Principles of Accounting Test Preparation
Course Introduction
Principles of Accounting introduces students to the foundational concepts and practices that underpin financial and managerial accounting. This course covers essential topics such as the accounting cycle, financial statement preparation, and the use of accounting information for decision-making. Students gain an understanding of the principles governing the measurement, recording, and reporting of business transactions, as well as the ethical standards and regulatory framework that guide the profession. Through practical exercises and real-world examples, participants develop the analytical skills required to interpret financial data and support effective business management.
Recommended Textbook
Financial Accounting 4th Edition by Robert Kemp
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12 Chapters
1893 Verified Questions
1893 Flashcards
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Page 2
Chapter 1: Business, Accounting, and You
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159 Verified Questions
159 Flashcards
Source URL: https://quizplus.com/quiz/29548
Sample Questions
Q1) The Statement of Retained Earnings is prepared to determine the final amount of Retained Earnings shown on the Balance Sheet.
A)True
B)False
Answer: True
Q2) The Statement of Retained Earnings is used to report:
A)accumulated dividends paid out to shareholders.
B)accumulated net profits not paid out in dividends.
C)beginning and ending cash balances.
D)beginning and ending revenues for the period.
Answer: B
Q3) Which of the following does NOT describe Stockholders' Equity?
A)Profits retained in the business
B)Money lent to a business
C)The owners' claim on the assets of a company
D)Money invested in a business by its owners
Answer: B
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Chapter 2: Analyzing and Recording Business Transactions
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152 Verified Questions
152 Flashcards
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Sample Questions
Q1) Which is NOT a part of Stockholders' Equity?
A)Revenues
B)Expenses
C)Accounts Receivable
D)Dividends
Answer: C
Q2) The ___________ account tracks a company's cumulative earnings less dividends.
A)Retained Earnings
B)Cash
C)Common Stock
D)Revenues
Answer: A
Q3) The general journal was developed to organize transactions by account.
A)True
B)False
Answer: False
Q4) The general journal is used to record the events (transactions)of a business.
A)True
B)False
Answer: True
Page 4
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Chapter 3: Adjusting and Closing Entries
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155 Verified Questions
155 Flashcards
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Sample Questions
Q1) The adjusted trial balance shows:
A)accounts that may still be out of balance.
B)revenues and expense amounts only.
C)numbers ready to be transferred to the financial statements.
D)assets, liabilities and Stockholders' Equity amounts only.
Answer: C
Q2) GAAP requires the use of accrual accounting.
A)True
B)False
Answer: True
Q3) Which of the following accounts would NOT be debited or credited in an adjusting entry?
A)Supplies Expense
B)Office Equipment
C)Wages Expense
D)Wages Payable
Answer: B
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Chapter 4: Accounting for a Merchandising Business
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158 Verified Questions
158 Flashcards
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Sample Questions
Q1) Which of the following accounts is NOT used to account for merchandise sales transactions?
A)Accounts Payable
B)Accounts Receivable
C)Sales Discounts
D)Sales Returns and Allowances
Q2) The accounting principle that relates to the expensing of freight charges is:
A)the cost principle.
B)the reliability principle.
C)the matching principle.
D)none of the above.
Q3) Discounts allowed for customers who pay their invoices early:
A)reduce the cost of the purchased inventory.
B)increase the cost of the purchased inventory.
C)are called manufacturers' discounts.
D)are called allowances.
Q4) A journal entry that has more than one debit or more than one credit is known as a complex journal entry.
A)True
B)False
Page 6
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Chapter 5: Inventory
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155 Verified Questions
155 Flashcards
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Sample Questions
Q1) Inventory turnover measures the amount of times a company turns over its beginning inventory during a period.
A)True
B)False
Q2) If Period 1 ending inventory is understated, then:
A)both cost of goods sold and net income are understated in Period 1.
B)cost of goods sold is overstated and net income is understated in Period 1.
C)cost of goods sold is understated and net income is overstated in Period 1.
D)both cost of goods sold and net income are overstated in Period 1.
Q3) A company using the perpetual inventory system does not need to perform a physical count of inventory.
A)True
B)False
Q4) In which case will the journal entries relating to inventory differ based on the chosen costing method?
A)When inventory is purchased on account.
B)When inventory is purchased for cash.
C)When inventory is sold - the revenue entry will differ.
D)When inventory is sold - the inventory entry will differ.
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Chapter 6: The Challenges of Accounting: Standards,
Internal Control, Audits, Fraud, and Ethics
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145 Verified Questions
145 Flashcards
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Sample Questions
Q1) An audit trail:
A)requires employees to take an annual vacation.
B)limits the number of employees who have access to company assets.
C)consists of business documents and records that provide evidence of transactions.
D)requires the use of security cameras and alarm systems.
Q2) When an employee overbills the company for business related expenses, this is an example of a disbursement scheme.
A)True
B)False
Q3) The Sarbanes-Oxley Act only applies to publicly traded companies.
A)True
B)False
Q4) The audit opinion issued when there are material misstatements in the financial statements is the:
A)disclaimer of opinion.
B)qualified opinion.
C)adverse opinion.
D)unqualified opinion.
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Chapter 7: Cash and Receivables
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165 Verified Questions
165 Flashcards
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Sample Questions
Q1) An example of good internal control over Accounts Receivable is:
A)the employee who handles the daily cash receipts also records Accounts Receivable transactions.
B)the employee who opens the mail is also in charge of recording Accounts Receivable.
C)there are separate employees for cash-handling and cash-accounting duties.
D)All of the above are examples of good internal controls.
Q2) GAAP generally allows the direct write-off method for accounting for bad debts.
A)True
B)False
Q3) If a company has n/120-credit terms, you would expect its Accounts Receivable turnover to be:
A)3
B)6
C)10
D)12
Q4) Accounts Receivable are more formal and usually longer in terms than notes receivable.
A)True
B)False
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Chapter 8: Long-Term and Other Assets
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171 Verified Questions
171 Flashcards
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Sample Questions
Q1) Equipment, buildings, and vehicles are:
A)amortized.
B)depleted.
C)depreciated.
D)expensed.
Q2) For which kind of marketable securities are any unrealized gains and losses shown on the income statement?
A)Trading securities
B)Available-for sale securities
C)Held-to-maturity securities
D)Trading and held-to-maturity securities
Q3) When a company pays a single price for a group of assets, the purchase is referred to as a basket purchase.
A)True
B)False
Q4) Increases in the value of a security while the company still owns it are considered realized gains.
A)True
B)False
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Chapter 9: Current Liabilities and Long-Term Debt
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171 Verified Questions
171 Flashcards
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Sample Questions
Q1) For a liability to exist:
A)a past transaction or event must have occurred.
B)the exact amount must be known.
C)the identity of the party must be known.
D)an obligation to pay cash in the future must exist.
Q2) Kat's wages for December are $8,500. At the end of November, her cumulative gross earnings were $112,000. How much will her employer take out for the OASDI portion of social security for December? (Round your final answer to the nearest dollar.)
A)$403
B)$497
C)$527
D)$650
Q3) Both the formulas for current ratio and debt ratio use current liabilities in the computation.
A)True
B)False
Q4) Unearned revenues are typically classified as current liabilities.
A)True
B)False
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Chapter 10: Corporations: Paid-In Capital and Retained Earnings
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165 Verified Questions
165 Flashcards
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Sample Questions
Q1) Which of the following dates do NOT require a journal entry?
A)Date of payment
B)Date of record
C)Date of declaration
D)All dividend dates require a journal entry.
Q2) Which is NOT a value placed on a certificate for a share of the company's stock?
A)Par
B)Stated value
C)No par
D)Market value
Q3) A stock split is recorded as a(n):
A)regular journal entry.
B)memorandum entry.
C)adjusting entry.
D)closing entry.
Q4) One disadvantage to the corporate form of organization is:
A)government regulations.
B)limited liability.
C)transfer of ownership policies.
D)ability to raise capital.
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Chapter 11: The Statement of Cash Flows
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135 Verified Questions
135 Flashcards
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Sample Questions
Q1) Which would NOT be subtracted from net income in the operating section of an indirect cash flow statement?
A)An increase in Prepaid Rent
B)An increase in Accounts Payable
C)A decrease in Salary Payable
D)An increase in Accounts Receivable
Q2) In order to prepare a Statement of Cash Flows using the indirect method, you only need the Income Statement.
A)True
B)False
Q3) A company issues common stock to settle a debt, this would be classified as a(n):
A)noncash investing and financing activity.
B)investing activity.
C)operating activity.
D)financing activity.
Q4) The difference between the direct and indirect methods is the format of the financing section.
A)True
B)False
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Chapter 12: Financial Statement Analysis
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162 Verified Questions
162 Flashcards
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Sample Questions
Q1) Inventory and prepaid expenses are NOT included in the computation of the: A)quick ratio.
B)current ratio.
C)debt ratio.
D)working capital ratio.
Q2) Which of the following statements is TRUE regarding the results of financial statement analysis?
A)They can be found in the management discussion and analysis section of the financial statements.
B)They are most meaningful when compared to competitors in diverse industries.
C)They identify whether or not fraud has taken place.
D)They have limited value without a point of reference.
Q3) After income from continuing operations, the next section on an Income Statement is:
A)earnings per share data.
B)discontinued operations.
C)continuing operations.
D)other income (expense).
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