Introduction to Financial Accounting
Midterm Exam
Course Introduction
Introduction to Financial Accounting provides students with a foundational understanding of the principles and practices used to prepare, analyze, and interpret financial statements. The course covers essential topics such as the accounting cycle, double-entry bookkeeping, accrual accounting, and the preparation of key financial reports, including the balance sheet, income statement, and statement of cash flows. Students will learn the significance of Generally Accepted Accounting Principles (GAAP), how to record common business transactions, and the importance of ethical standards in financial reporting. By the end of the course, students will be equipped with the skills necessary to assess the financial health of a business and make informed economic decisions.
Recommended Textbook
Financial Accounting 4th Edition by Robert Kemp
Available Study Resources on Quizplus 12 Chapters
1893 Verified Questions
1893 Flashcards
Source URL: https://quizplus.com/study-set/1488 Page 2
Chapter 1: Business, Accounting, and You
Available Study Resources on Quizplus for this Chatper
159 Verified Questions
159 Flashcards
Source URL: https://quizplus.com/quiz/29548
Sample Questions
Q1) When an owner combines their personal assets with the assets of their business, what concept or principle of accounting is being violated?
A)Going concern
B)Objectivity
C)Business entity
D)Cost Answer: C
Q2) The business entity concept requires that the owner's personal assets be separated from business assets.
A)True
B)False Answer: True
Q3) Accounting information is used to help managers and decision makers understand risk.
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
152 Verified Questions
152 Flashcards
Source URL: https://quizplus.com/quiz/29552
Sample Questions
Q1) A business generally has just one expense account.
A)True
B)False
Answer: False
Q2) Transactions are recorded in order of the dollar amount of the transaction.
A)True
B)False Answer: False
Q3) A type of asset in which a customer owes the company money would be a:
A)dividend.
B)receivable.
C)payable.
D)sale.
Answer: B
Q4) Accounts that start with the numbers 6-9 would probably be:
A)other revenues and expenses.
B)other assets and liabilities.
C)other Stockholders' Equity.
D)other assets and revenues.
Answer: A
To view all questions and flashcards with answers, click on the resource link above. Page 4
Chapter 3: Adjusting and Closing Entries
Available Study Resources on Quizplus for this Chatper
155 Verified Questions
155 Flashcards
Source URL: https://quizplus.com/quiz/29553
Sample Questions
Q1) Accounts Receivable and Accounts Payable are examples of accruals.
A)True
B)False
Answer: True
Q2) Revenues are:
A)additions to Retained Earnings.
B)subtractions from Retained Earnings.
C)additions to dividends.
D)subtractions from net income.
Answer: A
Q3) At the beginning of the period, the Supplies account has a balance of $700. At the end of the period, the balance in the account was $475. The adjusting entry would be:
A)debit Supplies Expense, $475; credit Supplies, $475.
B)debit Supplies, $475; credit Supplies Expense, $475.
C)debit Supplies Expense, $225; credit Supplies, $225.
D)debit Supplies, $225; credit Supplies Expense, $225.
Answer: C
To view all questions and flashcards with answers, click on the resource link above.
Chapter 4: Accounting for a Merchandising Business
Available Study Resources on Quizplus for this Chatper
158 Verified Questions
158 Flashcards
Source URL: https://quizplus.com/quiz/29554
Sample Questions
Q1) A discount offered as an inducement for prompt payment of an invoice is called a(n):
A)invoice discount.
B)purchase discount.
C)early discount.
D)cash discount.
Q2) TNT Corporation pays an invoice for $4,500 in time to take a 5% discount. The journal entry to record the payment of this invoice is:
A)debit Accounts Payable $4,500; credit Cash $4,500.
B)debit Accounts Payable $4,275; credit Cash $4,275.
C)debit Accounts Payable $4,275, debit Inventory $225; credit Cash for $4,500.
D)debit Accounts Payable $4,500; credit Inventory $225, credit Cash for $4,275.
Q3) Inventory for a merchandising business is classified as a(n):
A)liability.
B)revenue.
C)part of Stockholders' Equity. D)asset.
Q4) On the Balance Sheet, assets are listed in alphabetical order. A)True
B)False
Page 6
To view all questions and flashcards with answers, click on the resource link above.
Chapter 5: Inventory
Available Study Resources on Quizplus for this Chatper
155 Verified Questions
155 Flashcards
Source URL: https://quizplus.com/quiz/29555
Sample Questions
Q1) The journal entry to record the purchase of $7,500 of inventory on account under the perpetual inventory system is:
A)debit Inventory, $7,500; credit Cash, $7,500.
B)debit Purchases, $7,500; credit Accounts Payable, $7,500.
C)debit Inventory, $7,500; credit Accounts Payable, $7,500.
D)debit Cost of Goods Sold, $7,500; credit Inventory, $7,500.
Q2) Under the LIFO method, the flow of costs through the accounting records will:
A)be nearly the opposite of the physical flow of goods through the business.
B)closely match the physical flow of goods through the business.
C)exactly match the physical flow of goods through the business.
D)have no relationship to the physical flow of goods through the business.
Q3) GAAP allows two different kinds of inventory costing methods.
A)True
B)False
Q4) New technology, like the latest cell phones and HDTV, would probably be costed using the:
A)LIFO method of inventory costing.
B)FIFO method of inventory costing.
C)moving average method of inventory costing.
D)any method as the physical flow and the cost flow are different.
To view all questions and flashcards with answers, click on the resource link above. Page 7
Chapter 6: The Challenges of Accounting: Standards, Internal
Control, Audits, Fraud, and Ethics
Available Study Resources on Quizplus for this Chatper
145 Verified Questions
145 Flashcards
Source URL: https://quizplus.com/quiz/29556
Sample Questions
Q1) The delegation of authority and responsibility is part of the control environment of an internal control system.
A)True
B)False
Q2) Establishing a hierarchy to let all management and employees know what is going on in a company would be an example of what element of internal control?
A)Risk assessment
B)Monitoring
C)Information and communication
D)Control environment
Q3) Another name for an "except for" audit opinion is a(n):
A)disclaimer of opinion.
B)qualified opinion.
C)adverse opinion.
D)unqualified opinion.
Q4) Audits confirm the validity and reliability of accounting information.
A)True
B)False
To view all questions and flashcards with answers, click on the resource link above. Page 8
Chapter 7: Cash and Receivables
Available Study Resources on Quizplus for this Chatper
165 Verified Questions
165 Flashcards
Source URL: https://quizplus.com/quiz/29557
Sample Questions
Q1) Because petty cash funds are for small dollar amounts, internal control policies to govern the fund are not necessary.
A)True
B)False
Q2) A customer's written promise to pay an amount of money to a business with interest is a(n)________ of the business.
A)account receivable
B)account payable
C)note receivable
D)note payable
Q3) U.S. Treasury notes must mature within ________ days of the Balance Sheet date in order to be considered cash equivalents.
A) 60
B) 90
C)120
D)180
Q4) Accounts Receivable are classified as Current Assets.
A)True
B)False
To view all questions and flashcards with answers, click on the resource link above. Page 9
Chapter 8: Long-Term and Other Assets
Available Study Resources on Quizplus for this Chatper
171 Verified Questions
171 Flashcards
Source URL: https://quizplus.com/quiz/29558
Sample Questions
Q1) A fixed asset's useful life may be shorter than its physical life due to obsolescence.
A)True
B)False
Q2) The footnotes to the financial statements will include a description of the intangible asset and its estimated useful life.
A)True
B)False
Q3) Which of the following would be considered part of the cost of machinery and equipment?
A)Sales taxes
B)Repairs after start-up
C)Maintenance
D)Insurance after purchase
Q4) Computing depletion expense is much like computing depreciation under the straight-line method.
A)True
B)False
To view all questions and flashcards with answers, click on the resource link above.
Chapter 9: Current Liabilities and Long-Term Debt
Available Study Resources on Quizplus for this Chatper
171 Verified Questions
171 Flashcards
Source URL: https://quizplus.com/quiz/29559
Sample Questions
Q1) By NOT accruing warranty expense:
A)reported liabilities will be overstated and net income will be understated.
B)reported expenses will be overstated and reported liabilities will be understated.
C)reported liabilities will be understated and net income will be overstated.
D)reported expenses will be understated and net income will be understated.
Q2) The amount that a borrower must pay back to the bondholders on the maturity date is the:
A)principal.
B)interest.
C)stated value.
D)market value.
Q3) If a $6,000, 10 percent, 10-year bond was issued at 106 on October 1, how much will accrued interest payable be on December 31 if interest payments are made annually? (Round any intermediary calculations to the nearest cent and your final answer to the nearest dollar.)
A)$106
B)$132
C)$150
D)$168
To view all questions and flashcards with answers, click on the resource link above.
Page 11
Chapter 10: Corporations: Paid-In Capital and Retained Earnings
Available Study Resources on Quizplus for this Chatper
165 Verified Questions
165 Flashcards
Source URL: https://quizplus.com/quiz/29549
Sample Questions
Q1) Charmed, Inc. reacquired 7,000 shares of its $16-par common stock for $11/share. The debit to Treasury Stock will be:
A)$35,000.
B)$77,000.
C)$112,000.
D)based on the last treasury stock transaction.
Q2) When a company purchases treasury stock, outstanding stock is computed as:
A)Issued stock + Treasury stock
B)Issued stock - Treasury stock
C)Authorized stock - Treasury stock
D)Authorized stock + Treasury stock
Q3) Mike's Motors has 220,000 shares of $6-par common stock outstanding. They have declared a 10% stock dividend. The current market price of the common stock is $14/share. The amount that will be credited to Common Stock on the date of declaration is:
A)$132,000.
B)$440,000.
C)$308,000.
D)$184,800.
Page 12
To view all questions and flashcards with answers, click on the resource link above.
Chapter 11: The Statement of Cash Flows
Available Study Resources on Quizplus for this Chatper
135 Verified Questions
135 Flashcards
Source URL: https://quizplus.com/quiz/29550
Sample Questions
Q1) S&C's records show Accounts Receivable amounted to $205,000 at the beginning of the year and $240,000 at the end of the year. Income reported on the Income Statement for the year was $310,000. The cash flow from operating activities on the cash flow statement using the indirect method is:
A)$345,000.
B)$275,000.
C)$310,000.
D)$327,500.
Q2) One formula for determining cash collections from customers is to take Sales plus the increase in Accounts Receivable.
A)True
B)False
Q3) The cash conversion cycle represents the number of days the cash is "tied up" in the operating activities of the business.
A)True
B)False
Q4) Cash received from the sale of land would be included in financing activities.
A)True
B)False
To view all questions and flashcards with answers, click on the resource link above. Page 13
Chapter 12: Financial Statement Analysis
Available Study Resources on Quizplus for this Chatper
162 Verified Questions
162 Flashcards
Source URL: https://quizplus.com/quiz/29551
Sample Questions
Q1) Wildling Supply Company has net sales of $1,150,000, net income of $90,000, average current assets of $50,000, average fixed assets of $182,000, and average total assets of $232,000. Wildling's total asset turnover ratio is: (Round your final answer to two decimal places.)
A)23.00.
B)0.16.
C)6.32.
D)4.96.
Q2) An acid test (quick ratio)of 0.75 would indicate:
A)a ratio that would allow a company to pay off current liabilities with quick assets.
B)that for every $1 of quick assets, there are $0.75 in liabilities.
C)that for every $1 of liabilities, there are $0.75 in quick assets.
D)a ratio that would allow a company to pay off current liabilities with current assets.
Q3) Net income belongs to a company's stockholders.
A)True
B)False
To view all questions and flashcards with answers, click on the resource link above.
Page 14