Financial Accounting II
Chapter Exam Questions
Course Introduction
Financial Accounting II builds on foundational accounting principles introduced in earlier coursework, focusing on the complex aspects of financial reporting and analysis. The course covers advanced topics such as revenue recognition, accounting for leases, income taxes, pensions, and shareholders equity. Students will explore the preparation and interpretation of financial statements in accordance with international and national accounting standards, and develop skills for addressing ethical and practical challenges in financial disclosures. Through case studies and problem-solving exercises, learners will deepen their understanding of how financial information is used by various stakeholders in decision-making processes.
Recommended Textbook
Financial Accounting 12th Edition by C.
William Thomas
Available Study Resources on Quizplus
14 Chapters
2062 Verified Questions
2062 Flashcards
Source URL: https://quizplus.com/study-set/3740
Page 2
Chapter 1: The Financial Statements
Available Study Resources on Quizplus for this Chatper
191 Verified Questions
191 Flashcards
Source URL: https://quizplus.com/quiz/74557
Sample Questions
Q1) On January 1,2019,total assets for Wininger Technologies were $136,000;on December 31,2019,total assets were $157,000.On January 1,2019,total liabilities were $110,000;on December 31,2019,total liabilities were $118,000.What is the amount of the change and the direction of the change in Wininger Technologies' stockholders' equity for 2019?
A)decrease of $13,000
B)increase of $13,000
C)increase of $29,000
D)decrease of $29,000
Answer: B
Q2) Relevance is one of the four enhancing qualitative characteristics.
A)True
B)False
Answer: False
Q3) Notes payable (due in 60 days)would appear on the balance sheet as a:
A)current liability.
B)current asset.
C)long-term asset.
D)long-term liability.
Answer: A
To view all questions and flashcards with answers, click on the resource link above.
Page 3
Chapter 2: Transaction Analysis
Available Study Resources on Quizplus for this Chatper
196 Verified Questions
196 Flashcards
Source URL: https://quizplus.com/quiz/74556
Sample Questions
Q1) The balance of an account is the difference between the account's total debits and total credits.
A)True
B)False
Answer: True
Q2) If the sum of the credits to an account exceed the sum of the debits to the account,the account will have a credit balance.
A)True
B)False
Answer: True
Q3) Which transaction increases stockholders' equity?
A)sale of common stock
B)dividends that are declared and paid
C)expenses greater than revenues for the period
D)payment of operating expenses
Answer: A
Q4) Every business transaction involves at least one debit and at least one credit.
A)True
B)False
Answer: True
To view all questions and flashcards with answers, click on the resource link above. Page 4
Chapter 3: Accrual Accounting Income
Available Study Resources on Quizplus for this Chatper
223 Verified Questions
223 Flashcards
Source URL: https://quizplus.com/quiz/74555
Sample Questions
Q1) On a multistep income statement,"Other income (expenses),net":
A)includes sales returns and depreciation expense.
B)includes interest income and other investment income.
C)is seldom used because investors do not understand what is included.
D)includes dividend expense.
Answer: B
Q2) In an unadjusted trial balance,the accounts are not yet ready for the preparation of the company's financial statements.
A)True
B)False
Answer: True
Q3) Why is the income statement prepared first and the balance sheet prepared last?
Answer: The income statement reports net income or net loss,the result of revenues minus expenses.Revenues and expenses affect stockholders' equity,thus net income is then transferred to retained earnings.
The ending balance of retained earnings is the final balancing element of the balance sheet.The amount is taken from the statement of retained earnings.
To view all questions and flashcards with answers, click on the resource link above. Page 5
Chapter 4: Internal Control Cash
Available Study Resources on Quizplus for this Chatper
165 Verified Questions
165 Flashcards
Source URL: https://quizplus.com/quiz/74554
Sample Questions
Q1) A company can limit employees' access to assets by:
A)keeping the supply of unused checks under lock and key.
B)processing the company's cash payments through one employee who handles the bookkeeping and the check preparation.
C)allowing persons who have record-keeping responsibilities be part of the mailroom function.
D)all of the above.
Q2) Small companies cannot have internal controls since they do not have enough employees to segregate duties.
A)True
B)False
Q3) The bookkeeper recorded a deposit of $100 as $10.On the bank reconciliation,this will be a(n):
A)addition of $90 to the balance per bank.
B)subtraction of $90 from the balance per bank.
C)addition of $90 to the balance per books.
D)subtraction of $90 to the balance per books.
Q4) List and briefly discuss the five objectives of internal control.
Q5) List the five internal control procedures.
To view all questions and flashcards with answers, click on the resource link above. Page 6
Chapter 5: Receivables and Revenue
Available Study Resources on Quizplus for this Chatper
156 Verified Questions
156 Flashcards
Source URL: https://quizplus.com/quiz/74553
Sample Questions
Q1) The entry to write off an Account Receivable under the allowance method:
A)reduces total assets and increases net income.
B)reduces net income and total assets.
C)has no effect on total assets and net income.
D)increases net income and total assets.
Q2) The direct write-off method for uncollectible accounts receivable:
A)reports receivables at their net realizable value.
B)does not use an Allowance for Uncollectible Accounts.
C)is considered to follow Generally Accepted Accounting Principles.
D)estimates uncollectible accounts as a percentage of sales.
Q3) A company that uses the allowance method,writes-off a receivable of $3,000.Prior to the journal entry,the credit balance in the Allowance for Uncollectible Accounts was $23,432 and Accounts Receivable were $2,009,000.After the entry to write-off the receivable is made,the net realizable value of Accounts Receivable will be:
A)$1,982,568.
B)$1,985,568.
C)$2,006,000.
D)$2,009,000.
To view all questions and flashcards with answers, click on the resource link above.
7
Chapter 6: Inventory Cost of Goods Sold
Available Study Resources on Quizplus for this Chatper
165 Verified Questions
165 Flashcards
Source URL: https://quizplus.com/quiz/74552
Sample Questions
Q1) In the periodic inventory system,the Inventory account is debited for the purchases made during the year.
A)True
B)False
Q2) To determine the cost of goods sold,to report on the income statement,multiply the number of units of inventory:
A)sold times the retail price per unit.
B)sold times the cost per unit.
C)purchased times the retail price per unit.
D)purchased times the cost per unit.
Q3) Boston Company sells thirty items for $800 per unit and has a cost of goods sold per unit of $480.The gross profit to be reported for selling 30 items is:
A)$320.
B)$9,600.
C)$14,400.
D)$24,000.
Q4) How does the disclosure principle help financial statements users compare the financial statements of retailers,with regard to inventories?
To view all questions and flashcards with answers, click on the resource link above.
Chapter 7: Plant Assets, natural Resources, Intangibles
Available Study Resources on Quizplus for this Chatper
194 Verified Questions
194 Flashcards
Source URL: https://quizplus.com/quiz/74551
Sample Questions
Q1) Most intangible assets have a residual value.
A)True
B)False
Q2) On January 4,2019,Mary's Cafe acquired equipment for $500,000.The estimated life of the equipment is 8 years or 60,000 hours.The estimated residual value is $40,000.What is the balance in the Accumulated Depreciation account at December 31,2020 if the straight-line method is used?
A)$40,000
B)$62,500
C)$115,000
D)$57,500
Q3) The journal entry to record depreciation expense for equipment is:
A)debit Depreciation Expense,credit Equipment.
B)debit Accumulated Depreciation - Equipment,credit Equipment.
C)debit Equipment,credit Accumulated Depreciation - Equipment.
D)debit Depreciation Expense - Equipment,credit Accumulated DepreciationEquipment.
Q4) a.What does the net profit margin ratio measure?
b.List three ways in which this ratio can be increased.
To view all questions and flashcards with answers, click on the resource link above. Page 9
Chapter 8: Current and Contingent Liabilities
Available Study Resources on Quizplus for this Chatper
111 Verified Questions
111 Flashcards
Source URL: https://quizplus.com/quiz/74550
Sample Questions
Q1) Long-term notes payable are usually used to buy items such as:
A)building.
B)equipment.
C)equity investments.
D)all of the above.
Q2) At the end of the year,a company makes a journal entry to accrue the interest expense on a short-term note payable.As a result of this transaction:
A)current liabilities increase and current assets increase.
B)current liabilities increase and stockholders' equity increases.
C)current liabilities decrease and stockholders' equity decreases.
D)current liabilities increase and stockholders' equity decreases.
Q3) Accounts payable turnover measures the number of times per day the company is able to pay its accounts payable.
A)True
B)False
Q4) Current liabilities are expected to be paid within one year or the operating cycle,whichever is shorter.
A)True
B)False
To view all questions and flashcards with answers, click on the resource link above. Page 10
Chapter 9: Long-Term Liabilities
Available Study Resources on Quizplus for this Chatper
120 Verified Questions
120 Flashcards
Source URL: https://quizplus.com/quiz/74549
Sample Questions
Q1) Bonds with a 6% interest rate were issued when the market rate of interest was 7%.The quoted bond price will be:
A)greater than 100.
B)less than 100.
C)100.
D)greater than 1000.
Q2) The times-interest-earned ratio is calculated by dividing operating income by operating expenses.
A)True
B)False
Q3) Unsecured bonds are called ________.Secured bonds are called ________.
A)convertible bonds;callable bonds
B)term bonds;serial bonds
C)debentures;mortgage bonds
D)regular bonds;special bonds
Q4) Premium on Bonds Payable:
A)has a debit balance.
B)is a contra account to bonds payable.
C)has a credit balance.
D)is deducted from bonds payable on the balance sheet.
To view all questions and flashcards with answers, click on the resource link above. Page 11
Chapter 10: Stockholders Equity
Available Study Resources on Quizplus for this Chatper
151 Verified Questions
151 Flashcards
Source URL: https://quizplus.com/quiz/74548
Sample Questions
Q1) A corporation is an entity that is not separate from its owners.
A)True
B)False
Q2) Which of the following is NOT considered to be an advantage of forming a corporation?
A)continuous life
B)government regulation
C)ability to raise more capital than a partnership or proprietorship
D)limited liability of stockholders for corporation's debts
Q3) If a corporation pays taxes on its income,then the stockholders will not have to pay taxes on the dividends received from that corporation.
A)True
B)False
Q4) The purchase of treasury stock is reported on the statement of cash flows as a financing activity.
A)True
B)False
Q5) What is the formula for the price-earnings ratio? What does this ratio measure?
Q6) List three reasons why corporations purchase their own stock.
Page 12
To view all questions and flashcards with answers, click on the resource link above.
Chapter 11: The Statement of Cash Flows
Available Study Resources on Quizplus for this Chatper
146 Verified Questions
146 Flashcards
Source URL: https://quizplus.com/quiz/74547
Sample Questions
Q1) On a statement of cash flows,activities that affect long-term assets are classified as:
A)operating activities.
B)investing activities.
C)financing activities.
D)stockholders' equity activities.
Q2) Net cash provided by operating activities is $2.9 million.Planned capital expenditures are $2.4 million.Depreciation expense is $1.2 million per year.What is free cash flow?
A)($700,000)
B)$500,000
C)$1,200,000
D)$1,700,000
Q3) The direct method of preparing the statement of cash flows:
A)has an identical operating activities section as the indirect method.
B)is used by a vast majority of companies.
C)is preferred by FASB.
D)is much easier for companies to compute.
To view all questions and flashcards with answers, click on the resource link above.
13
Chapter 12: Financial Statement Analysis
Available Study Resources on Quizplus for this Chatper
120 Verified Questions
120 Flashcards
Source URL: https://quizplus.com/quiz/74546
Sample Questions
Q1) An auditors' report by independent accountants (auditors):
A)gives investors assurance that the company's financial statements conform to GAAP.
B)ensures that the financial statements are error-free.
C)gives investors assurance that the company's stock is a safe investment.
D)is ultimately the responsibility of the management of the client company.
Q2) Every public company's annual report filed begins with the income statement.
A)True
B)False
Q3) Which of the following is typically used as the base in a vertical analysis of a balance sheet?
A)total liabilities
B)total stockholders' equity
C)total assets
D)net sales
Q4) Horizontal analysis compares a financial statement line item in the current year with the same line item in the prior year.
A)True
B)False
To view all questions and flashcards with answers, click on the resource link above.
Page 14
Chapter 13: Investments
Available Study Resources on Quizplus for this Chatper
83 Verified Questions
83 Flashcards
Source URL: https://quizplus.com/quiz/74559
Sample Questions
Q1) On January 1,2019,Dooley Company purchases $92,000,6% bonds at a price of 90.8 and a maturity date of January 1,2029.Dooley Company intends to hold the bonds until their maturity date and has the ability to do so.Interest is paid semiannually,on January 1 and July 1.Dooley Company has a calendar year end.The entry for the receipt of interest on July 1,2019 is:
A)debit Cash for $2,760 and credit Interest Revenue for $2,760.
B)debit Cash for $5,520 and credit Interest Revenue for $5,520.
C)debit Investment in Bonds for $2,760 and credit Interest Revenue for 2,760.
D)debit Investment in Bonds for $5,520 and credit Interest Revenue for $5,520.
Q2) Unrealized gains on equity securities when the investor has insignificant influence are reported on the:
A)statement of cash flows as investing activities.
B)balance sheet as an element of other comprehensive income.
C)statement of cash flows as financing activities.
D)income statement as Other Income.
Q3) Consolidated financial statements combine the financial statements of the parent company and its subsidiaries.
A)True
B)False
To view all questions and flashcards with answers, click on the resource link above.
Page 15
Chapter 14: Time Value of Money
Available Study Resources on Quizplus for this Chatper
41 Verified Questions
41 Flashcards
Source URL: https://quizplus.com/quiz/74558
Sample Questions
Q1) You have received a settlement offer from an automobile manufacturer due to mechanical problems with your automobile.The manufacturer will pay you $49,000 in one lump sum five years from now.You can earn 6% on your investments.The present value of $1 for 5 periods at 6% is 0.747.The present value of an ordinary annuity of $1 for 5 periods at 6% is 4.212.The present value of the manufacturer's settlement offer is closest to:
A)$36,015.
B)$49,000.
C)$36,603.
D)$206,388.
Q2) You have received a settlement offer from a restaurant for your medical expenses due to food poisoning.The restaurant will pay you $110,000 in one lump sum two years from now.You can earn 10% on your investments.The present value of $1 for 2 periods at 10% is 0.826.The present value of an ordinary annuity of $1 for 2 periods at 10% is 1.736.The present value of the settlement offer is closest to:
A)$220,000.
B)$110,000.
C)$190,960.
D)$90,860.
To view all questions and flashcards with answers, click on the resource link above.
Page 16