Fundamentals of Accounting Exam Review
Course Introduction
Fundamentals of Accounting introduces students to the essential concepts and principles underlying the accounting profession. The course covers the accounting cycle, including the recording, classification, and summarization of business transactions, as well as the preparation and interpretation of basic financial statements such as the balance sheet, income statement, and cash flow statement. Topics include double-entry bookkeeping, accrual versus cash accounting, and the ethical standards and regulatory environment governing accounting practices. Through practical exercises and case studies, students gain a foundational understanding of how accounting information supports decision-making in businesses and organizations.
Recommended Textbook Principles of Accounting 12th Edition by Belverd E. Needles
Available Study Resources on Quizplus
25 Chapters
3966 Verified Questions
3966 Flashcards
Source URL: https://quizplus.com/study-set/3785 Page 2
Chapter 1: Accounting Principles and the Financial Statements
Available Study Resources on Quizplus for this Chatper
170 Verified Questions
170 Flashcards
Source URL: https://quizplus.com/quiz/75589
Sample Questions
Q1) At the beginning of the year,Pullman Company's assets were $270,000 and its owner's equity was $201,000.During the year,assets decreased by $35,000 and liabilities increased by $10,000.What was owner's equity at the end of the year?
Answer: [($270,000 - $35,000)- ($69,000 + $10,000)] = $156,000
Q2) The purpose of an audit is to
A)determine whether or not a company is a good investment.
B)comply with income tax regulations.
C)determine whether or not a company is a good credit risk.
D)ascertain that the financial statements follow GAAP.
Answer: D
Q3) A liability would not include an obligation to A)transfer assets.
B)hire an employee.
C)pay cash.
D)provide services.
Answer: B
Q4) Accounting ratios are useful as management performance measures.
A)True
B)False
Answer: True
To view all questions and flashcards with answers, click on the resource link above. Page 3
Chapter 2: Analyzing and Recording Business Transactions
Available Study Resources on Quizplus for this Chatper
137 Verified Questions
137 Flashcards
Source URL: https://quizplus.com/quiz/75578
Sample Questions
Q1) What is the balance in cash after these transactions?
A)$940
B)$1,140
C)$740
D)$2,440
Answer: B
Q2) What is the amount of cash still to be collected?
A)$126,000
B)$341,000
C)$144,000
D)$18,000
Answer: A
Q3) In order to manage a company's liquidity,managers and other users of financial information must understand the difference between transactions that generate immediate cash and those that do not.
A)True
B)False
Answer: True
To view all questions and flashcards with answers, click on the resource link above.
4
Chapter 3: Adjusting the Accounts
Available Study Resources on Quizplus for this Chatper
165 Verified Questions
165 Flashcards
Source URL: https://quizplus.com/quiz/75571
Sample Questions
Q1) A net loss results in a decrease in
A)revenues.
B)expenses.
C)owner's equity.
D)liabilities.
Answer: C
Q2) When a net loss occurs,the Owner's Capital account will contain a negative balance.
A)True
B)False
Answer: False
Q3) Which of the following accounts would appear on an adjusted trial balance but probably would not appear on a trial balance?
A)Supplies Expense
B)Accounts Payable
C)Service Revenue
D)Cash 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
179 Verified Questions
179 Flashcards
Source URL: https://quizplus.com/quiz/75570
Sample Questions
Q1) An adjusting entry was made on the last day of the previous fiscal year debiting Wages Expense and crediting Wages Payable.If a reversing entry has been made,then at the time of payment
A)the accountant needs to find out how much of the payment applies to the current period and how much applies to the previous period.
B)the accountant will debit Wages Payable and Wages Expense,and credit Cash.
C)the accountant will debit Wages Expense and credit Cash.
D)the accountant will debit Cash and credit Wages Expense.
Q2) The Income Statement columns of the work sheet show all the accounts that need to be closed.
A)True
B)False
Q3) The amount of net income (or net loss)for the period is
A)$300 net income.
B)$900 net income.
C)$600 net income.
D)$300 net loss.
Q4) What does the preparation of reversing entries accomplish?
Q5) Why will the Income Summary account never appear on any financial statement?
To view all questions and flashcards with answers, click on the resource link above. Page 6
Chapter 5: Foundations of Financial Reporting and the
Classified Balance Sheet
Available Study Resources on Quizplus for this Chatper
130 Verified Questions
130 Flashcards
Source URL: https://quizplus.com/quiz/75569
Sample Questions
Q1) The total dollar amount of assets to be classified as investments is
A)$168,000.
B)$0.
C)$112,000.
D)$56,000.
Q2) Which of the following is not an enhancing qualitative characteristic?
A)Verifiability
B)Timeliness
C)Understandability
D)Neutrality
Q3) A debt to equity ratio of 0.5 means that one-third of a company's total assets are financed by creditors.
A)True
B)False
Q4) Faithful representation is comprised of all of the following except A)Verifiability
B)Completeness
C)Neutrality
D)Free from error
Q5) State the definition of a current asset.
To view all questions and flashcards with answers, click on the resource link above. Page 7
Chapter 6: Accounting for Merchandising Operations
Available Study Resources on Quizplus for this Chatper
175 Verified Questions
175 Flashcards
Source URL: https://quizplus.com/quiz/75568
Sample Questions
Q1) Assume a company uses the periodic inventory system and has a beginning merchandise inventory balance of $10,000,purchases of $150,000,and sales of $250,000.The company closes its records once a year on December 31.In the accounting records,the merchandise inventory account would be expected to have a balance on December 31 prior to adjusting and closing entries that was A)indeterminate.
B)less than $5,000.
C)more than $5,000.
D)equal to $5,000.
Q2) A merchandiser's operating cycle concludes with the sale of goods.
A)True
B)False
Q3) Wolf Equipment uses a perpetual inventory method.Discuss how Wolf Equipment accounts for purchase returns and allowances.
Q4) The financing period is also referred to as the cash gap.
A)True
B)False
Q5) Distinguish between the cost of goods available for sale and the cost of goods sold.
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
162 Verified Questions
162 Flashcards
Source URL: https://quizplus.com/quiz/75567
Sample Questions
Q1) The specific identification method is well suited for a discount department store.
A)True
B)False
Q2) A retail store has beginning inventory of $30,000,purchases of $220,000,sales of $200,000,and a normal gross margin of 25 percent.What is estimated inventory based on these facts and the gross profit method?
A)$50,000
B)$150,000
C)$100,000
D)$200,000
Q3) Inventory turnover is expressed in terms of A)days.
B)a percentage.
C)dollars.
D)times.
Q4) Under a periodic inventory system,cost of goods sold is not recorded until the end of the accounting period.
A)True B)False
To view all questions and flashcards with answers, click on the resource link above. Page 9
Chapter 8: Cash and Internal Control
Available Study Resources on Quizplus for this Chatper
142 Verified Questions
142 Flashcards
Source URL: https://quizplus.com/quiz/75566
Sample Questions
Q1) A company's merchandise inventory includes all of the following,except
A)goods in possession,but which cannot be sold.
B)goods on shelves.
C)damaged goods that can be sold at a reduced price.
D)goods in storerooms.
Q2) Management's regular assessment of its internal controls is part of monitoring.
A)True
B)False
Q3) Which of the following would be added to the balance per bank?
A)Outstanding checks
B)Bank service charges
C)Collection of a note receivable by the bank
D)Deposits in transit
Q4) Each of the following is a feature of internal control except
A)management planning.
B)periodic independent verification.
C)limited access to assets.
D)authorization of transactions.
Q5) Explain management's responsibility as it pertains to internal control of a company.
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
112 Verified Questions
112 Flashcards
Source URL: https://quizplus.com/quiz/75565
Sample Questions
Q1) On December 31,Ferndale Enterprises has an $800 debit balance in Allowance for Uncollectible Accounts.If an accounts receivable aging method analysis indicated that an estimated $6,400 of December 31 receivables are uncollectible,for what amount would the adjusting entry for uncollectible accounts be recorded? (Show your work. )
Q2) Purchasing receivables with recourse is riskier than purchasing them without recourse.
A)True
B)False
Q3) Assume that on November 1,a note which has a face value of $9,000,bears interest at 9 percent for 120 days,received from a customer as an extension of her past-due account is dishonored.The entry that would be made to record the dishonor include all except
A)a debit to Accounts Receivable for $9,000
B)a credit to Interest Income for $266
C)a credit to Notes Receivable for $9,000
D)a debit to Accounts Receivable for $9,266
Q4) What is a contingent liability,and how does it relate to the discounting of a note receivable at the bank?
Q5) Explain the two methods used to estimate uncollectible accounts.
To view all questions and flashcards with answers, click on the resource link above. Page 11
Chapter 10: Long -Term Assets
Available Study Resources on Quizplus for this Chatper
227 Verified Questions
227 Flashcards
Source URL: https://quizplus.com/quiz/75588
Sample Questions
Q1) Whether exchanging similar or dissimilar assets,accounting for the transaction is the same.
A)True
B)False
Q2) Additions and betterments are examples of capital expenditures.
A)True
B)False
Q3) Leasehold improvements become the property of the lessor at the end of the lease.
A)True
B)False
Q4) Gomez Company purchases a piece of equipment on Jan.2,2014,for $30,000.The equipment has an estimated life of eight years or 50,000 units of production and an estimated residual value of $3,000.Lester uses a calendar fiscal year.The entry to record the amount of depreciation for 2014,using the production method and assuming 8,000 units are produced,is
A)debit to Depreciation Expense,4,000;credit to Cash,4,000
B)debit to Cash,4,160;credit to Accumulated Depreciation,4,160
C)debit to Depreciation Expense,4,320;credit to Accumulated Depreciation,4,320
D)debit to Depreciation Expense,4,800;credit to Accumulated Depreciation,4,800
To view all questions and flashcards with answers, click on the resource link above. Page 12
Chapter 11: Current Liabilities and Fair Value Accounting
Available Study Resources on Quizplus for this Chatper
180 Verified Questions
180 Flashcards
Source URL: https://quizplus.com/quiz/75587
Sample Questions
Q1) Gross earnings minus deductions equal take-home pay.
A)True
B)False
Q2) A company enters into a contract to purchase a certain quantity of goods from another company during the following month.At this point,would a liability exist? Explain why or why not.
Q3) Current liabilities are classified as either definitely determinable liabilities or contingent liabilities.
A)True
B)False
Q4) Common examples of commitments are leases and purchase agreements.
A)True
B)False
Q5) Contrast the accounting problems presented by definitely determinable liabilities and those associated with estimated liabilities.
Q6) Explain why the cost of employing someone is more than just the wage or salary paid to the employee.
Q7) Identify and briefly discuss the three approaches for determining fair value identified by the FASB.
Page 13
To view all questions and flashcards with answers, click on the resource link above.
Chapter 12: Accounting for Partnerships
Available Study Resources on Quizplus for this Chatper
153 Verified Questions
153 Flashcards
Source URL: https://quizplus.com/quiz/75586
Sample Questions
Q1) Liabilities related to assets invested in a partnership by a new partner can be transferred to the partnership.
A)True
B)False
Q2) Which of the following statements is correct regarding partnerships?
A)Accounting for a partnership is similar to accounting for a corporation.
B)If the partnership assumes a liability related to an asset invested in the partnership,the partner's capital account is credited and a liability account is debited.
C)It is necessary to maintain separate Capital and Withdrawals accounts for each partner.
D)All of these choices.
Q3) The salary allocation to partners also appears as Salaries Expense on the partnership income statement.
A)True
B)False
Q4) When a new partner is admitted,the old partnership agreement is still in effect.
A)True
B)False
Q5) List four advantages and four disadvantages of the partnership form of business.
To view all questions and flashcards with answers, click on the resource link above. Page 14
Chapter 13: Accounting for Corporations
Available Study Resources on Quizplus for this Chatper
196 Verified Questions
196 Flashcards
Source URL: https://quizplus.com/quiz/75585
Sample Questions
Q1) If only common stock is outstanding,total stockholders' equity divided by the number of shares of common stock outstanding is called the
A)par or stated value per share.
B)call value per share.
C)book value per share.
D)market value per share.
Q2) Underwriters typically charge 1 percent of the selling price to guarantee the sale of initial public offerings of stock.
A)True
B)False
Q3) In the rare instance when a par value stock is issued at a cash price below par,the excess of the par value over the amount of cash received should be
A)credited to a liability account.
B)debited to the Retained Earnings account.
C)debited to an account titled Discount on Capital Stock.
D)credited to the Retained Earnings account.
Q4) When stock is issued for noncash assets or services,how does one place a valuation (dollar amount)on the transaction?
To view all questions and flashcards with answers, click on the resource link above. Page 15
Chapter 14: Long Term Liabilities
Available Study Resources on Quizplus for this Chatper
206 Verified Questions
206 Flashcards
Source URL: https://quizplus.com/quiz/75584
Sample Questions
Q1) Unamortized Bond Premium is subtracted from Bonds Payable on the balance sheet.
A)True
B)False
Q2) Knollwood Corporation issued $278,000 of 30-year,8 percent bonds at 106 on one of its semiannual interest dates.The straight-line method of amortization is to be used.After 11 years,what is the carrying value of the bonds?
A)$286,340
B)$286,896
C)$284,950
D)$288,564
Q3) The entry to record the issuance of bonds at a discount includes a credit to the Unamortized Bond Discount account.
A)True B)False
Q4) A capital lease represents both an asset and a liability. A)True B)False
Q5) Technically,what is meant by the amortization of a bond discount,and why is it necessary?
To view all questions and flashcards with answers, click on the resource link above. Page 16
Chapter 15: The Statement of Cash Flows
Available Study Resources on Quizplus for this Chatper
145 Verified Questions
145 Flashcards
Source URL: https://quizplus.com/quiz/75583
Sample Questions
Q1) Cash flows to assets is computed as
A)Net cash flows from operating activities/Average total assets
B)Average total assets/Net cash flows from operating activities
C)Net cash flows from operating activities/Sales
D)Net income/Net cash flows from operating activities
Q2) For 20x5,Devers Enterprises had average total assets of $1,040,000,sales of $900,000,net income of $100,000,net cash flows from operating activities of $150,000,dividend payments of $50,000,purchases of plant assets of $120,000,and sales of plant assets of $110,000.Using this information,compute (a)cash flow yield, (b)cash flows to sales, (c)cash flows to assets,and (d)free cash flow.Round amounts to one decimal place.
Q3) Lincoln Company engaged in this transaction: Sold land it was holding for speculation.
Indicate which section,if any,the above transaction would appear in,or relate to,on a statement of cash flows.
A)Financing activities section.
B)Schedule of noncash investing and financing transactions.
C)Operating activities section.
D)Investing activities section.
Q4) Which accounts are analyzed to determine cash flows from financing activities?
Page 17
To view all questions and flashcards with answers, click on the resource link above.
Chapter 16: Financial Statement Analysis
Available Study Resources on Quizplus for this Chatper
169 Verified Questions
169 Flashcards
Source URL: https://quizplus.com/quiz/75582
Sample Questions
Q1) In a common-size income statement,each item is expressed as a percentage of net income.
A)True B)False
Q2) A general rule in choosing among alternative investments is the greater the risk taken,the
A)greater the return required.
B)lower the potential expected.
C)greater the price of the investment.
D)lower the profits expected.
Q3) If sales for 20x4 (the base year),20x5,and 20x6 are $40,000,$31,200,and $49,200,respectively,the index numbers assigned to 20x5 and 20x6,respectively,are
A)62.4 and 128.
B)156 and 118.
C)128.2 and 133.
D)78 and 123.
Q4) In a common-size balance sheet,total liabilities are represented by 100 percent.
A)True B)False
To view all questions and flashcards with answers, click on the resource link above. Page 18
Chapter 17: Managerial Accounting and Cost Concepts
Available Study Resources on Quizplus for this Chatper
200 Verified Questions
200 Flashcards
Source URL: https://quizplus.com/quiz/75581
Sample Questions
Q1) The credibility standard of management accountants state that management accountants must communicate information fairly and objectively.This means essentially that accountants must perform each task
A)as professionals,possessing the degree of skill of those management accountants who held the position before them.
B)to provide relevant information,both positive and negative,to the recipients of their reports.
C)in conformity with generally accepted accounting principles.
D)to the satisfaction of government regulators.
Q2) Although the purpose of the confidentiality standard is to encourage management accountants to remain loyal to their company,failure to disclose knowledge of internal illegal acts to outside authorities can result in the accountants being charged as an accessory to the crime.
A)True
B)False
Q3) Financial accounting reports are prepared on a periodic basis.
A)True
B)False
Q4) Give two examples of each stage in the management process.
To view all questions and flashcards with answers, click on the resource link above. Page 19
Chapter 18: Costing Systems: Job Order Costing
Available Study Resources on Quizplus for this Chatper
122 Verified Questions
122 Flashcards
Source URL: https://quizplus.com/quiz/75580
Sample Questions
Q1) The type of product costing system used by a company is dictated by the
A)cost flow assumptions made by the company.
B)production process of the product.
C)inventory system used by the company.
D)selling price of the product.
Q2) If the actual overhead costs are more than applied overhead costs,the difference represents overapplied overhead costs.
A)True
B)False
Q3) Explain how the unit cost information is used by managers in the management process.
Q4) Which of the following is not a characteristic of a process costing system?
A)A specific time period is used
B)Several Work in Process Inventory accounts are used
C)Product costs are grouped by processes,departments,or work cells
D)Customized products are manufactured
Q5) After a job is completed,the product's unit cost can be determined from the job order cost card.
A)True
B)False
To view all questions and flashcards with answers, click on the resource link above. Page 20
Chapter 19: Costing Systems Process Costing
Available Study Resources on Quizplus for this Chatper
139 Verified Questions
139 Flashcards
Source URL: https://quizplus.com/quiz/75579
Sample Questions
Q1) Which of the following cost flow assumptions most closely follows the logical product flow in a process costing environment?
A)Average
B)LIFO
C)FIFO
D)HIFO
Q2) The number of equivalent units of production will always be lesser than the number of completed units during the period.
A)True
B)False
Q3) In a process costing system,total period costs incurred by a company are traced to individual processes.
A)True
B)False
Q4) Processes in a process costing system must incur the same amount of costs.
A)True
B)False
Q5) Mention the two cost allocation methods used in a process costing system.
Q6) How are costs recognized,matched,and measured in a process costing system?
Page 21
To view all questions and flashcards with answers, click on the resource link above.
Chapter 20: Value-Based Systems: Activity-Based Costing and Lean Accounting
Available Study Resources on Quizplus for this Chatper
146 Verified Questions
146 Flashcards
Source URL: https://quizplus.com/quiz/75577
Sample Questions
Q1) For a manufacturer,the final customer is part of the supply chain and customer service is part of the value chain.
A)True
B)False
Q2) Distinguish between a supply chain and a value chain.How do they relate to each other?
Q3) Which of the following is a product-level activity cost?
A)Securing the factory
B)Testing the speakers
C)Redesigning the installation process
D)Materials handling
Q4) Under new methods of management,attempts to continuously improve the work environment come from
A)top management.
B)each department manager.
C)the board of directors
D)everyone in the company.
Q5) A bill of activities will complicate the estimation of profits of a company. A)True
B)False
To view all questions and flashcards with answers, click on the resource link above. Page 22
Chapter 21: Cost-Volume-Profit Analysis
Available Study Resources on Quizplus for this Chatper
163 Verified Questions
163 Flashcards
Source URL: https://quizplus.com/quiz/75576
Sample Questions
Q1) Myrid Inc.sells each crystal goblet that it produces for $75.The contribution margin per goblet is $20.Total monthly fixed costs are estimated to be $82,600.How many units should Myrid sell in a month to breakeven? (Round your answer to the nearest whole number. )
A)4,130 goblets.
B)1,101 goblets.
C)1,502 goblets.
D)869 goblets.
Q2) Neverlate is world famous for its precision pocket watches.The company has estimated that variable manufacturing costs and variable selling costs per watch will be $72 and $43,respectively,for 2014.Also during 2014,the company is expecting fixed manufacturing costs to total $291,600 and fixed general and administrative expenses to amount to $253,175.The anticipated selling price of each watch is $500.Compute (a)the breakeven point in sales units and (b)the breakeven point in sales dollars.
Q3) In terms of cost behavior,telephone expenses are often classified as
A)sunk costs.
B)variable costs.
C)fixed costs.
D)mixed costs.
To view all questions and flashcards with answers, click on the resource link above.
Page 23
Chapter 22: The Budgeting Process
Available Study Resources on Quizplus for this Chatper
113 Verified Questions
113 Flashcards
Source URL: https://quizplus.com/quiz/75575
Sample Questions
Q1) Sales budget is the final product of the budgeting process.
A)True
B)False
Q2) Which of the following budgets would be prepared immediately after the preparation of the overhead budget?
A)Cash budget
B)Production budget
C)Cost of goods sold budget
D)Cost of goods manufactured budget
Q3) What would be the sales budget for March of Fantastic Futons?
A)$7,200,000
B)$8,000,000
C)$6,750,000
D)$9,000,000
Q4) Which of the following is true of budgets?
A)Every budget must contain both revenues and expenses.
B)Budgets reduce the comparability concept of accounting.
C)The data in budgets are presented in dollars only;nonfinancial data should be excluded.
D)Budgets are synonymous with managing an organization.
Page 24
To view all questions and flashcards with answers, click on the resource link above.
Chapter 23: Flexible Budgets and Performance Analysis
Available Study Resources on Quizplus for this Chatper
116 Verified Questions
116 Flashcards
Source URL: https://quizplus.com/quiz/75574
Sample Questions
Q1) One of the drawback of the return on investment performance measure is that it considers both operating and nonoperating income.
A)True
B)False
Q2) For purposes of computing EVA,the minimum desired rate or return on an investment is known as
A)ROI.
B)cost of capital.
C)residual income.
D)profit margin.
Q3) What are some of the limitations of using ROI,residual income,and EVA to measure the performance of investment centers?
Q4) A flexible budget is derived by dividing actual unit costs by the standard unit costs. A)True
B)False
Q5) What are some items that can affect an investment center's EVA calculation,and how can EVA be improved?
Q6) Write a brief note on the performance-based pay.
To view all questions and flashcards with answers, click on the resource link above. Page 25
Chapter 24: Standard Costing and Variance Analysis
Available Study Resources on Quizplus for this Chatper
120 Verified Questions
120 Flashcards
Source URL: https://quizplus.com/quiz/75573
Sample Questions
Q1) "The difference between actual hours worked and standard hours allowed for the good units produced,multiplied by the standard labor rate" is a description of the
A)direct labor rate variance.
B)direct labor efficiency variance.
C)total direct labor cost variance.
D)direct labor quantity variance.
Q2) Standard costs are realistically predetermined costs of direct materials,direct labor,and overhead that usually are expressed as a cost per unit.
A)True
B)False
Q3) The formula used to compute budgeted total cost at any level of activity is presented in the A)flexible budget.
B)performance report.
C)static budget.
D)cash flow forecast.
Q4) Another name for a flexible budget is a variable budget.
A)True
B)False
To view all questions and flashcards with answers, click on the resource link above. Page 26
Chapter 25: Short-Run Decision Analysis and Capital Budgeting
Available Study Resources on Quizplus for this Chatper
185 Verified Questions
185 Flashcards
Source URL: https://quizplus.com/quiz/75572
Sample Questions
Q1) The carrying value of the old asset in a machine replacement decision is relevant. A)True
B)False
Q2) Capital investment analysis is beneficial only for large corporations.
A)True
B)False
Q3) Fixed costs are often irrelevant in make-or-buy decisions.
A)True
B)False
Q4) Capital investment analysis can be applied in case of expensive and long-term projects.
A)True
B)False
Q5) "Variable costs are relevant and fixed costs are irrelevant." Explain why you agree or disagree with this statement.
Q6) Many management decisions are unique and hence incompatible with strict rules,steps,or timetables.
A)True
B)False
To view all questions and flashcards with answers, click on the resource link above. Page 27