Financial Accounting
Test Preparation
Course Introduction
Financial Accounting provides students with a comprehensive introduction to the principles and practices of recording, classifying, and reporting financial information for business entities. The course covers key topics such as the accounting cycle, preparation and analysis of financial statements, measurement and recognition of assets, liabilities, and equity, and the use of generally accepted accounting principles (GAAP). Emphasis is placed on the interpretation and application of accounting data for decision-making by internal and external users, enabling students to understand the foundational role of financial accounting in the business environment.
Recommended Textbook
Introduction to Accounting An Integrated Approach 6th Edition by Penne Ainsworth
Available Study Resources on Quizplus
20 Chapters
1742 Verified Questions
1742 Flashcards
Source URL: https://quizplus.com/study-set/2192
Page 2
Chapter 1: Accounting and Business
Available Study Resources on Quizplus for this Chatper
95 Verified Questions
95 Flashcards
Source URL: https://quizplus.com/quiz/43652
Sample Questions
Q1) Which of the following is not a cause for the number of partnerships to be relatively small?
A)Unlimited liability
B)Mutual agency (each partner can act for other partners)
C)Double taxation
D)Difficulty of formation
Answer: D
Q2) Financial accounting standards that define what constitutes acceptable accounting practice for financial reporting world wide are referred to as:
A)SFAS
B)FASB
C)IFRS
D)GAAP
Answer: C
Q3) Limited liability is an attribute of which type of business entity?
A)partnership
B)sole proprietorship
C)service company
D)corporation
Answer: D
To view all questions and flashcards with answers, click on the resource link above. Page 3
Chapter 2: Business Processes and Accounting Information
Available Study Resources on Quizplus for this Chatper
83 Verified Questions
83 Flashcards
Source URL: https://quizplus.com/quiz/43651
Sample Questions
Q1) Plans showing business activities intended to accomplish objectives during the next year are referred to as:
A)operating plans
B)strategic plans
C)evaluating plans
D)development plans
Answer: A
Q2) A fitness center repays $10,000 it borrowed from the bank to purchase an exercise machine.This is an example of a(n):
A)investing activity
B)financing activity
C)operating activity
D)planning activity
Answer: B
Q3) Which of the following ratios is not part if the Internal Perspective?
A)Accounts Receivable Turnover
B)Inventory Turnover
C)Quick Ratio
D)Accounts Payable Turnover
Answer: C
To view all questions and flashcards with answers, click on the resource link above. Page 4
Chapter 3: Operating Processes: Planning and Control
Available Study Resources on Quizplus for this Chatper
64 Verified Questions
64 Flashcards
Source URL: https://quizplus.com/quiz/43650
Sample Questions
Q1) Which of the follow statements is true about a regression's r<sup>2</sup>?
A)The greater the r<sup>2 </sup>the greater the relationship between the independent and dependant variable.
B)An r<sup>2</sup> that is greater than 1 means that there is more than a 100 percent relationship between the independent and dependant variable.
C)When a r<sup>2</sup> has a negative value the independent variable is inversely related to the dependent variable.
D)When<sup> </sup> a r<sup>2</sup> is less than 1 the greater the inverse relationship between the independent and dependant variables.
Answer: A
Q2) In linear regression analysis,the dependent variable is:
A)Labeled X in the linear equation
B)Referred to as the intercept
C)The cost driver
D)The total cost
Answer: D
To view all questions and flashcards with answers, click on the resource link above. Page 5
Chapter 4: Short-Term Decision Making
Available Study Resources on Quizplus for this Chatper
98 Verified Questions
98 Flashcards
Source URL: https://quizplus.com/quiz/43649
Sample Questions
Q1) Which of the following generates the contribution margin?
A)Variable cost per unit - fixed cost per unit
B)Selling price per unit - fixed cost per unit
C)Selling price per unit - variable cost per unit
D)Fixed cost per unit - Selling price per unit
Q2) The rule for making sound economic decisions is that one should choose the alternative with the
A)highest contribution margin
B)lowest opportunity cost
C)lowest sunk costs
D)highest revenue
Q3) The Foggy Daze Company sells a "one size fits all" rain poncho for $11.50.Variable costs per unit are $3.86,while total fixed costs amount to $572,200.The corporate tax rate is 30% and the company wants to earn an after-tax profit of $209,000.The breakeven point in units is:
A)102,251
B)113,975
C)75,720
D)74,896
Q4) Explain why contribution margin is all profit above the breakeven point.
Page 6
To view all questions and flashcards with answers, click on the resource link above.
Chapter 5: Strategic Planning Regarding Operating Processes
Available Study Resources on Quizplus for this Chatper
48 Verified Questions
48 Flashcards
Source URL: https://quizplus.com/quiz/43648
Sample Questions
Q1) Which of the following describes the practice of setting the price of a product at less than cost to take over a market and then to raise the price?
A)Dumping
B)Price Skimming
C)Penetrating Pricing
D)Predatory Pricing
Q2) Which of the following statements is false?
A)JIT is a pull system.
B)The JIT philosophy is based on continuous improvement.
C)JIT requires a company to have strong relationships with its suppliers.
D)All of the above are true.
Q3) Safety stock is kept in order to:
A)Guard against defective products.
B)Prevent losses created by a stockout
C)Prevent people from being injured by dangerous inventory
D)Help identify the reorder point
Q4) What is the distinction between penetrating and predatory pricing?
Q5) It is said that one of the benefits of the Just-In-Time (JIT)system is that it can't hide defective products.What does this mean?
To view all questions and flashcards with answers, click on the resource link above. Page 7
Chapter 6: Planning, The Balanced Scorecard, and Budgeting
Available Study Resources on Quizplus for this Chatper
67 Verified Questions
67 Flashcards
Source URL: https://quizplus.com/quiz/43647
Sample Questions
Q1) Sales commissions would most likely be shown in the:
A)sales budget
B)direct labor budget
C)manufacturing overhead budget
D)Marketing and distribution budget
Q2) A plan for the future expressed in quantitative terms is called a:
A)cycle
B)budget
C)commentary
D)mathematical model
Q3) A budgeting system that allows individuals who are affected by the budget to have input into the budgeting process is called:
A)mandated budgeting
B)zero-based budgeting
C)incremental budgeting
D)participative budgeting
Q4) Define the term "budgeting." Describe the benefits and costs of implementing a budgeting process.
Q5) Describe how the sales budget is related to the production budget.
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
111 Verified Questions
111 Flashcards
Source URL: https://quizplus.com/quiz/43646
Sample Questions
Q1) All of the following accounts are increased by credits except:
A)liabilities
B)revenues
C)assets
D)contributed capital accounts
Q2) The ______ lists only the permanent accounts of an organization.
A)post-closing trial balance
B)trial balance
C)adjusted trial balance
D)income statement
Q3) All of the following accounts are decreased by debits except:
A)liabilities
B)revenues
C)assets
D)contributed capital accounts
Q4) Which of the following is not a characteristic of an accounting event?
A)Must be the result of a management decision.
B)Must be specific to the entity for which records are being kept.
C)Must be measurable in monetary term.
D)Must impact the entity's assets,liabilities,and/or owners' equity.
Page 9
To view all questions and flashcards with answers, click on the resource link above.
Chapter 8: Purchasinghuman Resourcespayment Process:
Recording and Evaluating Expenditure Process Activities
Available Study Resources on Quizplus for this Chatper
61 Verified Questions
61 Flashcards
Source URL: https://quizplus.com/quiz/43645
Sample Questions
Q1) Payroll deductions are a(n)______ to the employer at the time they are withheld.
A)expense
B)loss
C)liability
D)revenue
Q2) If a company uses the perpetual inventory method and it purchases inventory on account worth $2,000 with terms 2/10 n/30 what will be the cost of the inventory when the inventory is purchased if it is using the net method?
A)$2,000
B)$1,800
C)$1,960
D)$2,200
Q3) Wildcat Supply had a beginning balance of $600 in Utilities Payable account at the start of the year and an ending balance of $1,000.During the year Wildcat paid $4,000 cash to the utilities company.How much utilities expense was incurred during this year?
A)$4,000
B)$4,400
C)$4,600
D)Can't be determined with the information given
Page 10
To view all questions and flashcards with answers, click on the resource link above.
Chapter 9: Recording and Evaluating Conversion Process Activities
Available Study Resources on Quizplus for this Chatper
92 Verified Questions
92 Flashcards
Source URL: https://quizplus.com/quiz/43644
Sample Questions
Q1) The entry to close out a small amount of overapplied manufacturing overhead would:
A)decrease the cost of goods manufactured
B)decrease finished goods inventory
C)increase cost of goods sold
D)increase net income
Q2) The direct materials price variance is calculated as:
A)(Standard Price - Actual Price)x Standard Quantity Allowed
B)(Actual Price - Standard Price)x Actual Quantity Purchased
C)(Standard Quantity Allowed - Actual Quantity Purchased)x Actual Price
D)(Actual Quantity Purchased - Standard Quantity Allowed)x Standard Price
Q3) The direct materials inventory variance is:
A)$4,250F
B)$4,425U
C)$6,800F
D)$7,080U
Q4) The purchasing department is responsible for materials price variances.Do you agree or disagree with this statement? Explain.
To view all questions and flashcards with answers, click on the resource link above. Page 11
Q5) Explain how a favorable direct labor usage variance might indicate with the production process.
Chapter 10: Recording and Evaluating Revenue Process
Activities
Available Study Resources on Quizplus for this Chatper
89 Verified Questions
89 Flashcards
Source URL: https://quizplus.com/quiz/43643
Sample Questions
Q1) A data storage device listing each customer,along with all the credit sales made to,as well as payments received on account from that customer is called a(n):
A)aging schedule
B)marketing survey
C)sales returns and allowances report
D)subsidiary accounts receivable ledger
Q2) Voyager Products,Inc.reported sales revenue of $295,000,beginning and ending accounts receivable of $24,600 and $31,800,respectively,and beginning and ending customer deposits of $18,600 and $14,500,respectively.Cash collections from customers during the year were:
A)$306,300
B)$295,000
C)$283,700
D)$277,700
Q3) One example of a contra-asset is:
A)Sales Discount
B)Sales Returns and Allowances
C)Uncollectible Accounts Expense
D)None of the above are contra assets.
Page 12
To view all questions and flashcards with answers, click on the resource link above.
Chapter 11: Time Value of Money
Available Study Resources on Quizplus for this Chatper
86 Verified Questions
86 Flashcards
Source URL: https://quizplus.com/quiz/43642
Sample Questions
Q1) All of the following are primary risk factors that generate risk premiums except:
A)inflation risk
B)business risk
C)relative risk
D)liquidity risk
Q2) Joe Bittner has just passed his CPA exam and has a great job with a Big 4 CPA firm and has decided to buy a new BMW.If the price of the car is $36,000 how much will his monthly payments be if he make payments over the next 4 years if he can get a 6% interest rate?
Q3) The present value of $13,000 received seven years from today,assuming an interest rate of 5% compounded annually is:
A)$ 9,269.00
B)$18,292.30
C)$17,550.00
D)$ 9,238.85
Q4) Explain the relationship between an expected rate of return on an investment and the actual return that will actually occur.Explain the role expected return plays in investment decisions.
To view all questions and flashcards with answers, click on the resource link above.
Page 13
Chapter 12: Planning Investments: Capital Budgeting
Available Study Resources on Quizplus for this Chatper
77 Verified Questions
77 Flashcards
Source URL: https://quizplus.com/quiz/43641
Sample Questions
Q1) Kaw Inc.had sales of $500,000 and cash operating expenses of $320,000 and depreciation expense of $50,000 for the year just ended.If Kaw's income tax rate is 40%,its net after-tax cash flows amounted to:
A)$108,000
B)$160,000
C)$130,000
D)$128,000
Q2) If the net-present-value of an investment is negative,the:
A)Proposed investment should be rejected
B)Firm's cost of capital is greater than the discount rate
C)Investment's return is greater than the firm's cost of capital
D)Cost of the asset is less than the present value of the future cash flows
Q3) Which of the following must be estimated in order to compute the net present value of an investment?
A)Cost of capital,future cash flows,and initial cost
B)Cost of capital,future cash flows,or initial cost
C)Initial cost,future cash flows,and residual value
D)Initial cost,future income tax rates,and residual value
Q4) Why should qualitative factors be considered in the capital budgeting process?
To view all questions and flashcards with answers, click on the resource link above. Page 14
Chapter 13: Planning Equity Financing
Available Study Resources on Quizplus for this Chatper
94 Verified Questions
94 Flashcards
Source URL: https://quizplus.com/quiz/43640
Sample Questions
Q1) In which of the following scenarios would financial leverage be maximized?
A)High times interest earned ratio and low debt to equity ratio
B)Low times interest earned ratio and low debt to equity ratio
C)Low times interest earned ratio and high debt to equity ratio
D)High times interest earned ratio and a high debt to equity ratio
Q2) Explain why the combination of mutual agency and unlimited liability create a great deal of risk for partnerships.
Q3) If a firm has only one class of stock,the stock is called:
A)callable stock
B)common stock
C)preferred stock
D)convertible stock
Q4) Treasury stock:
A)is an asset
B)is a liability
C)reduces stockholders' equity
D)none of the above
Q5) What is a DRIP? How can it be advantageous to both a corporation and its stockholders?
Q6) Explain the relationship between a stock's par value and its market value.
Page 15
To view all questions and flashcards with answers, click on the resource link above.
Chapter 14: Planning Debt Financing
Available Study Resources on Quizplus for this Chatper
72 Verified Questions
72 Flashcards
Source URL: https://quizplus.com/quiz/43639
Sample Questions
Q1) Sprint is planning to issue debentures with a face value of $10,000,000 on September 1,2010.The debentures mature in 10 years and have a face interest rate of 8 percent that is paid semiannually on March 1 and September 1 of each year.Sprint thinks the market interest rate will be 6%.Assume that Sprint has a fiscal year end on Aug 31.
Required:
(A.)Calculate the proceeds of the bond and set up an amortization schedule for the first year of the bond's life.
(B.)Where will the proceeds of the bond be reported on the budgeted financial statements.
(C.)What is the amount of interest expense Sprint will incur in the first year of the bond's life and where will the interest be reported on the budgeted financial statements for August 31,2011.
(D.)How will the bond be reported on the budgeted balance sheet on August 31,2011.
Q2) Once the capital budgeting decision has identified the asset the firm wants to acquire and the decision is made to use debt financing,how does the firm decided between a non-interest bearing note,an installment note,or an interest bearing note?
To view all questions and flashcards with answers, click on the resource link above.
Page 16
Chapter 15: Recording and Evaluating Capital Resource
Process Activities: Financing
Available Study Resources on Quizplus for this Chatper
118 Verified Questions
118 Flashcards
Source URL: https://quizplus.com/quiz/43638
Sample Questions
Q1) Retained earnings represent
A)total cash accumulated by a firm over its existence
B)earnings not available for payment of dividends
C)earnings to date less dividends paid to date
D)cash restricted for payment of dividends
Q2) The journal entry to record a payment on an installment note would include all of the following except:
A)credit to Cash
B)debit to Interest Expense
C)debit to Notes Payable
D)credit to Discount on Notes Payable
Q3) The issuance of common stock for cash would appear on the A)income statement and statement of cash flows
B)statement of cash flows and statement of stockholders' equity
C)income statement,balance sheet and statement of stockholders' equity
D)income statement,statement of cash flows and statement of stockholders' equity
Q4) If a firm buys its own stock,how would the stock be reported on the balance sheet? Why is it reported that way?
Page 17
Q5) Compare stock splits and stock dividends in terms of effect on stockholders' equity and market price.
To view all questions and flashcards with answers, click on the resource link above.
Chapter 16: Recording and Evaluating Capital Resource
Process Activities: Investing
Available Study Resources on Quizplus for this Chatper
85 Verified Questions
85 Flashcards
Source URL: https://quizplus.com/quiz/43637
Sample Questions
Q1) Which of the following would be classified as a plant asset?
A)land held for future use
B)machinery
C)trademark
D)inventory
Q2) Jackson Corporation has a forklift that it paid $40,000 for and that has a book value today of $14,000.Jackson is going to trade this forklift for a newer forklift with a market value of $55,000.Jackson Corporation is going to give its forklift and $25,000 cash to acquire the newer forklift.Make the entry to record the acquisition of the new forklift.
Q3) Revenue expenditures:
A)include expenditures for betterments
B)include expenditures for extraordinary repairs
C)are expenditures that provide benefits only during the current accounting period
D)are expenditures that extend the remaining useful life of an operational investment
Q4) Comment on this statement: "Salvage value is ignored when the declining balance depreciation method is used."
To view all questions and flashcards with answers, click on the resource link above.
Page 18
Chapter 17: Company Performance: Profitability
Available Study Resources on Quizplus for this Chatper
61 Verified Questions
61 Flashcards
Source URL: https://quizplus.com/quiz/43636
Sample Questions
Q1) A manufacturing company using full-absorption costing can increase net income by which of the following.
A)Increasing production and increasing ending inventory at the end of the year.
B)Decreasing the inventory
C)Writing ending inventory down to its fair value.
D)All of the above.
Q2) The income from operations of a discontinued division would be included in which section of the income statement:
A)Income from operations
B)prior period adjustments
C)Net of tax item
D)Nonoperating section of income statement
Q3) The amount of gain(loss)from disposal of the Specialties Division that would appear on the 2010 income statement of Spectrum Corporation is:
A)$331,700 loss
B)$ 89,300 gain
C)$145,700 gain
D)$235,000 gain
Q4) What is comprehensive income and how does it differ from net income?
To view all questions and flashcards with answers, click on the resource link above. Page 19
Chapter 18: Company Performance: Owners Equity and Financial Position
Available Study Resources on Quizplus for this Chatper
80 Verified Questions
80 Flashcards
Source URL: https://quizplus.com/quiz/43635
Sample Questions
Q1) Create the stockholders' equity section of the balance sheet.Must include the appropriate heading,2 types of stock with at least one with a par value and treasury stock.
Q2) The assets on the balance sheet are listed:
A)in alphabetical order
B)in order of significance
C)by dollar value
D)in order of liquidity
Q3) Which of the following would not be reported as part of stockholders' equity on the balance sheet?
A)Treasury Stock
B)Premium on Bonds
C)Retained Earnings
D)Paid-in-capital from common stock
Q4) The more formal name for a balance sheet is:
A)statement of net worth
B)statement of financial position
C)statement of stockholders' equity
D)statement of financial operations
20
Q5) How can a balance sheet predict a company's future net
To view all questions and flashcards with answers, click on the resource link above.
Chapter 19: Company Performance: Cash Flows
Available Study Resources on Quizplus for this Chatper
95 Verified Questions
95 Flashcards
Source URL: https://quizplus.com/quiz/43634
Sample Questions
Q1) Using the indirect method (statement of cash flows),a gain from the sale of equipment would:
A)be subtracted from net income
B)be added to net income
C)have no adjustment made to net income
D)be added to the investing section of the statement of cash flows
Q2) Which of the following activities is correctly associated with its cash flow classification?
A)Operating - Sale of company's own common stock
B)Financing - Purchase of Treasury Stock
C)Investing - Payment of rent for next two months
D)Financing - Payment of interest on bonds payable
Q3) Using the indirect method (statement of cash flows),an increase in current assets would:
A)be subtracted from net income
B)be added to net income
C)have no adjustment made to net income
D)be added to the investing section of the statement of cash flows
Q4) Since firms must publish an income statement,why is a statement of cash flows also necessary?
To view all questions and flashcards with answers, click on the resource link above. Page 21
Chapter 20: Company Performance: Comprehensive Evaluation
Available Study Resources on Quizplus for this Chatper
91 Verified Questions
91 Flashcards
Source URL: https://quizplus.com/quiz/43633
Sample Questions
Q1) The gross margin percentage for 2010 was:
A)32.0%
B)45.1%
C)45.2%
D)84.3%
Q2) The times interest earned ratio is generally used to assess a firm's:
A)liquidity
B)efficiency
C)profitability
D)creditworthiness
Q3) The total asset turnover ratio measures
A)how well a firm uses its assets to produce sales
B)the rate of return on a firm's investment in assets
C)the portion of assets that has been financed by investors
D)the portion of assets that has been financed by creditors
Q4) The asset turnover ratio for 2010 was:
A)45.8
B)57.1
C)63.3
D)75.6
To view all questions and flashcards with answers, click on the resource link above. Page 22