in journals before amounts are entered into the ledger.
A)True
B)False
Answer: True
Q3) An adjusting entry can never be an asset exchange transaction. A)True
B)False
Answer: True
To view all questions and flashcards with answers, click on the resource link above. Page 5
Chapter 4: Accounting for Merchandising Businesses
Available Study Resources on Quizplus for this Chatper
114 Verified Questions
114 Flashcards
Source URL: https://quizplus.com/quiz/74480
Sample Questions
Q1) Which factor has removed most of the practical limitations associated with use of the perpetual inventory system?
A)A more honest work force
B)Recent changes in GAAP
C)Recent changes in federal and state laws
D)Advancements in technology
Q2) Vargas Company sold a piece of land for $39,000 that had originally cost $32,500.How does this business event affect the company's financial statements?
A)An increase in cash flows from investing activities by $39,000.
B)No effect on operating income.
C)An increase in net income by $6,500.
D)All of these answer choices are correct.
Q3) Which of the following account titles is normally used in a periodic inventory system?
A)Transportation-in.
B)Purchases.
C)Purchase Returns and Allowances.
D)All of these answer choices are normally used.
To view all questions and flashcards with answers, click on the resource link above.
Chapter 5: Accounting for Inventories
Available Study Resources on Quizplus for this Chatper
86 Verified Questions
86 Flashcards
Source URL: https://quizplus.com/quiz/74479
Sample Questions
Q1) Which of the following statements is not correct regarding the importance of inventory turnover to a company's profitability?
A)Companies will prefer to have a low inventory turnover rather than a high inventory turnover.
B)It is sometimes more desirable to sell a large amount of merchandise with a small amount of gross margin than a small amount of merchandise with a large amount of gross margin.
C)A company's profitability is affected by how rapidly inventory sells.
D)A company's profitability is affected by the spread between cost and selling price.
Q2) Anton Co.uses the perpetual inventory system and FIFO cost flow method.During the year,Anton purchased 400 units of inventory that cost $12.00 each and then purchased an additional 600 units of inventory that cost $16.00 each.If Anton sells 700 units of inventory,what is the amount of cost of goods sold?
A)$11,200
B)$10,400
C)$8,400
D)$9,600
To view all questions and flashcards with answers, click on the resource link above.
Page 7
Chapter 6: Internal Control and Accounting for Cash
Available Study Resources on Quizplus for this Chatper
82 Verified Questions
82 Flashcards
Source URL: https://quizplus.com/quiz/74478
Sample Questions
Q1) Which of the following statements about the materiality concept is not true?
A)Materiality is different for each company.
B)A material error would change the opinion of the average prudent investor.
C)Any error greater than $5,000 is considered material in a financial statement audit.
D)Material misstatements should not exist in order for a company to receive an unqualified audit opinion.
Q2) Requiring segregation of duties in a business eliminates the need for the work of one employee to serve as a check on the work of other employees.
A)True
B)False
Q3) A business learns about customers' NSF checks through debit memos that are included with the bank statement.
A)True
B)False
Q4) Segregation of duties in an organization should be required to reduce the likelihood of theft.
A)True
B)False
To view all questions and flashcards with answers, click on the resource link above.
8
Chapter 7: Accounting for Receivables
Available Study Resources on Quizplus for this Chatper
83 Verified Questions
83 Flashcards
Source URL: https://quizplus.com/quiz/74477
Sample Questions
Q1) Elliston Company accepted credit card payments for $10,000 of services provided to customers.The credit card company charges a 3% fee for handling the transaction.Which of the following describes the effect of this transaction?
A)Increase revenue by $9,700
B)Increase assets by $10,000
C)Increase stockholders' equity (retained earnings)by $9,700
D)Increase net income by $10,000
Q2) Making a loan to another party is considered an investing activity on the statement of cash flows.
A)True B)False
Q3) Most companies report receivables on their balance sheets at the net realizable value.
A)True
B)False
Q4) When an uncollectible account receivable is written off,the amount of total assets is unchanged.
A)True B)False
To view all questions and flashcards with answers, click on the resource link above. Page 9
Chapter 8: Accounting for Long-Term Operational Assets
Available Study Resources on Quizplus for this Chatper
110 Verified Questions
110 Flashcards
Source URL: https://quizplus.com/quiz/74476
Sample Questions
Q1) On January 1,Year 1,Friedman Company purchased a truck that cost $48,000.The truck had an expected useful life of 100,000 miles over 8 years and an $8,000 salvage value.During Year 2,Friedman drove the truck 18,500 miles.Friedman uses the units-of-production method.What is depreciation expense in Year 2?
A)$8,880
B)$7,400
C)$6,000
D)$5,000
Q2) Anchor Company purchased a manufacturing machine with a list price of $160,000 and received a 2% cash discount on the purchase.The machine was delivered under terms FOB shipping point,and transportation costs amounted to $2,400.Anchor paid $3,000 to have the machine installed and tested.Insurance costs to protect the asset from fire and theft amounted to $3,600 for the first year of operations.What is the cost of the machine?
A)$156,800
B)$159,200
C)$165,800
D)$162,200
To view all questions and flashcards with answers, click on the resource link above. Page 10
Chapter 9: Accounting for Current Liabilities and Payroll
Available Study Resources on Quizplus for this Chatper
86 Verified Questions
86 Flashcards
Source URL: https://quizplus.com/quiz/74475
Sample Questions
Q1) FICA taxes are recorded both as salary expense and as payroll tax expense.
A)True
B)False
Q2) On a classified balance sheet,the financial statement user will be able to distinguish between:
A)cash flow from operations and cash flow from investing activities.
B)current and noncurrent assets.
C)product and period costs.
D)none of these answer choices are correct.
Q3) On September 1,Year 1,West Company borrowed $10,000 from Valley Bank.West agreed to pay interest annually at the rate of 6% per year.The note issued by West carried an 18-month term.West Company has a calendar year-end.What is the amount of interest expense that will be reported on West's income statement for Year 1?
A)$-0-
B)$150
C)$60
D)$200
To view all questions and flashcards with answers, click on the resource link above. Page 11
Chapter 10: Accounting for Long-Term Debt
Available Study Resources on Quizplus for this Chatper
105 Verified Questions
105 Flashcards
Source URL: https://quizplus.com/quiz/74474
Sample Questions
Q1) Kier Company issued $200,000 in bonds on January 1,Year 1.The bonds were issued at face value and carried a 4-year term to maturity.The bonds have a 6.5% stated rate of interest and interest is payable in cash on December 31 each year.Based on this information alone,what are the amounts of interest expense and cash flows from operating activities,respectively,that will be reported in the financial statements for the year ending December 31,Year 1?
A)$13,000 and Zero
B)Zero and $13,000
C)$13,000 and $13,000
D)Zero and Zero
Q2) Davis Corporation borrowed $50,000 on January 1,Year 1.The loan is for a 5-year period and has an annual interest rate of 9%.At the end of each year,Davis will make a payment of $7,791,which includes both principal and interest.The amount of the payment for Year 1 that is interest expense is $4,500.
A)True
B)False
Q3) Amortization of a discount on bonds payable is an asset use transaction.
A)True
B)False
To view all questions and flashcards with answers, click on the resource link above.
Page 12
Chapter 11: Proprietorships,partnerships,and Corporations
Available Study Resources on Quizplus for this Chatper
92 Verified Questions
92 Flashcards
Source URL: https://quizplus.com/quiz/74473
Sample Questions
Q1) Treasury Stock is reported on the balance sheet between the liabilities and stockholders' equity sections.
A)True
B)False
Q2) At the end of the accounting period,Houston Company had $12,000 of common stock,paid-in capital in excess of par value-common of $11,000,retained earnings of $12,000,and $4,000 of treasury stock.What is the total amount of stockholders' equity?
A)$37,000
B)$39,000
C)$19,000
D)$31,000
Q3) A partner is responsible for his/her own actions,but not for actions taken by another partner on behalf of the partnership.
A)True
B)False
Q4) Preferred stockholders generally have no voting rights in a corporation. A)True
B)False
To view all questions and flashcards with answers, click on the resource link above.
13
Chapter 12: Statement of Cash Flows
Available Study Resources on Quizplus for this Chatper
88 Verified Questions
88 Flashcards
Source URL: https://quizplus.com/quiz/74472
Sample Questions
Q1) Which method of reporting cash flows from operating activities is used by most businesses in preparing the statement of cash flows?
A)Accrual method
B)Direct method
C)Indirect method
D)Computational method
Q2) Middleton Corporation reported utilities expense of $18,200 on its income statement for Year 1.For the year,the beginning balance in Utilities Payable was $2,500 and the ending balance was $1,500.The amount of cash that Mayes paid for utilities in Year 1 was $19,200.
A)True
B)False
Q3) Which of the following is an incorrect statement of one of the rules for converting net income to the cash flow from operating activities using the indirect method?
A)Increases in current assets are subtracted from net income.
B)Decreases in current assets are added to net income.
C)Gains are added to net income.
D)Increases in current liabilities are added to net income.
To view all questions and flashcards with answers, click on the resource link above. Page 14
Chapter 13: Financial Statement Analysis
Available Study Resources on Quizplus for this Chatper
108 Verified Questions
108 Flashcards
Source URL: https://quizplus.com/quiz/74471
Sample Questions
Q1) Lilly's Corporation has working capital of $620,000,and Harmon Corporation has working capital of $840,000.Which of the following statements is not true?
A)Since working capital is an absolute amount,other factors such as size of the company and materiality will help to determine liquidity of these two companies.
B)Since Harmon's working capital exceeds Lilly's working capital,it is safe to conclude that Harmon is more liquid than Lilly.
C)If Lilly Corporation is smaller than Harmon or has lower current liabilities;Lilly could be more liquid than Harmon.
D)None of these answers is correct.
Q2) A limitation of financial statement analysis stems from the discretion of management to choose accounting procedures that cast the best light on the firm's performance.
A)True B)False
Q3) The quick ratio although similar to the current ratio is more conservative.
A)True B)False
To view all questions and flashcards with answers, click on the resource link above. Page 15