Fundamentals of Accounting Mock
Exam
Course Introduction
Fundamentals of Accounting introduces students to the basic principles and concepts underlying the accounting system. The course covers essential topics such as the accounting cycle, double-entry bookkeeping, preparation of financial statements, and the analysis and interpretation of financial information. Students will gain a foundational understanding of how businesses record, summarize, and report financial transactions, enabling them to accurately assess the financial health of an organization and make informed economic decisions. This course serves as a crucial starting point for further studies in accounting and related business disciplines.
Recommended Textbook Survey of Accounting 7th Edition by Carl Warren
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15 Chapters
1730 Verified Questions
1730 Flashcards
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Page 2
Chapter 1: The Role of Accounting in Business
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100 Verified Questions
100 Flashcards
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Sample Questions
Q1) Univeo,Inc.had revenues of $245,000,expenses of $180,000,and dividends of $45,000 during 2015.Which of the following statements is correct?
A)Net income for 2015 totaled $65,000.
B)Net income for 2015 totaled $20,000.
C)Total retained earnings increased by $65,000 during 2015.
D)Total retained earnings decreased by $20,000 during 2015.
Answer: A
Q2) A limited liability company combines attributes of a partnership and a corporation. A)True
B)False Answer: True
Q3) Accounting is thought to be the "language of business" because business information is communicated to stakeholders. A)True
B)False
Answer: True
Q4) Fill in the missing amounts of the following balance sheet: Answer: a.$4,500 b.$9,000 c.$9,850 d.$32,550
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Chapter 2: Basic Accounting Concepts
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91 Verified Questions
91 Flashcards
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Sample Questions
Q1) Anthony,Inc.buys land for $50,000 cash.The net effect on assets is:
A)$50,000 increase.
B)$0.
C)$50,000 decrease.
D)$25,000 increase.
Answer: B
Q2) BNC Company earns revenues and as a result collects cash.Which of the following financial statement elements increased?
A)Cash only
B)Stockholders' equity only
C)Liabilities
D)Cash and stockholders' equity
Answer: D
Q3) By keeping a running total of the effects of transactions,the accounting equation provides a framework for summarizing the effects of a series of transactions.
A)True
B)False
Answer: True
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Chapter 3: Accrual Accounting Concepts
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115 Verified Questions
115 Flashcards
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Sample Questions
Q1) The accrual basis of accounting requires revenue to be recorded when the service is performed.
A)True
B)False
Answer: True
Q2) Which of the following accounts would likely be included in a deferral adjusting entry?
A)Interest Revenue
B)Unearned Revenue
C)Salaries Payable
D)Accounts Receivable
Answer: B
Q3) Depreciation Expense and Accumulated Depreciation are classified,respectively,as:
A)expense and contra asset.
B)asset and contra liability.
C)revenue and asset.
D)contra asset and expense.
Answer: A
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Chapter 4: Accounting for Merchandising Businesses
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145 Verified Questions
145 Flashcards
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Sample Questions
Q1) Net income or loss may appear on the income statement of both a service business and a merchandising business.
A)True
B)False
Q2) Multiple-step income statements show:
A)gross profit but not net income.
B)neither gross profit nor net income.
C)gross profit but not cost of merchandise sold.
D)gross profit,cost of merchandise sold,income from operations and net income.
Q3) Merchandise subject to terms 2/10,n/30,FOB shipping point,is sold on account to a customer for $35,000.The seller issued a credit memorandum for $8,000 prior to payment.What is the amount of the cash discount allowable?
A)$700
B)$540
C)$860
D)$350
Q4) Sales Returns and Allowances is a contra-asset account.
A)True
B)False
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Chapter 5: Sarbanes-Oxley, internal Control, and Cash
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112 Verified Questions
112 Flashcards
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Sample Questions
Q1) For each of the following procedures,indicate whether it is an internal control strength or a weakness.Also,for each weakness,explain why it is a weakness and how it can be corrected.
Q2) A credit memorandum received with a bank statement means the company's bank account has been increased.
A)True
B)False
Q3) When a firm uses internal auditors,it is adhering to which of the following internal control elements?
A)Risk assessment
B)Control procedures
C)Monitoring
D)Information and communication
Q4) Which of the following of internal control deals with hiring,training,evaluation,compensation,and promotion of employees?
A)Monitoring
B)Control environment
C)Risk assessment
D)Control procedures
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Chapter 6: Receivables and Inventories
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105 Verified Questions
105 Flashcards
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Sample Questions
Q1) In reference to a promissory note,the person who is to receive payment is called the: A)maker.
B)payee.
C)seller.
D)payer.
Q2) A note receivable due in 18 months is listed on the balance sheet under the caption:
A)long-term liabilities.
B)fixed assets.
C)current assets.
D)investments.
Q3) A 90-day,10% note for $10,000 dated March 15 is received from a customer on account.The face value of the note is:
A)$10,250.
B)$9,000.
C)$9,750.
D)$10,000.
Q4) Classify the following as either Current Assets (CA),Investments (I),or both (CA and I).
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8
Chapter 7: Fixed Assets and Intangible Assets
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90 Verified Questions
90 Flashcards
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Sample Questions
Q1) Goodwill refers to the excess of purchase price of a business over the fair value of its net assets.
A)True
B)False
Q2) Identify the following as a Fixed Asset (FA),Intangible Asset (IA),Natural Resource (NR),or None of these (N).
(a) Computer
(b) Patent
(c) Oil reserve
(d) Goodwill
(e) U.S. Treasury note
(f) Land used for employee parking
(g) Gold mine
Q3) A fully depreciated asset must be:
A)removed from the books.
B)kept on the books until sold or discarded.
C)disclosed only in the notes to the financial statements.
D)recognized on the income statement as a loss.
Q4) Determine the cost of the land,based on the following data.
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Chapter 8: Liabilities and Stockholders Equity
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133 Verified Questions
133 Flashcards
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Sample Questions
Q1) Medicare taxes are paid only by employee.
A)True
B)False
Q2) A company has total assets of $320,000,total liabilities of $180,000,and total stockholders' equity is $140,000.Calculate ratio of liabilities to stockholders' equity.
A)2.3
B)1.7
C)1.3
D)3.2
Q3) An employee receives an hourly rate of $30,with time and a half for all hours worked in excess of 40 during a week.Payroll data for the current week are as follows: hours worked,46; federal income tax withheld,$300; cumulative earnings for year prior to current week,$90,700; social security tax rate,6.0% on maximum of $106,800; and Medicare tax rate,1.5% on all earnings.What is the net pay for the employee?
A)$1,147.95
B)$1,059.75
C)$1,470.00
D)$1,359.75
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Chapter 9: Financial Statement Analysis
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69 Verified Questions
69 Flashcards
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Sample Questions
Q1) The independent auditor's report does which of the following?
A)Describes that the common-sized statements are covered by the audit.
B)Gives the auditor's opinion regarding the fairness of the financial statements.
C)Summarizes what the auditor did.
D)States that the financial statements are effective.
Q2) Condensed data taken from the ledger of Crawford Company at December 31,2016 and 2015,are as follows:
Q3) The ratio of current assets to current liabilities is referred to as the acid-test ratio.
A)True
B)False
Q4) The ability to convert assets into cash is called .
A)Solvency
B)Profitability
C)Working capital
D)Liquidity
Q5) Solvency analysis focuses on the ability of a business to make a profit.
A)True
B)False
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Chapter 10: Accounting Systems for Manufacturing
Businesses
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119 Verified Questions
119 Flashcards
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Sample Questions
Q1) Which of the following businesses is most likely to use process cost accounting system?
A)Custom cabinet manufacturer
B)Dress designer
C)Lumber mill
D)Printing firm
Q2) A manufacturing business converts materials into finished products through the use of machinery and labor.
A)True
B)False
Q3) Compute factory overhead cost from the following costs:
A)$23,000
B)$43,000
C)$70,000
D)$113,000
Q4) If the cost of materials is not a significant portion of the total product cost,the materials may be classified as a part of factory overhead cost.
A)True
B)False
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Chapter 11: Cost Behavior and Cost-Volume-Profit Analysis
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140 Verified Questions
140 Flashcards
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Sample Questions
Q1) Cost-volume-profit analysis can be presented in both graphically and equation form.
A)True B)False
Q2) Only a single line,which represents the difference between total sales revenues and total costs,is plotted on the cost-volume-profit chart.
A)True B)False
Q3) For the past year,Cline Company had fixed costs of $6,552,000,a unit variable cost of $444,and a unit selling price of $600.For the coming year,no changes are expected in revenues and costs except that a new wage contract will increase variable costs by $6 per unit.Determine the break-even sales (in units)for (a)the past year and (b)the coming year.
Q4) The graph of the variable costs when plotted against the activity level appears as a line parallel to horizontal axis.
A)True B)False
Q5) A company has a margin of safety of 25%,a contribution margin ratio of 30%,and sales of $1,000,000.
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Chapter 12: Differential Analysis and Product Pricing
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102 Verified Questions
102 Flashcards
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Sample Questions
Q1) The condensed income statement for a business for the past year is as follows:
A)$40,000 decrease
B)$180,000 decrease
C)$70,000 decrease
D)$170,000 decrease
Q2) A business is operating at 90% of capacity and is currently purchasing a part used in its manufacturing operations for $15 per unit.The unit cost for the business to make the part is $20,including fixed costs,and $12,not including fixed costs.If 30,000 units of the part are normally purchased during the year but could be manufactured using unused capacity,what would be the amount of differential cost increase or decrease from making the part rather than purchasing it?
A)$150,000 increase
B)$ 90,000 decrease
C)$150,000 decrease
D)$ 90,000 increase
Q3) Quick Company has been purchasing a component,Part Q,for $20 a unit.Quick is currently operating at 70% of capacity and no significant increase in production is anticipated in the near future.The cost of manufacturing a unit of Part Q,determined by absorption costing method,is estimated as follows:
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Page 14
Chapter 13: Budgeting and Standard Cost Systems
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169 Verified Questions
169 Flashcards
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Sample Questions
Q1) Frogue Corporation uses a standard cost system.The following information was provided for the period that just ended:
A)$1,310 favorable.
B)$820 favorable.
C)$1,310 unfavorable.
D)$820 unfavorable.
Q2) If the standard to produce a given amount of product is 1,000 units of direct materials at $11 and the actual was 800 units at $12,the direct materials quantity variance was $2,200 favorable.
A)True
B)False
Q3) Goal conflict can be avoided if budget goals are carefully designed for consistency across all areas of the organization.
A)True
B)False
Q4) The first budget to be prepared is usually the production budget. A)True
B)False
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Chapter 14: Performance Evaluation for Decentralized Operations
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137 Verified Questions
137 Flashcards
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Sample Questions
Q1) Which type of organization would be most effective for a small owner/manager-operated business?
A)Decentralized
B)Centralized
C)Matrix
D)Segmented
Q2) Personnel administration expense for a department in a store is an indirect expense.
A)True
B)False
Q3) It is beneficial for two related companies to use the cost price approach for transfer pricing when both the companies operate as cost centers and are not concerned with the revenue.
A)True
B)False
Q4) The manager of a profit center does not make decisions concerning the fixed assets invested in the center.
A)True
B)False
Page 16
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Chapter 15: Capital Investment Analysis
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103 Verified Questions
103 Flashcards
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Sample Questions
Q1) Mars Corp.is choosing between two different capital investment proposals.Machine A has a useful life of 4 years,and Machine B has a useful life of 6 years.Each proposal requires an initial investment of $200,000,and the company desires a rate of return of 10%.Although Machine B has a useful life of 6 years,it could be sold at the end of 4 years for $35,000.
A)Mars should invest in Machine A because the net present value of Machine A after 4 years is higher than the net present value of Machine B after 4 years.
B)Mars should invest in Machine B because the net present value of Machine A after 4 years is lower and the net present value of Machine B after 6 years.
C)Mars should invest in Machine B because the net present value of Machine A after 4 years is lower than the net present value of Machine B after 4 years.
D)Mars should invest in Machine A because the net present value of Machine A after 4 years is higher than the net present value of Machine B after 6 years.
Q2) The net present value has been computed for Proposals A and B.Relevant data are as follows:
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