Introduction to Financial Accounting Practice Exam
Course Introduction
Introduction to Financial Accounting provides students with a comprehensive overview of the fundamental principles and practices used to record, classify, and interpret financial transactions in organizations. This course covers essential topics such as the accounting cycle, preparation of financial statements, understanding assets, liabilities, and equity, and applying generally accepted accounting principles (GAAP). Emphasis is placed on the use of accounting information for decision-making and communication with internal and external stakeholders. By the end of the course, students will gain foundational skills needed to analyze financial reports and understand the financial health of a business.
Recommended Textbook
Horngrens Financial Accounting 8th Edition by Tracie Nobles
Available Study Resources on Quizplus
18 Chapters
1546 Verified Questions
1546 Flashcards
Source URL: https://quizplus.com/study-set/3374 Page 2
Chapter 1: The Role of Accounting in Decision Making
Available Study Resources on Quizplus for this Chatper
102 Verified Questions
102 Flashcards
Source URL: https://quizplus.com/quiz/66958
Sample Questions
Q1) Ace Ltd had the following transactions in June: sold goods for $2000 on account;received cash on account,$4000;paid $600 for repair expense;paid $2000 to a supplier that it owed from the previous month.What is the combined effect on Cash of the June transactions?
A)a $1400 increase
B)a $1400 decrease
C)a $2600 decrease
D)a $4000 increase
Answer: A
Q2) The balance sheet of a business represents the account balances as at a particular date in time.
A)True
B)False Answer: True
Q3) Liabilities represent creditors' claims on the business's assets.
A)True
B)False
Answer: True
To view all questions and flashcards with answers, click on the resource link above. Page 3
Chapter 2: Recording Business Transactions
Available Study Resources on Quizplus for this Chatper
94 Verified Questions
94 Flashcards
Source URL: https://quizplus.com/quiz/66959
Sample Questions
Q1) The following are the current month's balances for Toys Galore,before preparing the trial balance. \[\begin{array} { | l | l | }
\hline \text { Accounts payable } & \$ 8000 \\
\hline \text { Revenue } & 5000 \\
\hline \text { Cash } & 5000 \\
\hline \text { Expenses } & 17,500 \\
\hline \text { Furniture } & 10,000 \\
\hline \text { Accounts receivable } & 14,000 \\
\hline \text { Iones, capital } & \\
\hline \text { Loan payable } & 5500 \\
\hline
\end{array}\] What amount should be shown for Jones,capital on the trial balance?
A)$30,000
B)$52,000
C)$28,000
D)$14,500
Answer: C
To view all questions and flashcards with answers, click on the resource link above.
4
Chapter 3: The Adjusting Process
Available Study Resources on Quizplus for this Chatper
61 Verified Questions
61 Flashcards
Source URL: https://quizplus.com/quiz/66960
Sample Questions
Q1) If a company is using the accrual method of accounting,when is revenue recorded?
A)When cash is received,30 days after the completion of the services
B)When cash is received,before the completion of the services
C)When cash is received,even though services may be rendered at a later date
D)When services are rendered,even though cash may be received at a later date
Answer: D
Q2) Qwerty Ltd prepaid $3600 on 1 November 2016 for a one-year insurance premium.On 1 January 2017 of the next year (after 31 December adjustments),the Prepaid insurance account will have a debit balance of:
A)$3900
B)$3000
C)$3600
D)$3300
Answer: B
Q3) Profit from the income statement is reported in the assets section of the balance sheet.
A)True
B)False
Answer: False
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
86 Verified Questions
86 Flashcards
Source URL: https://quizplus.com/quiz/66961
Sample Questions
Q1) Adkins Company has a current ratio of 1.0 and a debt ratio of 0.7.Wilson Company has a current ratio of 1.4 and a debt ratio of 0.5.Both companies are in the same industry.Which of the following statements is TRUE?
A)The two companies' debt ratios and current ratios vary in different directions,and the companies appear to be in similar financial shape.
B)The two companies' debt ratios and current ratios vary in different directions,and these results do not make sense.
C)Wilson Company appears to be in better financial shape than Adkins Company.
D)Adkins Company appears to be in better financial shape than Wilson Company.
Q2) Which of the following do NOT show up on a post-closing trial balance?
A)Capital and liabilities
B)Assets and liabilities
C)Capital and assets
D)Revenues and expenses
Q3) The worksheet is NOT a journal,a ledger or a financial statement.
A)True
B)False
To view all questions and flashcards with answers, click on the resource link above. Page 6
Chapter 5: Retailing Operations
Available Study Resources on Quizplus for this Chatper
99 Verified Questions
99 Flashcards
Source URL: https://quizplus.com/quiz/66962
Sample Questions
Q1) Which of the following is TRUE about freight in?
A)Freight in is a selling expense.
B)Freight in is deducted from Accounts payable.
C)Freight in is added to the cost of inventory.
D)Freight in is an operating expense.
Q2) Cost of sales appears on both a descriptive format income statement and a functional format income statement.
A)True
B)False
Q3) Credit terms of 2/10,n/30 indicate that a 2% discount may be taken if the invoice is paid within 10 days,but the total invoice amount is due if paid on the 11<sup>th</sup> to the 30<sup>th</sup> day after the invoice date.
A)True
B)False
Q4) Inventory is the:
A)equipment that was purchased.
B)goods held by a firm to be sold to customers.
C)goods purchased to run the daily operations of a business.
D)expenses of a firm that were incurred.
To view all questions and flashcards with answers, click on the resource link above. Page 7
Chapter 6: Retail Inventory
Available Study Resources on Quizplus for this Chatper
66 Verified Questions
66 Flashcards
Source URL: https://quizplus.com/quiz/66963
Sample Questions
Q1) Using the LIFO costing method will always produce the same results whether a company uses perpetual or periodic inventory.
A)True
B)False
Q2) A company purchased 130 units for $30 each on 31 January.It purchased 200 units for $35 each on 28 February.It sold 200 units for $60 each from 1 March to 31 December.If the company uses the weighted-average inventory costing method,calculate the amount of cost of sales on the income statement for the year ending 31 December.(Assume the company uses the perpetual inventory system. )
A)$6606
B)$3900
C)$10,900
D)$7000
Q3) Gross profit is Sales revenue divided by Cost of sales.
A)True
B)False
Q4) Under last-in,first-out,the cost of sales is based on the oldest purchases.
A)True
B)False
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
80 Verified Questions
80 Flashcards
Source URL: https://quizplus.com/quiz/66964
Sample
Questions
Q1) Big Industries purchased products from Small Suppliers,paying $5 000 in cash and promising to pay the remaining $5 000 in 30 days.Assuming the use of special journals,this entry would be recorded by Big Industries in the:
A)purchases journal.
B)general journal.
C)cash payments journal.
D)Both A and C
Q2) Posting the entries in the sales journal to the general ledger:
A)should be done on a daily basis.
B)should be done at the end of each month.
C)should be done only at the end of the accounting period.
D)should be done on a weekly basis.
Q3) Which of the following is an alternative title for the cash payments journal?
A)The payments register
B)The cheque register
C)Cash disbursements journal
D)All of the above are alternative titles for the cash payments journal.
Q4) The chart of accounts lists all the accounts and their account numbers.
A)True
B)False
Page 9
To view all questions and flashcards with answers, click on the resource link above.
Chapter 8: Internal Control and Cash
Available Study Resources on Quizplus for this Chatper
125 Verified Questions
125 Flashcards
Source URL: https://quizplus.com/quiz/66965
Sample Questions
Q1) Reducing expense to increase operating profit is representative of:
A)ensuring accurate,reliable accounting records.
B)following company policies.
C)safeguarding assets.
D)promoting operational efficiency.
Q2) Which of the following describes collusion?
A)When a company defrauds its suppliers by making false claims
B)When bogus websites acquire passwords and account numbers fraudulently
C)When two or more people cooperate together to defraud a company
D)When one employee steals from a company
Q3) A 'cash short' situation exists where the cash register tape total is less than the cash on hand.
A)True
B)False
Q4) Cash is the most liquid of all company assets.
A)True
B)False
Q5) Cash in the bank is more liquid than a petty cash fund.
A)True
B)False
10
To view all questions and flashcards with answers, click on the resource link above.
Chapter 9: Receivables
Available Study Resources on Quizplus for this Chatper
94 Verified Questions
94 Flashcards
Source URL: https://quizplus.com/quiz/66966
Sample Questions
Q1) A company has net credit sales of $1,200,000,beginning net accounts receivable of $260,000 and ending net accounts receivable of $203,000.What is the days' sales in receivables? Use a 365-day year.(Round to the nearest day. )
A)62 days
B)79 days
C)70 days
D)141 days
Q2) On 1 October 2016,Android Ltd made a loan to one of its customers.The customer signed a 4-month bill for $130,000 at 13%.How much interest revenue did the company record in the year 2017 for this bill?
A)$2817
B)$5633
C)$1408
D)$4225
Q3) Which of the following is included in the category other receivables?
A)Investments
B)Bills receivable
C)Loans to employees
D)Accounts receivable
To view all questions and flashcards with answers, click on the resource link above. Page 11
Chapter 10: Non-Current Assets: Property, Plant and Equipment, and Intangibles
Available Study Resources on Quizplus for this Chatper
84 Verified Questions
84 Flashcards
Source URL: https://quizplus.com/quiz/66967
Sample Questions
Q1) A coal mine cost $1,007,000 and is estimated to hold 56,000 tonnes of coal.There is no residual value.16,000 tonnes are extracted and sold during the first year of operations.Calculate depletion expense for the first year.
A)$100,700
B)$151,050
C)$287,714.29
D)$201,400
Q2) A revaluation decrement increases the carrying amount of an asset.
A)True
B)False
Q3) A company's accountant expenses a payment that should be capitalised.Which of the following is TRUE?
A)Liabilities are overstated.
B)Revenue is overstated.
C)Assets are overstated.
D)Profit is understated.
Q4) When an asset is fully depreciated,the residual value must be written off.
A)True
B)False
To view all questions and flashcards with answers, click on the resource link above. Page 12
Chapter 11: Current Liabilities and Payroll
Available Study Resources on Quizplus for this Chatper
63 Verified Questions
63 Flashcards
Source URL: https://quizplus.com/quiz/66968
Sample Questions
Q1) A $40,000,three-month,8% note payable was issued on 1 December 2017.What is the amount of accrued interest on 31 December 2017?
A)$267
B)$400
C)$428
D)$200
Q2) Which of the following occurs when a company records accrued interest expense on a loan payable?
A)Loan payable is credited.
B)Cash is debited.
C)Interest payable is credited.
D)Interest expense is credited.
Q3) Unearned revenue is an obligation to provide goods or services to the customer.
A)True
B)False
Q4) Which of the following are deducted to arrive at an employee's net pay?
A)Income taxes
B)Commissions
C)Bonuses
D)Payroll tax
To view all questions and flashcards with answers, click on the resource link above. Page 13
Chapter 12: Non-Current Liabilities, Debentures Payable
and Classification of Liabilities on the Balance Sheet
Available Study Resources on Quizplus for this Chatper
86 Verified Questions
86 Flashcards
Source URL: https://quizplus.com/quiz/66969
Sample Questions
Q1) On 1 January 2017,Bratios Company purchases equipment and signs a 6-year mortgage payable for $93,000 at 15%.The mortgage will be paid in equal annual instalments of $24,574,beginning 1 January 2018.Calculate the portion of principal amount paid on the third instalment.(Round to the nearest dollar. )
A)$14,050
B)$10,524
C)$24,574
D)$13,950
Q2) Which of the following occurs when a debenture's stated interest rate is higher than the market interest rate?
A)The debenture will be issued at par.
B)The debenture will be issued at a discount.
C)The debenture will be issued at maturity value.
D)The debenture will be issued at a premium.
Q3) Once a debenture has been sold to a debenture holder,it may not be re-sold to other investors,but must be held by the first buyer until maturity.
A)True
B)False
To view all questions and flashcards with answers, click on the resource link above. Page 14
Chapter 13: Partnerships
Available Study Resources on Quizplus for this Chatper
91 Verified Questions
91 Flashcards
Source URL: https://quizplus.com/quiz/66970
Sample Questions
Q1) Albert,Billy and Cathy share profits and losses of their partnership as 1:4:3.If the net profit is $70,000,calculate the profit share of Albert.
A)$17,500
B)$35,000
C)$8750
D)$26,250
Q2) When one person purchases the partnership interest of a partner,the cash is paid directly to the existing partner,not to the partnership.
A)True
B)False
Q3) The financial statements of a partnership are similar to the statements of a sole proprietorship in all aspects.
A)True
B)False
Q4) Whenever there is a change in the mix of partners,the old partnership is dissolved and a new one begins.
A)True
B)False
To view all questions and flashcards with answers, click on the resource link above.
Page 15
Chapter 14: Companies: Formation and Shareholders
Equity
Available Study Resources on Quizplus for this Chatper
72 Verified Questions
72 Flashcards
Source URL: https://quizplus.com/quiz/66971
Sample Questions
Q1) Shareholders of a company have unlimited liability for the company's debt.
A)True
B)False
Q2) Which of the following represents one of the basic rights of shareholders?
A)Shareholders may authorise a business contract on behalf of the company.
B)Shareholders can maintain their proportionate ownership if the company issues new shares.
C)Shareholders may sell their shares back to the company if they wish.
D)Shareholders may determine at what price the company issues shares.
Q3) If a company has a strong rate of return on total assets,that shows that they can easily pay off their current liabilities with their current assets.
A)True
B)False
Q4) Which of the following is the correct order of accounts in the shareholders' equity section of the balance sheet?
A)Preference share capital,Ordinary share capital,Retained earnings
B)Retained earnings,Ordinary share capital,Preference share capital
C)Ordinary share capital,Preference share capital,Retained earnings
D)Ordinary share capital,Retained earnings,Preference share capital
To view all questions and flashcards with answers, click on the resource link above. Page 16
Chapter 15: Companies: Capital Management and the Income Statement
Available Study Resources on Quizplus for this Chatper
38 Verified Questions
38 Flashcards
Source URL: https://quizplus.com/quiz/66972
Sample Questions
Q1) Which of the following does NOT require a formal journal entry?
A)Share dividend
B)Share split
C)Issue of new shares
D)Cash dividend
Q2) Which of the following is a common reason for companies to buy back shares?
A)To make a profit on the retirement of shares
B)To reward the shareholders
C)To return surplus cash to shareholders when few profitable investment opportunities exist
D)To increase shareholders' equity
Q3) Which of the following statements is TRUE?
A)A share buy-back decreases assets and increases shareholders' equity.
B)A share buy-back decreases assets and decreases shareholders' equity.
C)A share buy-back increases assets and decreases shareholders' equity.
D)A share buy-back increases assets and increases shareholders' equity.
Q4) The entry to record an appropriation of retained earnings requires a debit to Retained earnings and a credit to Cash.
A)True
B)False
To view all questions and flashcards with answers, click on the resource link above. Page 17
Chapter 16: The Cash Flow Statement
Available Study Resources on Quizplus for this Chatper
110 Verified Questions
110 Flashcards
Source URL: https://quizplus.com/quiz/66973
Sample Questions
Q1) An outflow of cash from an investing activity would be:
A)paying cash dividends to shareholders.
B)buying back shares from shareholders.
C)issuing bills payable.
D)making loans to third parties.
Q2) Which of the following statements about the cash flow statement is FALSE?
A)The indirect method begins with profit and adjusts to calculate operating cash flows.
B)Both the direct and indirect methods include three types of cash flows.
C)The operating activities section of both the direct and the indirect method is the same.
D)The indirect method and the direct method will produce the same amount of cash flow.
Q3) Which of the following sections from the cash flow statement includes activities that affect current assets and current liabilities on the balance sheet?
A)The operating section
B)The investing section
C)The non-cash investing and financing section
D)The financing section
To view all questions and flashcards with answers, click on the resource link above.
18
Chapter 17: The Framework of Accounting
Available Study Resources on Quizplus for this Chatper
78 Verified Questions
78 Flashcards
Source URL: https://quizplus.com/quiz/66974
Sample Questions
Q1) In Australia,in recent years,there has been a move to show some assets at current cost rather than at historical cost.This is because the need for relevancy sometimes outweighs the requirement for reliability.
A)True
B)False
Q2) Professionals such as solicitors may use the ________ to record income if the receipt of fees is regarded as very uncertain.
A)collection method
B)percentage of completion method
C)instalment method
D)sales method
Q3) According to the IASB Framework,accounting information should meet all of the following qualitative characteristics,except:
A)comparability.
B)relevance.
C)reliability.
D)reasonableness.
To view all questions and flashcards with answers, click on the resource link above. Page 19
Chapter 18: Financial Statement Analysis
Available Study Resources on Quizplus for this Chatper
117 Verified Questions
117 Flashcards
Source URL: https://quizplus.com/quiz/66975
Sample Questions
Q1) Which of the following is a 'red flag' suggesting that a company may be in trouble?
A)A buildup of inventories
B)Cash flow from operations is higher than profit
C)An increase in dividend payout
D)A decline in days in inventory
Q2) In a vertical analysis of the income statement,each line item is shown as a percentage of profit.
A)True
B)False
Q3) The dividend payout ratio indicates the amount of the dividend as a proportion of a share's market price.
A)True
B)False
Q4) When comparing one company to another,what kind of information does the accounts receivable turnover provide?
A)How well each company manages the financing of its assets
B)How effective each company is at collecting cash from its credit customers
C)How profitable each company is based on the sale of its products
D)How much profit is generated by a share of each company
To view all questions and flashcards with answers, click on the resource link above. Page 20