Introduction to Accounting II Pre-Test
Questions
Course Introduction
Introduction to Accounting II builds on foundational accounting principles covered in the first course, deepening students' understanding of financial accounting concepts and procedures. This course focuses on more complex transactions, including inventory valuation, receivables, long-term assets, liabilities, and equity accounting. Students will also explore the preparation and analysis of financial statements, as well as concepts related to internal controls and ethics in accounting. Through practical problem-solving exercises and case studies, students will gain the skills necessary to accurately record, classify, and interpret financial information for business decision-making.
Recommended Textbook
Horngren's Accounting Volume 2 10th Canadian Edition by Tracie L. Miller Nobles
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7 Chapters
1392 Verified Questions
1392 Flashcards
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Chapter 1: Partnerships
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202 Verified Questions
202 Flashcards
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Sample Questions
Q1) Which of the following statements about the liquidation of a partnership is TRUE?
A) Gains and losses from the disposal of assets are always distributed to the partner's capital accounts based on their respective percentage of total capital.
B) The final cash distribution is always based on equal shares.
C) The final cash distribution is based on the partners' capital account balances.
D) The final cash distribution is always based on the profit sharing formula specified in the partnership agreement.
Answer: C
Q2) Refer to Table 12-9.What is the balance in Wally's capital account after revaluing the assets?
A) $81,500
B) $18,500
C) $92,000
D) $8,000
Answer: A
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Chapter 2: Corporations: Share Capital and the Balance Sheet
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180 Verified Questions
180 Flashcards
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Sample Questions
Q1) Which of the following is a priority granted to preferred shareholders?
A) voting for the corporate board of directors
B) receiving assets before creditors if the corporation liquidates
C) receiving dividends before common shareholders
D) receiving a guaranteed fixed dollar amount of dividends each year
Answer: C
Q2) The document(s_used by a government to grant permission to form a corporation is called (a):
A) proxy
B) articles of incorporation
C) share certificate
D) bylaw agreement
Answer: B
Q3) Retained earnings is debited to transfer net income to the retained earnings account during the closing process.
A)True
B)False
Answer: False
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Chapter 3: Corporations: Retained Earnings and the
Income Statement
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205 Verified Questions
205 Flashcards
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Sample Questions
Q1) When repurchased shares are sold,retained earnings could be credited in the journal entry.
A)True
B)False
Answer: False
Q2) When a company sells a piece of equipment used in the business,the gain or loss on the disposal is shown as:
A) an extraordinary item
B) part of discontinued operations
C) other gains and losses
D) an adjustment to the beginning balance of retained earnings
Answer: C
Q3) Identify three reasons why a corporation might repurchase its own shares.
Answer: 1.The corporation may have issued all its authorized shares and needs to recover shares for distribution under bonus plans or share purchase plans.
2.The purchase may help support the share's current market price by decreasing the supply of shares available to the public.
3.Management may gather in the shares to avoid a takeover by an outside party.
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Chapter 4: Long-Term Liabilities
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186 Verified Questions
186 Flashcards
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Sample Questions
Q1) Refer to Table 15-6.Assuming the bonds were issued on June 1,2017,at 103.75,and the company uses the straight-line method of amortization,then the adjusting entry on December 31,2017,to accrue interest and record applicable amortization would include a debit to premium on bond payable of what amount?
Q2) The entry to record the semiannual interest payment on bonds that were issued at par value includes a:
A) debit to Interest Expense
B) credit to Discount on Bonds Payable
C) debit to Bonds Payable
D) credit to Interest Expense
Q3) Starship Inc.has $1,600,000 of bonds outstanding with an unamortized discount of $73,200 immediately following the latest interest payment.At that time,the bonds were converted into 40,000 common shares.The entry to record the conversion would include a:
A) debit to Discount on Bonds Payable for $73,200
B) credit to Common Shares for $1,600,000
C) debit to Bonds Payable for $1,526,800
D) credit to Common Shares for $1,526,800
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6
Chapter 5: Investments and International Operations
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191 Verified Questions
191 Flashcards
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Sample Questions
Q1) On June 30,2017,Raven Corporation purchased five-year,6% bonds of Cannon Limited as an investment at a price of 102.Raven Corporation plans on holding these bonds for the five-year term when their maturity value will be $500,000.Raven amortizes the premium or discount on bonds using the straight-line method.The bonds pay interest on June 30 and December 31.The market value of these bonds on December 31,2017 is $505,000
a_Journalize all transactions for the bonds for 2017.
b_Show how the investment would be reported on the balance sheet at December 31,2017.
Q2) Long-Term Equity Investments with significant influence are recording using the following accounting method:
A) fair-value method
B) equity method
C) proportionate consolidation
D) consolidation
Q3) Goodwill is the excess of the cost to acquire another company over the sum of the fair value of its net assets.
A)True
B)False
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Chapter 6: The Cash Flow Statement
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207 Verified Questions
207 Flashcards
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Sample Questions
Q1) Refer to Table 17-1.The total purchases of merchandise for the period were:
A) $425,500
B) $368,000
C) $353,000
D) $343,800
Q2) In the long run,operations must be the main source of a business's cash.
A)True
B)False
Q3) ASPE cash flow statement classification of dividend payments
Q4) Cash payments to suppliers equals purchases plus the decrease in accounts payable.
A)True
B)False
Q5) Cash payments for income tax equals the income tax expense less the decrease in income tax payable.
A)True
B)False
Q6) IFRS statement of cash flows classification of dividend payments
Q7) A purpose of the cash flow statement
Q8) The most important long-run source of cash inflow
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Chapter 7: Financial Statement Analysis
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214 Verified Questions
214 Flashcards
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Sample Questions
Q1) Working capital is a measure of a company's profitability.
A)True
B)False
Q2) Select the letter of the ratio title that corresponds to the following formula.
\(\frac{\text {Total shareholders' equity - Preferred equity }}{\text {Number of common shares outstanding }}\)
A)Current ratio
B)Acid-test (quick) ratio
C)Inventory turnover
D)Accounts receivable turnover
E)Day's sales in average accounts receivable
F)Debt ratio
G)Times-interest-earned ratio
H)Rate of return on net sales (profit margin)
I)Rate of return on total assets
J)Rate of return on common shareholders' equity
K)Earnings per common share
L)Price/earnings ratio
M)Dividend yield
N)Book value per common share
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Page 9