Principles of Accounting Exam Bank
Course Introduction
Principles of Accounting introduces the fundamental concepts and practices of financial accounting, equipping students with the skills to record, classify, and interpret business transactions and financial statements. The course covers key topics such as the accounting cycle, accruals and deferrals, preparation of balance sheets, income statements, and cash flow statements, alongside ethical considerations and the regulatory environment of accounting. Emphasis is placed on developing analytical and problem-solving abilities to evaluate financial information and support effective business decision-making.
Recommended Textbook
Cornerstones of Financial Accounting 2nd Edition by Jay Rich
Available Study Resources on Quizplus
12 Chapters
1918 Verified Questions
1918 Flashcards
Source URL: https://quizplus.com/study-set/3782
Page 2
Chapter 1: Accounting and the Financial Statements
Available Study Resources on Quizplus for this Chatper
202 Verified Questions
202 Flashcards
Source URL: https://quizplus.com/quiz/75499
Sample Questions
Q1) What is unearned revenue?
A)Stockholders' equity
B)Liability
C)Asset
D)Revenue
Answer: B
Q2) Refer to Baloon-E-Tunes.Calculate the current ratio at December 31,2013.What does this ratio tell you about the "composition" of the current assets?
Answer: 11ed9713_7745_3364_b27d_4567af7806d5_TB2046_11
The current ratio does not provide information about the composition of the company's current assets and current liabilities.Only totals are used to calculate the current ratio.
Q3) ____________________ is a liquidity measure that is calculated by subtracting current assets from current liabilities.
Answer: Working capital
Q4) Net Income from the Income Statement increases ____________________.
Answer: retained earnings
To view all questions and flashcards with answers, click on the resource link above.
3
Chapter 2: The Accounting Information System
Available Study Resources on Quizplus for this Chatper
177 Verified Questions
177 Flashcards
Source URL: https://quizplus.com/quiz/75495
Sample Questions
Q1) Which of the following statements is true?
A)Only the effects of internal transactions must be recognized and recorded in the accounting system.
B)An internal transaction represents a business activity between an entity and its environment.
C)Evidence used to record transactions affecting a business entity comes from source documents.
D)Only the effects of external events must be recognized,measured,and recorded in an entity's accounting system.
Answer: C
Q2) A debit entry increases assets and revenue accounts.
A)True
B)False Answer: False
Q3) The ____________________ is the private sector group with authority to set accounting standards in the United States
Answer: Financial Accounting Standards Board or FASB
Q4) A revenue account has a normal ___________ balance. Answer: credit
To view all questions and flashcards with answers, click on the resource link above. Page 4
Chapter 3: Accrual Accounting
Available Study Resources on Quizplus for this Chatper
162 Verified Questions
162 Flashcards
Source URL: https://quizplus.com/quiz/75494
Sample Questions
Q1) Which one of the following is an example of a deferred revenue?
A)Sales are made to customers on credit.
B)Revenue has been earned but not yet recorded.
C)Payments are received prior to providing the services to customers.
D)Cash sales are made to customers.
Answer: C
Q2) ____________________ is the name given to balance sheet accounts because their balances are carried forward from the current accounting period to future accounting periods.
Answer: Permanent accounts
Q3) Adjusting entries are prepared using the accrual basis of accounting for preparing financial statements.
A)True
B)False
Answer: True
Q4) Dividends,like expenses,are closed to the income summary account during the end-of-period closing process.
A)True
B)False
Answer: False
Page 5
To view all questions and flashcards with answers, click on the resource link above.
Chapter 4: Internal Control and Cash
Available Study Resources on Quizplus for this Chatper
162 Verified Questions
162 Flashcards
Source URL: https://quizplus.com/quiz/75493
Sample Questions
Q1) Internal control over financial reporting is concerned with ensuring the reliability of the financial statements.
A)True
B)False
Q2) According to the Sarbanes-Oxley Act of 2002,who is primarily responsible for establishing and maintaining a system of internal control over the company's financial reporting?
A)Management of the company
B)The company's auditor's
C)The company's internal auditors
D)The audit committee of the company's board of directors
Q3) No special internal control procedures are necessary with a petty cash fund because the amount is so small.
A)True
B)False
Q4) Which of the following is an example of a debit memo?
A)Notice of a bank service charge
B)Notice of interest earned on a checking account
C)Outstanding checks
D)A company's transposition error in the recording of a deposit
Page 6
To view all questions and flashcards with answers, click on the resource link above.
Chapter 5: Sales and Receivables
Available Study Resources on Quizplus for this Chatper
134 Verified Questions
134 Flashcards
Source URL: https://quizplus.com/quiz/75492
Sample Questions
Q1) All of the following are true for a company that uses the allowance method of accounting for bad debts,EXCEPT:
A)It uses a contra-asset account called the allowance for doubtful accounts.
B)It records bad debt expense each time an account is determined to be uncollectible.
C)It reduces its accounts receivable balance when the account is written off.
D)It reports accounts receivable in the balance sheet at their net realizable value.
Q2) Alco Roofing Company's beginning accounts receivable were $200,000 and ending accounts receivable were $270,000.During the period,credit sales totaled $570,000,How much cash was collected from customers?
A)$470,000
B)$500,000
C)$570,000
D)$640,000
Q3) A(n)____________________ categorizes the various accounts receivable amounts by the length of time outstanding
Q4) Refer to Accutemp Heating & Air.How much total interest revenue will the company recognize over the term of the note?
To view all questions and flashcards with answers, click on the resource link above.
Chapter 6: Cost of Goods Sold and Inventory
Available Study Resources on Quizplus for this Chatper
191 Verified Questions
191 Flashcards
Source URL: https://quizplus.com/quiz/75491
Sample Questions
Q1) Parlato Corp.has an inventory turnover rate of 8 times.If its cost of goods sold is $150,000,then the company:
A)will report sales of $1,200,000.
B)will report gross margin of $1,200,000.
C)will have average inventory of $18,750.
D)sells its inventory 1,200 times per year.
Q2) Refer to the information presented for Tarpley & Underwood.What is the gross profit ratio?
Q3) What effects on a retail store's accounting equation occur when it records merchandise purchased for cash,assuming the use of a perpetual inventory system?
A)Assets and stockholders' equity increase.
B)Assets and stockholders' equity decrease.
C)Assets and liabilities increase.
D)No net effect.
Q4) The weighted average cost per unit must be continually updated under the perpetual inventory system.
A)True
B)False
Q5) Accountants define the market value of inventory as its
To view all questions and flashcards with answers, click on the resource link above. Page 8
Chapter 7: Operating Assets
Available Study Resources on Quizplus for this Chatper
133 Verified Questions
133 Flashcards
Source URL: https://quizplus.com/quiz/75490
Sample Questions
Q1) Refer to Falling Leaves Lawn Care.By what amount would double-declining-balance depreciation exceed straight-line depreciation over the 5-year life of the equipment?
A)The salvage value of $7,000.
B)Cost less total depreciation.
C)Cost plus total depreciation.
D)Total depreciation expenses under double-declining-balance and straight-line depreciation are equal.
Q2) Costs incurred related to plant assets that are already in use are called revenue expenditures if the cost increases the useful life or the asset's productivity.
A)True
B)False
Q3) Refer to Fabian Woodworks.If the company uses the straight-line method of depreciation,what is the book value at December 31,2014?
A)$ 8,000
B)$ 6,000
C)$10,000
D)$ 4,000
Q4) Distinguish between tangible and intangible operating assets.
To view all questions and flashcards with answers, click on the resource link above.
9
Chapter 8: Current and Contingent Liabilities
Available Study Resources on Quizplus for this Chatper
139 Verified Questions
139 Flashcards
Source URL: https://quizplus.com/quiz/75489
Sample Questions
Q1) When a company records the gross wages paid to its employees,the accounts to be credited include various taxes payable and ____________________
Q2) Refer to the information for Gainesville Truck Center.Which of the following statements is true regarding the entry to record wages and the related liabilities?
A)FICA tax expense will be debited in the amount of $765.
B)Social security tax payable will be debited in the amount of $620.
C)Medicare tax payable will be credited in the amount of $145.
D)Federal income taxes payable will be credited in the amount of $2,100.
Q3) On August 1,2012,Genuine Services accepted a $6,000 advance payment from a customer for services to be provided in the future.The contract requires the company to review operations at each of the customer's six locations over the next six months.What is the impact on the accounting equation of recording this transaction on August 1st?
A)Assets and liabilities increase.
B)Assets and liabilities decrease.
C)Liabilities decrease and stockholders' equity increases.
D)Liabilities increase and stockholders' equity decreases.
Q4) Why are unearned revenues considered current liabilities?
To view all questions and flashcards with answers, click on the resource link above. Page 10
Chapter 9: Long-Term Liabilities
Available Study Resources on Quizplus for this Chatper
119 Verified Questions
119 Flashcards
Source URL: https://quizplus.com/quiz/75488
Sample Questions
Q1) On the issuance date,the Bonds Payable account has a balance of $55,000,000 and Premium on Bonds Payable has a balance of $5,000,000.These bonds issued at
A)$50,000,000.
B)$55,000,000.
C)$60,000,000.
D)a price that cannot be determined without knowing the stated and market interest rates.
Q2) Long-term debt generally includes:
A)Obligations that will be satisfied within one year.
B)Accounts payable,because they are interest-bearing.
C)Obligations that extend beyond one year.
D)Accrued expenses.
Q3) If the yield rate of interest is greater then the stated rate,then the bonds are issued at a ____________________.
Q4) A bond's ____________________ is computed by taking the bond's face value,then either subtracting any unamortized discount or adding any unamortized premium.
Q5) The ____________________ rate of interest is a function of economic factors and the creditworthiness of the borrower
To view all questions and flashcards with answers, click on the resource link above. Page 11
Chapter 10: Stockholders Equity
Available Study Resources on Quizplus for this Chatper
182 Verified Questions
182 Flashcards
Source URL: https://quizplus.com/quiz/75498
Sample Questions
Q1) A corporation had several transactions affecting its stockholders' equity accounts during the year.In the space provided,show the impact on the accounting equation by placing a plus sign (+)for an increase,a minus sign (-)for a decrease,or N/A for no impact or no total net impact.
\(\begin{array}{|l|l|l|l|}
\hline && & \text { Sbckholders' } \\
\hline \text { Transactions: } &\text { Assets = } & \text { Liabilities }+ & \text { Equity } \\
\hline \text { Received authorization to issue 10,000 shares of \$ 5 par common stock }\\
\hline \text { Issued 5,000 shares of common stock for \$ 15 per share }\\
\hline \text { Declared and paid a 5 \% stock dividend when the }\\ \text { market price of the common stock was \$ 18 per share }\\
\hline \text { Declared a cash dividend of \$ 1 per share }\\
\hline \text { Issued additional shares in a 2-for-1 stock split }\\ \hline \end{array}\)
Q2) Par value is adjusted annually to reflect the current market value of the stock. A)True B)False
To view all questions and flashcards with answers, click on the resource link above.
Page 12
Chapter 11: The Statement of Cash Flows
Available Study Resources on Quizplus for this Chatper
165 Verified Questions
165 Flashcards
Source URL: https://quizplus.com/quiz/75497
Sample Questions
Q1) When using the direct method to determine operating cash flows,how is the payment of a cash dividend shown on the Statement of Cash Flows?
A)Operating activity
B)Investing activity
C)Financing activity
D)Noncash investing and financing activity
E)Not reported on the statement of cash flows
Q2) Which balance sheet accounts are most affected by investing activities?
A)Current assets and current liabilities.
B)Long-term assets.
C)Long-term liabilities.
D)Stockholders' equity.
Q3) To be classified as a cash equivalent,an item must be readily convertible to a known amount of cash and have an original maturity to the investor of three months or more.
A)True
B)False
Q4) The indirect method of preparing a statement of cash flows begins with net income and then adjusts it for noncash items to produce net cash flow from
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
152 Verified Questions
152 Flashcards
Source URL: https://quizplus.com/quiz/75496
Sample Questions
Q1) The analysis of common size financial statements may be included in a horizontal or vertical analysis.
A)True
B)False
Q2) Which of the following profitability ratios would be determined through a common size vertical analysis of the income statement?
A)gross profit percentage
B)return on assets
C)return on equity
D)earnings per share
Q3) What is meant by the concept of efficiency as it relates to turnover ratios? Explain.
Q4) Which of the following ratios is used to analyze a company's asset efficiency?
A)Return on assets
B)Inventory turnover ratio
C)Earnings per share
D)Debt-to-total assets ratio
Q5) ____________________ assets generally include cash,accounts receivable,and short-term investments.
To view all questions and flashcards with answers, click on the resource link above. Page 14