Survey of Accounting Test Bank
Course Introduction
Survey of Accounting provides a comprehensive introduction to the fundamental principles and concepts of financial and managerial accounting. This course covers the basics of preparing, interpreting, and analyzing financial statements, as well as the role of accounting information in decision-making processes. Students will gain an understanding of key topics such as the accounting cycle, internal controls, budgeting, and cost analysis. Designed for non-accounting majors or those seeking an overview without extensive technical detail, this course equips learners with essential knowledge for both personal financial literacy and professional business environments.
Recommended Textbook
Using Financial Accounting Information The Alternative to Debits and Credits 10th Edition by Gary
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14 Chapters
2617 Verified Questions
2617 Flashcards
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Page 2
Chapter 1: Accounting As a Form of Communication
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196 Verified Questions
196 Flashcards
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Sample Questions
Q1) A ____________ is the type of accounting used by nonbusiness entities.
Answer: Fund accounting
Q2) Which one of the following is an economic obligation for a business entity?
A)Salaries paid to employees for services rendered
B)Materials used in manufacturing products
C)Amounts owed to creditors
D)Payment of rent for the next year
Answer: C
Q3) Which of the following best describes the term "retained earnings"?
A)The amount of total profits earned by a business since it began operations
B)The amount of interest or claim that the owners have on the assets of the business
C)The future economic resources of a business entity
D)The cumulative profits earned by the business less any dividends distributed Answer: D
Q4) The Financial Accounting Standards Board defined the objectives of financial reporting.
A)True
B)False Answer: True
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Chapter 2: Financial Statements and the Annual Report
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206 Verified Questions
206 Flashcards
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Sample Questions
Q1) The concept of conservatism is the capacity of information to make a difference in a decision.
A)True
B)False
Answer: False
Q2) The purchase of inventory for cash will cause the current ratio to decrease.
A)True
B)False
Answer: False
Q3) What is the correct method for calculating working capital?
A)Total Assets - Total Liabilities
B)Current Assets - Total Liabilities
C)Current Assets - Current Liabilities
D)Current Assets + Current Liabilities
Answer: C
Q4) Current assets,other than cash,are expected to be sold or consumed beyond a company's normal operating cycle.
A)True
B)False
Answer: False
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Chapter 3: Processing Accounting Information
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180 Verified Questions
180 Flashcards
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Sample Questions
Q1) Which of the following statements is true?
A)Only the effects of internal transactions must be recognized and recorded in the entity's accounting system.
B)An internal event is a transaction between an entity and its environment.
C)Not all recognizable events are supported by a standard source document.
D)Only the effects of external events must be recognized,measured,and recorded in an entity's accounting system.
Answer: C
Q2) A trial balance is a(n)
A)optional financial statement used only by accountants.
B)financial statement that can be used in place of a balance sheet.
C)list of accounts.
D)document used to prove the equality of debits and credits in the general ledger. Answer: D
Q3) There is a universal chart of accounts that is applicable to all businesses.
A)True
B)False
Answer: False
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5
Chapter 4: Income Measurement and Accrual Accounting
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219 Verified Questions
219 Flashcards
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Sample Questions
Q1) The recognition of revenue may result from the settlement of a liability rather than from the acquisition of an asset.
A)True
B)False
Q2) When using a work sheet
A)an equal number of account titles are applicable to the Income Statement columns and the Balance Sheet columns.
B)adjusting entries are not made since they appear on the work sheet.
C)net income appears in both the Income Statement debit column and the Balance Sheet credit column.
D)the Income Statement column and Balance Sheet column of the work sheet eliminate the need to prepare formal financial statements.
Q3) Which one of the following adjustments will increase assets?
A)Interest incurred on money borrowed during the period but not yet paid to the bank is accrued.
B)Rent revenue is recorded for amounts owed by a tenant but not yet paid.
C)The use of supplies is recorded.
D)Depreciation for the period is recorded.
Q4) Why is the cash-basis of accounting too limited for proper financial reporting?
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Chapter 5: Inventories and Cost of Goods Sold
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222 Verified Questions
222 Flashcards
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Sample Questions
Q1) Refer to the data for Share,Inc. If the LIFO method is used,how much is cost of goods sold for May?
Q2) A company began the year with $150,000 in inventory and ended the year with $170,000 in inventory.Cost of goods sold for the year amounted to $960,000.Assuming 360 days in a year,how long,on average,does it take the company to sell its inventory (to the nearest day)?
A)6 days
B)60 days
C)120 days
D)3 days
Q3) The inventory turnover ratio is defined as cost of goods sold divided by average inventory.
A)True
B)False
Q4) Under the indirect method of preparing the statement of cash flows,a decrease in inventory is added to net income to determine cash flow from operating activities.
A)True
B)False
Q5) The cost of goods purchased is equal to net purchases plus __________.
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Chapter 6: Cash and Internal Control
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184 Verified Questions
184 Flashcards
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Sample Questions
Q1) Gentech Corp.prepared a bank reconciliation as of June 30,2017.The following items were identified: ?
\[\begin{array} { l r }
\text { Gentech's bank balance } & \$ 14,300 \\
\text { Deposits in transit } & 1,000 \\
\text { Outstanding checks } & 1,300 \\
\text { Bank service charge } & 50 \\
\text { Customer's NSF check returned by the bank } & 150 \end{array}\] Gentech's adjusted cash balance at June 30,2017 is
A)$13,800.
B)$14,100.
C)$14,000.
D)$14,300.
Q2) A bank informs a customer that a service charge has been assessed on its account by including a credit memorandum on the monthly bank statement.
A)True
B)False
Q3) Additions on a bank statement for such items as interest paid on the account and notes collected by the bank for the customer are called __________.
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Page 8
Chapter 7: Receivables and Investments
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192 Verified Questions
192 Flashcards
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Sample Questions
Q1) The gross accounts receivable less the allowance for doubtful accounts is known as the __________.
Q2) Sweetson Enterprises' comparative balance sheets included accounts receivable of $220,300 at December 31,2017,and $200,900 at December 31,2018.Sales reported on Sweetson's 2018 income statement amounted to $2,350,000.What is the amount of cash collections that Sweetson will report in the Operating Activities category of its 2018 statement of cash flows assuming that the direct method is used?
A)$2,369,400
B)$2,350,000
C)$2,771,200
D)$2,330,600
Q3) Because the allowance method results in better matching,accounting standards require its use rather than the direct write-off method,unless bad debts are immaterial.
A)True
B)False
Q4) The amount of cash the maker is to pay the payee on the maturity date of the note is called the __________.
Q5) The party that receives the payment due from a note is called the __________.
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Chapter 8: Operating Assets: Property, Plant, and Equipment, and Intangibles
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207 Verified Questions
207 Flashcards
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Sample Questions
Q1) Royal Company purchased a dump truck at the beginning of 2015 at a cost of $60,000.The truck had an estimated life of six years and an estimated residual value of $24,000.On January 1,2016,the company made major repairs of $20,000 to the truck that extended the life one year.Thus,starting with 2017,the truck has a remaining life of five years and a new salvage value of $8,000.Royal uses the straight-line depreciation method.What is the book value of the truck to be reported on the balance sheet at December 31,2017?
A)$44,000
B)$50,000
C)$56,000
D)$62,000
Q2) Lenders are interested in the value of operating assets as collateral when making lending decisions.
A)True
B)False
Q3) When plant assets are purchased in a group,each asset increases the respective plant asset account for its fair market value at the time of acquisition.
A)True
B)False
Page 10
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Chapter 9: Current Liabilities, Contingencies, and the Time Value of Money
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176 Verified Questions
176 Flashcards
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Sample Questions
Q1) Redfern Company has current assets of $150,000 and current liabilities of $60,000.How much inventory could it purchase on account and achieve its minimum desired current ratio of 2 to 1?
A)$10,000
B)$20,000
C)$30,000
D)$40,000
Q2) The landlord records the security deposit she collects from the tenant as a(n) A)asset.
B)liability.
C)contingent liability.
D)contra liability.
Q3) To determine whether a lottery winner would prefer to receive the money in a single lump sum immediately or receive an equal amount over a period of years,you would use which type of time value of money calculation?
A)The future value of a single amount
B)The present value of a single amount
C)The future value of an annuity
D)The present value of an annuity
Page 11
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Chapter 10: Long-Term Liabilities
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185 Verified Questions
185 Flashcards
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Sample Questions
Q1) The most obvious risk to bond investors is that a company will fail and be unable to pay its debts.
A)True
B)False
Q2) Stockton Corporation has made an accounting entry to record deferred taxes as a liability resulting from temporary differences between accounting income and taxable income.Which of the following statements is true?
A)Deferred tax will be decreased.
B)Stockholders' equity will be increased.
C)Stockholders' equity will be decreased.
D)Assets will be decreased.
Q3) Convertible bonds normally sell at a higher price than nonconvertible bonds.
A)True
B)False
Q4) Which of the following statements regarding serial bonds is true?
A)They are the most common type of bond issued.
B)They have shorter lives than term bonds.
C)They are always backed by the issuer's collateral.
D)The bonds do not all mature on the same date.
Q5) An alternate term for a timing difference is a __________.
Page 12
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Chapter 11: Stockholders Equity
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203 Verified Questions
203 Flashcards
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Sample Questions
Q1) None of the Stockholders' Equity accounts are affected by the stock split.
A)True
B)False
Q2) How is treasury stock shown on the balance sheet?
A)Treasury stock is not shown on the balance sheet.
B)Treasury stock is shown as an increase in stockholders' equity.
C)Treasury stock is shown as a decrease in stockholders' equity.
D)Treasury stock is shown as an asset.
Q3) Marvin's Shrimp Restaurant incorporated as a new business on January 1,2017.The company is authorized to issue 40,000 shares of $1 par value common stock and 10,000 shares of 4%,$5 par value,cumulative,participating preferred stock.On January 1,2017,the company issued 15,000 shares of common stock for $8 per share.Net income for the year ended December 31,2017,was $115,000.Cash dividends in the amount of $30,000 were declared,but only $25,000 were paid as of year-end.Prepare the Stockholders' Equity section of the balance sheet for Marvin's Shrimp Restaurant at December 31,2017.
Q4) When stock is issued for a noncash asset,the par value of the stock is the best indicator of the value of the asset.
A)True B)False
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Chapter 12: The Statement of Cash Flows
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192 Verified Questions
192 Flashcards
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Sample Questions
Q1) The primary purpose of the statement of cash flows is to provide information about
A)the financial position of the company.
B)the cash inflows and outflows of the company.
C)the investing and financing activities of the company.
D)the profitability of the company.
Q2) When using the direct method,how is the sale of long-term investments for cash reported on the statement of cash flows?
A)As an operating activity
B)As an investing activity
C)As a financing activity
D)As a noncash investing and financing activity
Q3) When using the direct method,how are salaries paid to employees reported on the statement of cash flows?
A)As an operating activity
B)As an investing activity
C)As a financing activity
D)As a noncash investing and financing activity
Q4) __________ activities involve long-term liabilities and stockholders' equity.
Q5) The purchase of merchandise is an important __________ activity for a retailer.
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Chapter 13: Financial Statement Analysis
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199 Verified Questions
199 Flashcards
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Sample Questions
Q1) One measure of a company's overall long-term financial health is the debt-to-equity ratio.
A)True
B)False
Q2) Use the Current Assets section of the balance sheets of Breeze Company as of June 30,2018 and 2017 presented below to answer the questions that follow.
\(\begin{array}{lrr}&2018&2017\\
\text { Cash and cash equival ents } & \$ 75,000 & \$ 58,800 \\
\text { Trade accounts receivable, net } & 157,500 & 193,200 \\
\text { Inventory } & 208,200 & 253,400 \\
\text { Other current assets } & 18,400 & 15,500 \\
\quad \text { Total current assets } & \$ 459,100 & \$ 520,900 \\
\text { Total assets } & \$ 2,650,000 & \$ 3,430,000 \end{array}\) Required
Complete a vertical analysis of the Current Assets section of Breeze Company's balance sheets for 2018 and 2017.Your answers should be rounded to one decimal place,
Q3) What is the best way to assess solvency? Explain.
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Chapter 14: International Financial Reporting Standards
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54 Verified Questions
54 Flashcards
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Sample Questions
Q1) When analyzing foreign statements,all of the following are accurate positions of noncurrent liabilities listings except
A)after total equity.
B)before current liabilities.
C)after share capital.
D)after current liabilities.
Q2) What is the name of the formalized commitment of the IASB and the FASB to converge U.S.and international accounting standards?
A)Sarbanes-Oxley Act
B)Norwalk Agreement
C)IFRS Foundation
D)Conceptual Framework
Q3) According to the text,in economies like those that made up the former Soviet Union,accounting standards are relatively less complex due to the fact that they are just beginning to be developed.
A)True
B)False
Q4) Explain some of the differences in accounting for operating assets that exist between U.S.GAAP and IFRS.
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