Principles of Accounting
Final Test Solutions
Course Introduction
Principles of Accounting introduces students to the foundational concepts and practices of financial and managerial accounting. The course covers essential topics such as the accounting cycle, preparation and analysis of financial statements, double-entry bookkeeping, and the role of accounting in business decision-making. Emphasis is placed on understanding Generally Accepted Accounting Principles (GAAP), ethical considerations, and the interpretation of accounting data for both internal and external stakeholders. Students will gain practical skills in recording, summarizing, and reporting financial transactions, preparing them for further studies in accounting and related business disciplines.
Recommended Textbook
Cornerstones of Financial Accounting 1st Canadian Edition by Jay Rich
Available Study Resources on Quizplus
12 Chapters
2327 Verified Questions
2327 Flashcards
Source URL: https://quizplus.com/study-set/3481
Page 2
Chapter 1: Accounting and the Financial Statements
Available Study Resources on Quizplus for this Chatper
249 Verified Questions
249 Flashcards
Source URL: https://quizplus.com/quiz/69169
Sample Questions
Q1) Current assets minus current liabilities is called ____________________. Answer: working capital
Q2) Refer to the figure Been There Used Furniture.Which of the following can be said about its dividends for the year?
A) They increased the amount of capital shares reported by the company.
B) They were part of the company's operating expense.
C) They were reported on the statement of retained earnings.
D) They were reported on the income statement.
Answer: C
Q3) obligations that must be satisfied within a year
A)current assets
B)current liabilities
C)gross margin
D)income from operations
E)intangible assets
F)long-term investments
G)long-term liabilities
H)net profit margin
Answer: B
To view all questions and flashcards with answers, click on the resource link above.
Page 3
Chapter 2: The Accounting Information System
Available Study Resources on Quizplus for this Chatper
246 Verified Questions
246 Flashcards
Source URL: https://quizplus.com/quiz/69168
Sample Questions
Q1) Which of the following accounts does NOT have a normal debit balance?
A) accounts receivable
B) dividends
C) supplies expense
D) service revenue
Answer: D
Q2) Borrowing from the bank in order to acquire computer equipment for $1,500 has the effect of increasing both assets and ____________________.
Answer: liabilities
Q3) The general ledger is often used for the initial recording of repetitive transactions.
A)True
B)False
Answer: False
Q4) The purchase of office supplies from a supplier is an example of an external event.
A)True
B)False
Answer: True
To view all questions and flashcards with answers, click on the resource link above.
4
Chapter 3: Accrual Accounting
Available Study Resources on Quizplus for this Chatper
208 Verified Questions
208 Flashcards
Source URL: https://quizplus.com/quiz/69167
Sample Questions
Q1) Which of these adjusting entries involves the cash account?
A) deferred revenues
B) accrued expenses
C) deferred liabilities
D) adjusting entries do not involve the cash account
Answer: D
Q2) Which of the following is a characteristic of the worksheet?
A) Worksheets do not facilitate the preparation of financial statements.
B) The income summary account is used to determine net income for the period.
C) Only one trial balance appears on the worksheet.
D) The income statement section precedes the retained earnings statement section.
Answer: D
Q3) The employee salaries have been incurred but not paid at the end of the accounting period.
A)deferred (prepaid) expense
B)deferred (unearned) revenue
C)accrued expense
D)accrued revenue
Answer: C
To view all questions and flashcards with answers, click on the resource link above.
Page 5
Chapter 2: Internal Control and Cash
Available Study Resources on Quizplus for this Chatper
205 Verified Questions
205 Flashcards
Source URL: https://quizplus.com/quiz/69166
Sample Questions
Q1) An effective system of internal control is critical to protecting a company's investment in cash.Identify the five control activities and provide one example that relates to each control as it would be applied to cash.
Q2) Which of the following is the only essential element of internal control?
A) computerized accounting systems
B) an outsourced internal audit function
C) procedures for proper authorization of transactions
D) verification by government agencies
Q3) You are an entrepreneur about to open a coffee and internet cafe near your college campus.You have decided to accept cash and credit and will use college student employees.While you plan to be at the shop during most hours that the business will be open,you have made one of the student employees your assistant manager to manage in your absence.
Describe at least five procedures that you might use to provide adequate internal control over cash and credit sales and bank deposits.
Q4) When there is proper segregation of duties,the likelihood of fraud is reduced so that an employee attempting to carry out a fraudulent scheme would have to work in ____________________ with another employee.
To view all questions and flashcards with answers, click on the resource link above.
Page 6
Chapter 5: Revenue and Receivables
Available Study Resources on Quizplus for this Chatper
162 Verified Questions
162 Flashcards
Source URL: https://quizplus.com/quiz/69165
Sample Questions
Q1) Refer to Atlantis Tropicals.Determine the effect on the company's accounting equation of the year-end adjustment of bad debts using the aging approach.
\[\begin{array} { | l | l | l | }
\hline \text { Assets } & \text { = Liabilities } & \text { + shareholders' Equity } \\
\hline & & \\
& & \\
\hline
\end{array}\]
Q2) the amount of sales expected to be collectible after deducting discounts and returns and allowances
A)bad debt expense
B)net sales revenue
C)nontrade receivables
D)percentage of credit sales
E)profitability ratios
F)trade receivables
Q3) The amount of money borrowed when a promissory note is issued is called the
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
234 Verified Questions
234 Flashcards
Source URL: https://quizplus.com/quiz/69164
Sample Questions
Q1) Refer to the information provided for Robey Company.If the company uses the FIFO method,determine the following amounts:
A)ending inventory on February 28th
B)cost of goods sold for the month of February
Q2) Refer to the information presented for White Appliances.Prepare all of the company's journal entries for August assuming the use of a perpetual inventory system.
Q3) Refer to the information provided for Robey Company.If the moving average cost method is used,determine the following amounts:
A)cost of Goods sold for the month of February
B)ending inventory on February 28th
Q4) Refer to the information provided in the figure Tedder Co.If the company uses the weighted average method of inventory costing,how much is cost of goods sold for January?
A) $230
B) $232
C) $240
D) $250
Q5) Shipping terms of ____________________ mean that the buyer pays shipping costs.
To view all questions and flashcards with answers, click on the resource link above. Page 8
Chapter 7: Property plant and Equipment Intangibles and Natural Resources
Available Study Resources on Quizplus for this Chatper
183 Verified Questions
183 Flashcards
Source URL: https://quizplus.com/quiz/69163
Sample Questions
Q1) On January 1,Year 1,a company sold a machine that it had used for several years for $5,000.The machine originally cost $11,000 and had accumulated depreciation of $4,500 at the time of sale.What gain or loss will be reported on the income statement for the sale of the machine?
A) gain of $5,000
B) loss of $6,500
C) loss of $1,500
D) gain of $1,500
Q2) costs to pave a parking lot
A) Land
B) Land Improvements
C) Buildings
D) Machinery and Equipment
E) Expense Account
Q3) An accumulated ________ account is used when writing off natural resources.
Q4) What is the effect of recording depreciation for the year?
A) a decrease in both assets and net income
B) a decrease in assets but no change in owners' equity
C) an increase in both assets and net income
D) a decrease in net income but no change in assets
To view all questions and flashcards with answers, click on the resource link above. Page 9
Chapter 8: Current Liabilities
Available Study Resources on Quizplus for this Chatper
184 Verified Questions
184 Flashcards
Source URL: https://quizplus.com/quiz/69162
Sample Questions
Q1) Which of the following is an example of a current liability?
A) bonds payable
B) mortgages payable
C) accounts payable
D) notes payable, due in two years
Q2) On April 1,Year 1,Guyton Sails accepted a $12,000 advance payment for maintaining a customer's fleet of sailboats.The contract is for 12 months.In May Year 1,the company performed $1,200 worth of repairs.What is the remaining liability that will appear on the company's balance sheet at the end of May?
A) $1,200
B) $10,000
C) $10,800
D) $12,000
Q3) An example of a current liability is the current maturity of a long-term debt.
A)True
B)False
Q4) The operating cash flow ratio is computed by dividing cash flows from operating activities by ____________.
Q5) 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
159 Verified Questions
159 Flashcards
Source URL: https://quizplus.com/quiz/69161
Sample Questions
Q1) Keller Company issued $1,000,000,8%,seven-year bonds with interest payable semiannually when the yield rate was 8%.How much were the bonds issued at?
A) $887,037
B) $1,000,000
C) $1,112,963
D) $1,700,000
Q2) When a bond is issued at a discount,the amortization of the bond interest increases each year using the straight line method.
A)True
B)False
Q3) The amount of money the borrower agrees to repay at maturity is usually referred to as the ____________________.
Q4) ____________________ bonds may be retired by the issuing company before their specified due date.
Q5) A significant disadvantage of financing with debt rather than shares is the fact that the interest expense on debt is not tax-deductible.
A)True
B)False
To view all questions and flashcards with answers, click on the resource link above. Page 11
Chapter 11: The Statement of Cash Flows
Available Study Resources on Quizplus for this Chatper
206 Verified Questions
206 Flashcards
Source URL: https://quizplus.com/quiz/69160
Sample Questions
Q1) During Year 2,the operations of a shipping company provided net cash flows of $600,000.The company made capital expenditures of $270,000 and paid dividends of $130,000.
A) Compute the company's free cash flow.
B) Compute the compary's cash flow adequacy ratio assuming the average maturity value of its long-term debt over the next five years is \(\$ 650,000\).
Q2) During the current year,the accounts payable balance decreased.What does this indicate?
A) Payments on account were less than credit purchases during the period.
B) This decrease is added to net income in the operating activities section of a statement of cash flows prepared under the direct method.
C) This decrease is deducted from net income in the operating activities section of a statement of cash flows prepared under the direct method.
D) Payments on account exceeded credit purchases during the period.
Q3) Refer to Mary Kay Cosmetics.Prepare the investing activities section of the company's statement of cash flows for Year 2.
To view all questions and flashcards with answers, click on the resource link above.
Page 12
Chapter 12: Investments
Available Study Resources on Quizplus for this Chatper
66 Verified Questions
66 Flashcards
Source URL: https://quizplus.com/quiz/69159
Sample Questions
Q1) If the investor holds more than 50% of the common shares of the investee,then the two corporations are no longer separate accounting entities and therefore must prepare ____________________ financial statements,which combine information about the two corporations as if they were a single company.
Q2) If the investor holds more than 50% of the common shares of the investee,then the investor is referred to as the ____________________ and the investee is referred to as the ____________________.
Q3) Minority (or noncontrolling)interest is any voting stock not held by the parent.
A)True
B)False
Q4) What is the practice of adjusting the market value of securities that are accounted for using the fair value method referred to as?
A) consolidation
B) marking to market
C) passive investing
D) segregation of investments
Q5) A business combination is recorded at the cost of acquisition,without regard to the seller's ____________________ value.
To view all questions and flashcards with answers, click on the resource link above. Page 13
Chapter 13: Financial Statement Analysis
Available Study Resources on Quizplus for this Chatper
225 Verified Questions
225 Flashcards
Source URL: https://quizplus.com/quiz/69158
Sample Questions
Q1) Companies are required to produce a report to announce major events that are important to investors and creditors.
A)True
B)False
Q2) Various financial ratios,including return ratios,are categorized as ____________________ ratios.
Q3) A company that is considering selling goods or providing services to another company wants to know whether its customer will provide: competitive salary and benefits; experiences that will prepare employees to assume increased responsibility; and a secure job for the foreseeable future.
A)True
B)False
Q4) Refer to the figure Rags to Riches.Which of the following would be found through ratio analysis of the company's financial statements?
A) The accounts receivable turnover ratio is 7.76 in Year 2.
B) Cost of goods sold increased $50,000 or 23.8% in Year 2.
C) Accounts receivable increased $22,000 during Year 2.
D) Total assets decreased 18.4% during Year 2.
Q5) For what purpose is horizontal analysis used by financial analysts?
To view all questions and flashcards with answers, click on the resource link above. Page 14