Business Accounting
Solved Exam Questions
Course Introduction
Business Accounting provides students with a foundational understanding of financial and managerial accounting principles essential for effective business decision-making. The course covers key topics such as the preparation and analysis of financial statements, the accounting cycle, internal controls, and the interpretation of financial information. Students will also explore budgeting, cost behavior, and performance evaluation, gaining practical skills to assess an organization's financial health and support planning and control functions. Emphasis is placed on ethical practices and the use of accounting information in real-world business scenarios.
Recommended Textbook
Financial Accounting 13th Edition by Carl S. Warren
Available Study Resources on Quizplus
17 Chapters
3045 Verified Questions
3045 Flashcards
Source URL: https://quizplus.com/study-set/3894
Page 2
Chapter 1: Introduction to Accounting and Business
Available Study Resources on Quizplus for this Chatper
186 Verified Questions
186 Flashcards
Source URL: https://quizplus.com/quiz/77537
Sample Questions
Q1) An example of a general-purpose financial statement would be a report about projected price increases related to transportation costs.
A)True
B)False
Answer: False
Q2) Which of the following is true in regards to a Limited Liability Company?
A) Makes up 10% of business organizations in the United States.
B) Combines the attributes of a partnership and a corporation.
C) Provides tax and liability advantages to the owners.
D) All are correct.
Answer: D
Q3) About 90% of the businesses in the United States are organized as corporations.
A)True
B)False
Answer: False
Q4) Paying an account payable increases liabilities and decreases assets.
A)True
B)False Answer: False
To view all questions and flashcards with answers, click on the resource link above. Page 3
Chapter 2: Analyzing Transactions
Available Study Resources on Quizplus for this Chatper
225 Verified Questions
225 Flashcards
Source URL: https://quizplus.com/quiz/77538
Sample Questions
Q1) Journalizing eliminates fraud.
A)True
B)False
Answer: False
Q2) The process of transferring the debits and credits from the journal entries to the accounts is known as "updating the accounts".
A)True
B)False
Answer: False
Q3) Assets are increased with debits and decreased with credits.
A)True
B)False
Answer: True
Q4) Which group of accounts is comprised of only assets?
A) Cash, Accounts Payable, Buildings
B) Accounts Receivable, Revenue, Cash
C) Prepaid Expenses, Buildings, Patents
D) Unearned Revenues, Prepaid Expenses, Cash Answer: C
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
177 Verified Questions
177 Flashcards
Source URL: https://quizplus.com/quiz/77539
Sample Questions
Q1) The prepaid insurance account had a beginning balance of $6,600 and was debited for $2,300 of premiums paid during the year. Journalize the adjusting entry required at the end of the year assuming the amount of unexpired insurance related to future periods is $4,100.
Answer: 11ea8f91_7c8e_6d52_b161_93f0df91e04f_TB2085_00_TB2085_00_TB2085_00 $6,600 + $2,300 - $4,100 = $4,800
Q2) Deferred expenses have
A) not yet been recorded as expenses or paid
B) been recorded as expenses and paid
C) been incurred and paid
D) not yet been recorded as expenses
Answer: D
Q3) Which of the following is an example of an accrued expense?
A) Salary owed but not yet paid
B) Fees received but not yet earned
C) Supplies on hand
D) A two-year premium paid on a fire insurance policy
Answer: A
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
190 Verified Questions
190 Flashcards
Source URL: https://quizplus.com/quiz/77540
Sample Questions
Q1) After net income is entered on the work sheet, the Balance Sheet debit and credit columns must
A) be the same amount as the total amount of the Income Statement debit and credit columns
B) equal each other
C) be the same amount as the total amount in the Adjusted Trial Balance debit and credit columns
D) not be equal to each other and need not be the same total amounts as any other pair of columns on the work sheet
Q2) Any twelve-month accounting period adopted by a company is known as its fiscal year.
A)True
B)False
Q3) Since the adjustments are entered on the work sheet, it is necessary to record them in the journal or post them to the ledger.
A)True
B)False
Q4) If working papers are not considered part of the formal accounting records, then why are they used?
To view all questions and flashcards with answers, click on the resource link above. Page 6
Chapter 5: Accounting Systems
Available Study Resources on Quizplus for this Chatper
158 Verified Questions
158 Flashcards
Source URL: https://quizplus.com/quiz/77541
Sample Questions
Q1) A cash investment made by the owner should be recorded on the A) cash receipts journal
B) purchases journal
C) cash payments journal
D) revenue journal
Q2) The post reference column of the revenue journal will reference the account number of the customer.
A)True
B)False
Q3) Segment data:
A) can be used for vertical, but not horizontal analysis.
B) is gathered from invoice data.
C) is only useful by product line.
D) analysis is required by GAAP.
Q4) Services provided for cash is recorded in the revenue journal.
A)True
B)False
Q5) What is a business segment? How can business segments be analyzed?
Q6) Define and describe an accounting system.
Q7) Describe and discuss e-commerce.
To view all questions and flashcards with answers, click on the resource link above. Page 7
Chapter 6: Accounting for Merchandising Businesses
Available Study Resources on Quizplus for this Chatper
214 Verified Questions
214 Flashcards
Source URL: https://quizplus.com/quiz/77542
Sample Questions
Q1) A retailer purchases merchandise with a catalog list price of $25,000. The retailer receives a 30% trade discount and credit terms of 2/10, n/30. What amount should the retailer debit to the Merchandise Inventory account?
A) $7,500
B) $17,500
C) $25,000
D) $17,250
Q2) Discuss the following statement: "Operating cycles for all merchandising businesses are the same, with similar profit margins."
Include an example(s) to illustrate your explanation.
Q3) Under the periodic inventory system, the journal entry to record the purchase of merchandise inventory will include a debit to
A) Merchandise Inventory
B) Purchases
C) Accounts Payable
D) Cost of Merchandise Purchased
To view all questions and flashcards with answers, click on the resource link above.
8
Chapter 7: Inventories
Available Study Resources on Quizplus for this Chatper
167 Verified Questions
167 Flashcards
Source URL: https://quizplus.com/quiz/77543
Sample Questions
Q1) Under the LIFO inventory costing method, the most recent costs are assigned to ending inventory.
A)True
B)False
Q2) A purchase order establishes an initial record of the receipt of the inventory.
A)True
B)False
Q3) If a company uses the periodic inventory system to cost its inventory, the gross profit method is a method that can be used to check on theft when the actual inventory is taken by the company.
A)True
B)False
Q4) If a manufacturer ships merchandise to a retailer on consignment, the unsold merchandise should be included in the inventory of the
A) consignee
B) retailer
C) manufacturer
D) shipper
Q5) List three different security measures taken by stores to safeguard inventory.
To view all questions and flashcards with answers, click on the resource link above. Page 9
Chapter 8: Sarbanes-Oxley, Internal Control, and Cash
Available Study Resources on Quizplus for this Chatper
174 Verified Questions
174 Flashcards
Source URL: https://quizplus.com/quiz/77544
Sample Questions
Q1) The bank reconciliation
A) should be prepared by an employee who records cash transactions
B) is part of the internal control system
C) is for information purposes only
D) is sent to the bank for verification
Q2) In the normal operation of business you receive a check from a customer and deposit it into your checking account. With your bank statement you are advised that this check for $775 is "NSF". The bank also informs you that due to the amount of activity on your business account the monthly service charge is $75. During a bank reconciliation, you will:
A) subtract both values from balance according to bank.
B) add both values from balance according to books.
C) add both values from balance according to bank.
D) subtract both values from balance according to books.
Q3) A customer's check received in settlement of an account receivable is considered cash.
A)True
B)False
Q4) Why would a bank require a company to maintain a compensating balance?
Q5) List and define each of the five elements of internal control.
Page 10
To view all questions and flashcards with answers, click on the resource link above.
Chapter 9: Receivables
Available Study Resources on Quizplus for this Chatper
147 Verified Questions
147 Flashcards
Source URL: https://quizplus.com/quiz/77545
Sample Questions
Q1) Tanning Company analyzes its receivables to estimate bad debt expense. The accounts receivable balance is $390,000 and credit sales are $1,300,000. An aging of accounts receivable shows that approximately 5% of the outstanding receivables will be uncollectible. What adjusting entry will Tanning Company make if the Allowance for Doubtful Accounts has a credit balance of $2,500 before adjustment?
A) Bad Debt Expense 17,000 Allowance for Doubtful Accounts 17,000
B) Bad Debt Expense 19,500 Allowance for Doubtful Accounts 19,500
C) Bad Debt Expense 22,000 Allowance for Doubtful Accounts 22,000
D) Bad Debt Expense 65,000 Allowance for Doubtful Accounts 65,000
Q2) The accounts receivable turnover measures the length of time in days it takes to collect a receivable.
A)True
B)False
Q3) Other than accounts receivable and notes receivable, name other receivables that might be included in the general ledger.
Q4) Discuss the two methods for recording bad-debt expense. What type of company uses each method?
Q5) List at least three things that indicate a receivable may be uncollectible.
To view all questions and flashcards with answers, click on the resource link above. Page 11
Chapter 10: Fixed Assets and Intangible Assets
Available Study Resources on Quizplus for this Chatper
168 Verified Questions
168 Flashcards
Source URL: https://quizplus.com/quiz/77546
Sample Questions
Q1) The units of production depreciation method provides a good match of expenses against revenue.
A)True
B)False
Q2) Which of the following is included in the cost of land?
A) cost of paving a parking lot
B) brokerage commission
C) outdoor parking lot lighting attached to the land
D) fences on the land
Q3) Expenditures that add to the utility of fixed assets for more than one accounting period are
A) committed expenditures
B) revenue expenditures
C) utility expenditures
D) capital expenditures
Q4) The method used to calculate the depletion of a natural resource is the straight line method.
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
171 Verified Questions
171 Flashcards
Source URL: https://quizplus.com/quiz/77547
Sample Questions
Q1) Generally, all deductions made from an employee's gross pay are required by law.
A)True
B)False
Q2) The journal entry a company uses to record the issuance of a discounted note for the purpose of borrowing funds for the business is
A) debit Cash and Interest Expense; credit Notes Payable
B) debit Cash and Interest Payable; credit Notes Payable
C) debit Accounts Payable; credit Notes Payable
D) debit Notes Payable; credit Cash
Q3) Assume that social security taxes are payable at a 6% rate on the first $100,000 of earnings and Medicare taxes are payable at a 1.5% rate with no maximum earnings, and that federal and state unemployment compensation taxes total 4.6% on the first $7,000 of earnings. If an employee, George Jones, earns $2,500 for the current week and Jones' year-to-date earnings before this week were $6,800, what is the total payroll taxes related to the current week?
A) $187.50
B) $196.70
C) $344.50
D) $9.20
To view all questions and flashcards with answers, click on the resource link above.
Page 13
Chapter 12: Accounting for Partnerships and Limited Liability Companies
Available Study Resources on Quizplus for this Chatper
188 Verified Questions
188 Flashcards
Source URL: https://quizplus.com/quiz/77548
Sample Questions
Q1) A partnership liquidation occurs when
A) a new partner is admitted
B) a partner dies
C) the ownership interest of one partner is sold to a new partner
D) the assets are sold, liabilities paid, and business operations terminated
Q2) Xavier and Yolonda have original investments of $50,000 and $100,000 respectively in a partnership. The articles of partnership include the following provisions regarding the division of net income: interest on original investment at 10%, salary allowances of $27,000 and $18,000 respectively, and the remainder equally. How much of the net income of $40,000 is allocated to Xavier?
A) $20,000
B) $22,000
C) $32,000
D) $0
Q3) When a new partner is admitted by making an investment of assets in the partnership and the new partner has to pay a premium for admission, a bonus is divided among the old partners' capital accounts.
A)True
B)False
Page 14
To view all questions and flashcards with answers, click on the resource link above.
Chapter 13: Corporations: Organization, Stock Transactions, and Dividends
Available Study Resources on Quizplus for this Chatper
163 Verified Questions
163 Flashcards
Source URL: https://quizplus.com/quiz/77549
Sample Questions
Q1) Which of the following is not a prerequisite to paying a cash dividend?
A) formal action by the board of directors
B) market value in excess of par value per share
C) sufficient cash
D) sufficient retained earnings
Q2) Which of the following is not characteristic of a corporation?
A) The financial loss that a stockholder may suffer from owning stock in a public company is limited.
B) Cash dividends paid by a corporation are deductible as expenses by the corporation.
C) A corporation can own property in its name.
D) Corporations are required to file federal income tax returns.
Q3) If a company has preferred stock, the preferred stock dividend is added to net income when computing earnings per common share.
A)True
B)False
Q4) On May 1, 10,000 shares of $10 par common stock were issued at $30, and on May 7, 5,000 shares of $50 par preferred stock were issued at $111. Journalize the entries for May 1 and May 7.
Page 15
To view all questions and flashcards with answers, click on the resource link above.
Chapter 14: Long-Term Liabilities: Bonds and Notes
Available Study Resources on Quizplus for this Chatper
184 Verified Questions
184 Flashcards
Source URL: https://quizplus.com/quiz/77550
Sample Questions
Q1) A corporation issues for cash $2,000,000 of 8%, 15-year bonds, interest payable annually, at a time when the market rate of interest is 7%. The straight-line method is adopted for the amortization of bond discount or premium. Which of the following statements is true?
A) The carrying amount increases from its amount at issuance date to $2,000,000 at maturity.
B) The carrying amount decreases from its amount at issuance date to $2,000,000 at maturity.
C) The amount of annual interest paid to bondholders increases over the 15-year life of the bonds.
D) The amount of annual interest expense decreases as the bonds approach maturity.
Q2) When a corporation issues bonds, it executes a contract with the bondholders, known as a bond debenture.
A)True
B)False
Q3) The issue price of zero-coupon bonds is the present value of their face amount. A)True B)False
To view all questions and flashcards with answers, click on the resource link above. Page 16
Chapter 15: Investments and Fair Value Accounting
Available Study Resources on Quizplus for this Chatper
129 Verified Questions
129 Flashcards
Source URL: https://quizplus.com/quiz/77551
Sample Questions
Q1) The account Valuation Allowance for Trading Securities is found on the:
A) Income statement as Other Revenue (Expenses)
B) Balance sheet as an adjustment to the asset account
C) Balance sheet as an adjustment to Stockholders' Equity
D) Statement of Retained Earnings
Q2) Held-to-maturity securities maturing beyond a year are reported as noncurrent assets.
A)True
B)False
Q3) Trading securities should be reported on the financial statements at fair market value.
A)True
B)False
Q4) The equity method causes the investment account to mirror the proportional changes in book value of the investee.
A)True
B)False
Q5) Discuss the similarities and differences in reporting trading securities, available-for-sale securities and held-to-maturity securities.
To view all questions and flashcards with answers, click on the resource link above. Page 17
Chapter 16: Statement of Cash Flows
Available Study Resources on Quizplus for this Chatper
154 Verified Questions
154 Flashcards
Source URL: https://quizplus.com/quiz/77552
Sample Questions
Q1) On the statement of cash flows prepared by the indirect method, the cash flows from operating activities section would include
A) receipts from the sale of investments
B) amortization of premium on bonds payable
C) payments for cash dividends
D) receipts from the issuance of capital stock
Q2) On the statement of cash flows, the cash flows from investing activities section would include
A) receipts from the issuance of capital stock
B) payments for dividends
C) payments for retirement of bonds payable
D) receipts from the sale of investments
Q3) Free cash flow is the measure of operating cash flow available for corporate purposes after providing sufficient fixed asset additions to maintain current productive capacity and dividends.
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
184 Verified Questions
184 Flashcards
Source URL: https://quizplus.com/quiz/77553
Sample Questions
Q1) Factors which reflect the ability of a business to pay its debts and earn a reasonable amount of income are referred to as solvency and profitability.
A)True
B)False
Q2) Assuming that the quantities of inventory on hand during the current year were sufficient to meet all demands for sales, a decrease in the inventory turnover for the current year when compared with the turnover for the preceding year indicates an improvement in inventory management.
A)True
B)False
Q3) Why would you or why wouldn't you compare an organization like Ford Motor Company to the local car dealer "Johnson City Ford/Lincoln/Mercury" in vertical and horizontal analysis?
Q4) In horizontal analysis, the current year is the base year.
A)True
B)False
Q5) What is a major advantage of using percentages rather than dollar changes in doing horizontal and vertical analysis?
To view all questions and flashcards with answers, click on the resource link above. Page 19