Financial Accounting
Question Bank
Course Introduction
Financial Accounting provides a comprehensive introduction to the principles and practices of accounting as they apply to the preparation and interpretation of financial statements. The course covers key concepts such as the accounting cycle, double-entry bookkeeping, and the recognition, measurement, and reporting of assets, liabilities, equity, revenues, and expenses. Students will learn how to analyze financial statements to assess an organizations financial health and make informed business decisions. Emphasis is placed on the importance of ethics and regulatory standards in financial reporting, as well as the impact of financial accounting on stakeholders including investors, creditors, and management.
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) The basic difference between manufacturing and merchandising companies is the completion level of the products they purchase for resale to customers.
A)True
B)False
Answer: True
Q2) Explain the meaning of:
(a) the objectivity concept and (b) the unit of measure concept
Answer: (a) The objectivity concept requires that the amounts recorded in the accounting records be based on objective evidence. In exchanges between a buyer and a seller, both try to get the best price. Only the final agreed-upon amount is objective enough to be recorded in the accounting records.
. (b) The unit of measure concept requires that economic data be recorded in dollars. Money is a common unit of measurement for reporting financial data and reports.
Q3) What are the three sections of the Statement of Cash Flows?
Answer: Operating Activities, Investing Activities, and the Financing Activities
To view all questions and flashcards with answers, click on the resource link above.
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) \[\begin{array} { | l | l | c | l | l | l | }
\hline \text { May } & 24 & \text { Land } & & 105,000 & \\
\hline & & \text { Cus } & & & 105,000 \\
\hline & & \text { Purchased land for business } & & & \\
\hline & & & & & \\
\end{array}\] What effects does this journal entry have on the accounts?
A) Increase Cash and increase Land
B) Increase Land and decrease Cash
C) Decrease Cash and decrease Land
D) Increase Cash and decrease Land
Answer: B
Q2) In which of the following types of accounts are increases recorded by credits?
A) revenues and liabilities
B) drawing and assets
C) liabilities and drawing
D) expenses and liabilities
Answer: A
Q3) Damien Lawson invests $45,000 to initiate the operation of his business, JumpStart, on January 7th. Journalize this transaction.
Answer: 11ea8f91_7c82_8603_b161_59a82dccacc9_TB2085_00_TB2085_00_TB2085_00
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) At the end of the fiscal year, the usual adjusting entry for accrued salaries owed to employees was omitted. Which of the following statements is true?
A) Salary Expense for the year was understated.
B) The total of the liabilities at the end of the year was overstated.
C) Net income for the year was understated.
D) Owner's equity at the end of the year was understated.
Answer: A
Q2) On January 1, DogMart Company purchased a two-year liability insurance policy for $22,800 cash. The purchase was recorded to Prepaid Insurance. Prepare the January 31 adjusting entry.
Answer: $22,800/24 = $950
11ea8f91_7c8d_f817_b161_35f7946e9dee_TB2085_00_TB2085_00_TB2085_00
Q3) The matching concept supports matching expenses with the related revenues.
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
190 Verified Questions
190 Flashcards
Source URL: https://quizplus.com/quiz/77540
Sample Questions
Q1) If working papers are not considered part of the formal accounting records, then why are they used?
Q2) All companies must use a calendar year as their fiscal year.
A)True
B)False
Q3) Deferred expenses that benefit a relatively short period of time are listed on the balance sheet as current assets.
A)True
B)False
Q4) The difference between the totals of the debit and credit columns of the Adjusted Trial Balance columns on a work sheet
A) is the amount of net income or loss
B) indicates there is an error on the work sheet
C) is the amount of retained earnings
D) is the difference between revenue and expenses
Q5) The unadjusted, adjusted, and final trial balances are prepared during the accounting cycle of a period.
A)True
B)False
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) The format and number of specialized journals that a business uses depends upon the legal organization of the business.
A)True
B)False
Q2) The presence of a subsidiary ledger requires the presence of a summarizing controlling account.
A)True
B)False
Q3) Describe and discuss e-commerce.
Q4) When posting the column totals of a cash payments journal, a debit should be posted to
A) Cash
B) Accounts Payable
C) Sales Discounts
D) Unearned Revenue
Q5) Which of the following could not be considered a business segment?
A) Region
B) Product
C) Customer Type
D) All of these could be considered business segments.
Page 7
To view all questions and flashcards with answers, click on the resource link above.
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) Office salaries, depreciation of office equipment, and office supplies are examples of what type of expense?
A) selling expense
B) miscellaneous expense
C) administrative expense
D) other expense
Q2) Discounts taken by the buyer for early payment of an invoice are credited to Sales Discounts by the buyer.
A)True
B)False
Q3) Purchased goods in transit should be included in the ending inventory of the buyer if the goods were shipped FOB shipping point.
A)True
B)False
Q4) Freight-in is considered a cost of purchasing inventory.
A)True
B)False
To view all questions and flashcards with answers, click on the resource link above. Page 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) During periods of increasing costs, the use of the FIFO method of costing inventory will result in a greater amount of net income than would result from the use of the LIFO cost method.
A)True
B)False
Q2) If a company mistakenly counts more items during a physical inventory than actually exist, how will the error affect their bottom line?
A) No change to net income.
B) Net income will be overstated
C) Net income will be understated.
D) Only gross profit will be affected.
Q3) Stevens Company started the year with an inventory cost of $145,000. During the month of January they purchased inventory that cost of $53,000. January sales totaled $140,000. Estimated gross profit is 35%. The estimated ending inventory as of January 31 is
A) $58,000
B) $91,000
C) $107,000
D) $69,300
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) Depositing all cash, checks, etc. in a bank and paying with checks is an internal control procedure over cash.
A)True
B)False
Q2) The cash account in the company's ledger is a(n)
A) asset with a debit balance
B) asset with a credit balance
C) liability with a debit balance
D) liability with a credit balance
Q3) Which one of the following below is not a factor that influences a business's control environment?
A) management's philosophy and operating style
B) organizational structure
C) proofs and security measurers
D) personnel policies
Q4) A check for $342 was erroneously charged by the bank as $432. In order for the bank reconciliation to balance, you must add $90 to the bank statement balance.
A)True
B)False
To view all questions and flashcards with answers, click on the resource link above. Page 10
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) Journalize the following transactions using the allowance method of accounting for uncollectible receivables.
April 1 Sold merchandise on account to Jim Dobbs, $7,200. The cost of the merchandise is $5,400.
June 10 Received payment for one-third of the receivable from Jim Dobbs and wrote off the remainder.
Oct. 11 Reinstated the account of Jim Dobbs and received cash in full payment.
Q2) Fellows Corporation has determined that the $2,700 accounts receivable due from Andrew Stevens is uncollectible. Compare the journal entry that is required under the direct write-off method to the journal entry that is required using the allowance method.
Q3) If the direct write-off method of accounting for uncollectible receivables is used, what general ledger account is debited to write off a customer's account as uncollectible?
A) Uncollectible Accounts Receivable
B) Accounts Receivable
C) Allowance for Doubtful Accounts
D) Bad Debts Expense
Q4) 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) When a property, plant, and equipment asset is sold for cash, any gain or loss on the asset sold should be recorded.
A)True
B)False
Q2) Though a piece of equipment is still being used, the equipment should be removed from the accounts if it has been fully depreciated.
A)True B)False
Q3) Falcon Company acquired an adjacent lot to construct a new warehouse, paying $40,000 and giving a short-term note for $410,000. Legal fees paid were $13,275, delinquent taxes assessed were $14,500, and fees paid to remove an old building from the land were $15,800. Materials salvaged from the demolition of the building were sold for $6,800. A contractor was paid $890,000 to construct a new warehouse. Determine the cost of the land to be reported on the balance sheet and show your work.
Q4) The difference between the balance in a fixed asset account and its related accumulated depreciation account is the asset's book value.
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) The journal entry a company uses to record pension rights that have not been funded for its salaried employees, at the end of the year is
A) debit Salary Expense; credit Cash
B) debit Pension Expense; credit Unfunded Pension Liability
C) debit Pension Expense; credit Unfunded Pension Liability and Cash
D) debit Pension Expense; credit Cash
Q2) The journal entry a company uses to record the estimated accrued product warranty liability is
A) debit Product Warranty Expense; credit Product Warranty Payable
B) debit Product Warranty Payable; credit Cash
C) debit Product Warranty Expense; credit Cash
D) debit Product Warranty Payable; credit Product Warranty Expense
Q3) The amount of money a borrower receives from the lender is called discount rate. A)True
B)False
Q4) Form W-4 is a form authorizing employers to withhold a portion of employee earnings for payment of an employee's federal income taxes.
A)True
B)False
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) The Craig-Doran Partnership owns inventory that was purchased for $85,000, has a current replacement cost of $54,500, and is priced to sell for $98,000. At what amount should the inventory be recorded in the accounts of the new partnership if Alexis is to be admitted?
A) $98,000
B) $54,500
C) $85,000
D) $79,167
Q2) In the liquidating process, any uncollected cash becomes a loss to the partnership and is divided among the remaining partners' capital balances based on their income-sharing ratio.
A)True
B)False
Q3) Which of the following is a disadvantage of a partnership when compared to a corporation?
A) The partnership is more likely to have a net loss.
B) The partnership is easier to organize.
C) The partnership is less expensive to organize.
D) The partnership has limited life.
Q4) Describe the items which should be covered in a partnership agreement.
To view all questions and flashcards with answers, click on the resource link above. Page 14
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) Treasury stock that had been purchased for $5,600 last month was reissued this month for $8,500. The journal entry to record the reissuance would include a credit to
A) Treasury Stock for $8,500
B) Paid-In Capital from Treasury Stock for $8,500
C) Paid-In Capital in Excess of Par/Common for $2,900
D) Paid-In Capital from Treasury Stock for $2,900
Q2) While some businesses have been granted charters under state laws, most businesses receive their charters under federal laws.
A)True
B)False
Q3) If the dividend amount of preferred stock, $50 par value, is quoted as 8%, then the dividends per share would be $4.
A)True
B)False
Q4) The par value of common stock must always be equal to its market value on the date the stock is issued.
A)True
B)False
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) Sinking Fund Income is reported in the income statement as A) income from operations
B) extraordinary
C) gain on sinking fund transactions
D) other income
Q2) On January 1, 2014, Gemstone Company obtained a $165,000, 10-year, 7% installment note from Guarantee Bank. The note requires annual payments of $23,492, with the first payment occurring on the last day of the fiscal year. The first payment consists of interest of $11,550 and principal repayment of $11,942. The journal entry to record the payment of the first annual amount due on the note would include:
A) a debit to cash of $11,942
B) a credit to Interest Payable of $11,550
C) a debit to Notes Payable of $11,942
D) a debit to Interest Expense of $23,492
Q3) The amortization of a premium on bonds payable decreases bond interest expense.
A)True
B)False
Q4) A $500,000 bond issue on which there is an unamortized discount of $35,000 is redeemed for $475,000. Journalize the redemption of the bonds.
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 company whose more than 50% stock is owned by the another company is called the
A) controlling company.
B) investee company.
C) subsidiary company.
D) sibling company.
Q2) All of the following are factors contributing to the trend for regulators to adopt accounting principles using fair value concepts except:
A) a greater percentage of total assets existing as receivables and securities.
B) pressure on regulators to adopt an international set of accounting principles and standards.
C) hybrid measurement methods within GAAP that conflict with each other.
D) the ease of applying market values to assets and liabilities.
Q3) If the proceeds from the sale of bond investments exceeds the carrying amount of the bonds, a gain is realized.
A)True
B)False
Q4) Define (1) debt securities and (2) equity securities. Include their similarities and differences in your discussion.
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) The manner of reporting cash flows from investing and financing activities will be different under the direct method as compared to the indirect method.
A)True
B)False
Q2) If accounts payable have increased during a period
A) revenues on an accrual basis are less than revenues on a cash basis.
B) expenses on an accrual basis are less than expenses on a cash basis.
C) expenses on an accrual basis are the same as expenses on a cash basis.
D) expenses on an accrual basis are greater than expenses on a cash basis.
Q3) If a business issued bonds payable in exchange for land, the transaction would be reported in a separate schedule on the statement of cash flows.
A)True
B)False
Q4) In preparing the cash flows from operating activities section of the statement of cash flows by the indirect method, the amortization of bond discount for the period is deducted from the net income for the period.
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) A firm selling food should have higher inventory turnover rate than a firm selling office furniture.
A)True
B)False
Q2) Solvency analysis focuses on the ability of a business to pay its current and noncurrent liabilities.
A)True
B)False
Q3) Percentage analyses, ratios, turnovers, and other measures of financial position and operating results are
A) a substitute for sound judgment.
B) useful analytical measures.
C) enough information for analysis, industry information is not needed.
D) unnecessary for analysis, but reaction is better.
Q4) If two companies have the same current ratio, their ability to pay short-term debt is the same.
A)True
B)False
Q5) Define solvency and profitability. How are they alike?
To view all questions and flashcards with answers, click on the resource link above. Page 19