Survey of Accounting Exam Materials
Course Introduction
Survey of Accounting offers a broad overview of fundamental accounting concepts and practices, emphasizing their relevance in the decision-making processes of both individuals and organizations. The course introduces the basics of financial and managerial accounting, covering topics such as the accounting cycle, preparation and interpretation of financial statements, internal controls, and budgeting. Designed for non-accounting majors, this course highlights the role of accounting information in evaluating business performance, planning, and control, while providing a foundation for understanding key financial documents and their application in real-world scenarios.
Recommended Textbook
Fundamental Financial Accounting Concepts 10th Edition by Thomas P Edmonds
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13 Chapters
1246 Verified Questions
1246 Flashcards
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Page 2
Chapter 1: An Introduction to Accounting
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94 Verified Questions
94 Flashcards
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Sample Questions
Q1) In a market,a company that manufactures cars would be referred to as a conversion agent.
A)True
B)False
Answer: True
Q2) What is Yowell's net cash flow from operating activities?
A)Inflow of $6,000
B)Inflow of $9,000
C)Inflow of $18,000
D)Inflow of $30,000
Answer: B
Q3) Which of the following financial statements provides information about a company as of a specific point in time?
A)Income statement
B)Balance sheet
C)Statement of cash flows
D)Statement of changes in stockholders' equity
Answer: B
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Chapter 2: Accounting for Accruals and Deferrals
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92 Verified Questions
92 Flashcards
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Sample Questions
Q1) After the closing process,all income statement accounts have balances that carry forward into the next accounting period.
A)True
B)False
Answer: False
Q2) Adjusting entries never affect a business's cash account.
A)True
B)False Answer: True
Q3) The bankruptcies of Enron and WorldCom both indicated the occurrence of major audit failures.
A)True
B)False Answer: True
Q4) Two of the steps in the accounting cycle are adjusting the accounts and closing the accounts.
A)True
B)False Answer: True
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Chapter 3: The Double-Entry Accounting System
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106 Verified Questions
106 Flashcards
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Sample Questions
Q1) Which of the following statements about the entry to record depreciation is true?
A)The entry involves a credit to a liability.
B)The entry involves a credit to Depreciation Expense.
C)The entry involves a credit to the asset being depreciated.
D)The entry involves a credit to a contra-asset account.
Answer: D
Q2) The financial statement ratio that may be of greatest interest to a company's stockholders is the amount of its return-on-assets ratio.
A)True
B)False
Answer: False
Q3) A business's chart of accounts is prepared to verify the equality of debits and credits.
A)True
B)False
Answer: False
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Chapter 4: Accounting for Merchandising Businesses
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114 Verified Questions
114 Flashcards
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Sample Questions
Q1) Which of the following describes the purpose of a common size financial statement?
A)Compare the amount of common stock to other types of stock
B)Make comparisons between firms of different sizes
C)Make comparisons between different time periods
D)Make comparisons between firms of different sizes and between different time periods
Q2) Which of the following would be considered as primarily a merchandising business?
A)West Consulting
B)Martin's Supermarket
C)Sandridge and Associates Law Offices
D)KPM Accounting and Tax Service
Q3) With a perpetual inventory system,assets and stockholders' equity increase by the amount of the gross margin when inventory is sold.(Consider the effects of both parts of this event. )
A)True
B)False
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6
Chapter 5: Accounting for Inventories
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86 Verified Questions
86 Flashcards
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Sample Questions
Q1) A loss resulting from application of the lower-of-cost-or-market rule is included in cost of goods sold if the loss is material in amount.
A)True
B)False
Q2) Poole Company purchased two identical inventory items.One of the items,purchased in January,cost $4.50.The other,purchased in February,cost $4.75.One of the items was sold in March at a selling price of $7.50.Poole uses LIFO.Which of the following statements is true?
A)The balance in ending inventory would be $4.75.
B)The amount of gross margin would be $2.75.
C)The amount of ending inventory would be $4.625.
D)The amount of cost of goods sold would be $4.50.
Q3) During a period of declining prices,a company would report a lower gross margin using the FIFO cost flow method than with LIFO.
A)True
B)False
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Page 7
Chapter 6: Internal Control and Accounting for Cash
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82 Verified Questions
82 Flashcards
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Sample Questions
Q1) Typical adjustments to the unadjusted book balance on a bank reconciliation include bank service charges,customer NSF checks,and certified checks.
A)True
B)False
Q2) The Securities and Exchange Commission is authorized to establish and enforce the accounting rules for public companies.
A)True
B)False
Q3) How is a customer's NSF check reflected on a bank reconciliation?
A)Subtracted from the unadjusted book balance to get the true cash balance
B)Added to the unadjusted bank balance to get the true cash balance
C)Subtracted from the unadjusted bank balance to get the true cash balance
D)Added to the unadjusted book balance to get the true cash balance
Q4) Which of the following describes an activity that increases a company's bank account balance?
A)Credit memo
B)Debit memo
C)Balance sheet
D)Certified check
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Chapter 7: Accounting for Receivables
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83 Verified Questions
83 Flashcards
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Sample Questions
Q1) Which accounting concept can be used by some companies to justify the use of the direct write-off method?
A)The entity concept
B)The materiality concept
C)The going concern concept
D)The monetary principle
Q2) Which of the following businesses would most likely have the longest operating cycle?
A)A chain of coffee shops
B)A national sporting goods chain
C)An antiques dealer
D)A Christmas tree farm
Q3) The net realizable value of accounts receivable is the amount of receivables a company expects to collect.
A)True
B)False
Q4) The collection of an account receivable is an asset source transaction.
A)True
B)False
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Chapter 8: Accounting for Long-Term Operational Assets
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110 Verified Questions
110 Flashcards
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Sample Questions
Q1) Which method of depreciation is used by most U.S.companies for financial reporting purposes?
A)Straight-line
B)Units-of-production
C)Double-declining-balance
D)MACRS
Q2) Which of the following intangible assets does not convey a specific legal right or privilege?
A)Copyrights
B)Franchises
C)Goodwill
D)Trademarks
Q3) Which of the following would most likely not be expensed using the straight-line method?
A)A copyright
B)A building
C)A timber reserve
D)A patent
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Chapter 9: Accounting for Current Liabilities and Payroll
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86 Verified Questions
86 Flashcards
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Sample Questions
Q1) A company's classified balance sheet shows current assets of $8,650 and current liabilities of $6,000.What is the company's current ratio?
A)0.69 to 1
B)1.44 to 1
C)1.16 to 1
D)3.26 to 1
Q2) Indicate whether each of the following statements is true or false.
________ a)The extension of a warranty on goods sold normally represents a legal obligation to the seller of the goods.
________ b)The entry to recognize the warranty obligation increases the Warranties Payable account and decreases a revenue account.
________ c)The entry to record the payment of cash to settle a warranty claim increases expenses (Warranties Expense)and decreases liabilities (Warranties Payable).
________ d)Net income is not affected by the entry to record the payment of cash to settle a warranty claim.
________ e)Total assets are not affected by the adjusting entry to record the warranty obligation.
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Chapter 10: Accounting for Long-Term Debt
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105 Verified Questions
105 Flashcards
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Sample Questions
Q1) On January 1,Year 1,Jack Incorporated borrows $38,000 to purchase a new company car by agreeing to a 6%,5-year note with the bank.Payments of $734.65 are due at the end of each month with the first installment due on January 31,Year 1.What are the amounts of interest and principal,respectively,that will be paid in the first month?
A)$544.65 and $190.00
B)$190.00 and $544.65
C)$2,280.00 and $544.65
D)$190.00 and $734.65
Q2) What is the amount of interest expense appearing on the income statement for the year ending December 31,Year 3?
A)$17,500
B)$12,500
C)$14,250
D)$15,000
Q3) The after-tax interest cost of debt equals total interest expense multiplied by the tax rate.
A)True
B)False
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12
Chapter 11: Proprietorships,partnerships,and Corporations
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92 Verified Questions
92 Flashcards
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Sample Questions
Q1) On June 10,Year 1,Burton Builders,Inc. ,a publicly traded company,announced that it had been awarded a contract to build a football stadium at a contract price of $500 million.This contract would increase its projected revenues by 20% over the next three years.Which of the following statements is correct with regard to this announcement?
A)The market price of Burton's stock will probably be higher on June 11,Year 1 than on June 10th.
B)Burton's net cash flow from operations will increase by 20% over the next three years.
C)Burton's assets should be increased by $500 million on June 10,Year 1 to recognize this contract.
D)Burton's net income will increase by 20% over the next three years.
Q2) Which of the following statements about types of business entities is true?
A)For accounting purposes,a sole proprietorship is not a separate entity from its owner.
B)Ownership in a partnership is represented by having shares of capital stock.
C)One advantage of the corporation form is the ability to raise capital.
D)Sole proprietorships are subject to double taxation.
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Chapter 12: Statement of Cash Flows
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88 Verified Questions
88 Flashcards
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Sample Questions
Q1) Belvedere Corporation had a balance in its Equipment account on January 1,Year 1 of $320,000.During the year,equipment originally costing $85,000 and having Accumulated Depreciation of $20,000 was sold for $67,000.The ending balance of the Equipment Account was $275,000.How much did the company spend to purchase additional equipment during Year 1?
A)$40,000
B)$25,000
C)$90,000
D)$92,000
Q2) What was the cash received from customers during the year?
A)$296,000
B)$264,000
C)$280,000
D)$248,000
Q3) The amount of increase in accounts receivable is added to credit sales to calculate the amount of cash inflow from customers when using the direct method to prepare the operating activities section of the statement of cash flows.
A)True
B)False
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Page 14
Chapter 13: Financial Statement Analysis
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108 Verified Questions
108 Flashcards
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Sample Questions
Q1) Grove Corporation had sales of $3,000,000,cost of sales of $2,250,000,and average inventory of $500,000.What was Grove's inventory turnover ratio for the period?
A)1.6 times
B)6 times
C)4.5 times
D)23 times
Q2) Benson Company received cash of $5,000,000 by issuing 20-year bonds payable.As a result of this transaction,the company's current ratio will:
A)Remain the same.
B)Increase.
C)Decrease.
D)Cannot be determined.
Q3) The drawback of studying absolute amounts reported in financial statements is the problem of differing materiality levels.
A)True
B)False
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