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accounting mcq assignment_part_1




Question;Assignment Part 1QuestionWhich of the following is not a;step in the accounting process?;Verification;Recording;Communication;Identification;QuestionWhich of the following statements about;users of accounting information isincorrect?;Regulatory;authorities are internal users.;Present;creditors are external users.;Management;is an internal user.;Taxing;authorities are external users.;QuestionThe first step in solving an ethical;dilemma is to;identify;and analyze the principal elements in the situation.;recognize;an ethical situation and the ethical issues involved.;weigh the;impact of each alternative on various stakeholders.;identify the alternatives.;QuestionThe historical cost principle states;that;assets should be initially recorded at cost and adjusted;when the fair value changes.;only transaction data capable of being expressed in terms;of money be included in the accounting records.;activities of an entity are to be kept separate and;distinct from its owner.;assets should be recorded at their cost.;QuestionWhich of the following statements about;basic assumptions is correct?;The economic entity assumption states that there should be;a particular unit of accountability.;The monetary unit assumption enables accounting to measure;employee morale.;Partnerships are not economic entities.;Basic assumptions are the same as accounting principles.;QuestionLiabilities of a company would not;include;accounts payable.;accounts receivable.;salaries and wages payable.;notes payable.;QuestionPerforming services on account will;increase assets and decrease owner?s equity.;increase assets and increase liabilities.;increase liabilities and increase owner?s equity.;increase assets and increase owner?s equity.;QuestionAll of the following descriptions about;an account are true except;An account may be part of a manual or a computerized accounting;system.;An account is a source document.;An account has a title.;An account has a debit and credit side.;QuestionWhen a company earns revenues, owner's;equity increases.;True;False;QuestionThe first step in the recording process;is to;enter in a journal.;prepare a trial balance.;prepare the financial statements.;analyze each transaction for its effect on the accounts.;QuestionAn entry that requires more than two;accounts is a compound entry.;True;False;QuestionManagement could determine the amounts;due from customers by examining;which ledger account?;Supplies;Accounts Payable;Service Revenue;Accounts Receivable;QuestionPosting;is accomplished by examining ledger accounts and seeing;which ones need updating.;involves transferring all debits and credits on a journal;page to the trial balance.;accumulates the effects of journalized transactions in the;individual accounts.;QuestionA trial balance would only help in;detecting which one of the following errors?;A transaction that is not journalized.;Offsetting errors made in recording the transaction.;A transposition error when transferring the debit side of;the journal entry to the ledger.;A journal entry that is posted twice.;QuestionWhich of the;following time periods would not be referred to as an interim period?;quarterly;monthly;annually;semi-annually;QuestionThe revenue;recognition principle dictates that revenue should be recognized in the;accounting records;when;services are performed.;when;cash is received.;at;the end of the month.;in;the period that income taxes are paid.;QuestionAn adjusting entry;always affects;an;expense account and a revenue account.;an;asset account and a revenue account.;an;asset account and a liability account.;an;income statement account and a balance sheet account.;QuestionAccumulated Depreciation is;an asset account.;True;False;QuestionClark Real Estate;signed a four-month note payable in the amount of $8,000 on September 1. The;note requires interest at an annual rate of 12%. The amount of interest to be;accrued at the end of September is;$960.;$80.;$107.;$320.;QuestionThe adjusted trial;balance is prepared;after;the financial statements are prepared.;after;the balance sheet is prepared.;after;the adjusting entries are prepared and posted to the ledger.;to;prove no errors have been made during the accounting period.;QuestionIf a company;initially records the purchase of supplies to the Supplies Expense account, the;amount of the adjusting entry made at the end of an accounting period will be;equal to;the;supplies on hand at the end of the period.;the;supplies used during the period.;the;supplies purchased during the period.;the;supplies not paid for by the end of the period.;QuestionCompanies journalize the adjustments;after they complete the worksheet but before preparing the financial;statements.;True;False;QuestionThe Owner?s Drawings account is closed;through the Income Summary account.;True;False;QuestionThe purpose of the post-closing trial;balance is to;prove that no mistakes were made.;prove the equality of the balance sheet account balances;that are carried forward into the next accounting period.;list all the balance sheet accounts in alphabetical order;for easy reference.;prove the equality of the income statement account;balances that are carried forward into the next accounting period.;QuestionWhich of the following steps in the;accounting cycle may be performed more frequently than annually?;journalize closing entries;post closing entries;prepare a trial balance;prepare a post-closing trial balance;QuestionCorrecting entries;affect income statement accounts only.;affect balance sheet accounts only.;may involve any combination of accounts in need of;correction.;always affect at least one balance sheet account and one;income statement account.;QuestionCurrent liabilities are obligations;that are reasonably expected to be paid from existing current assets or through;the creation of other current liabilities.;True;False;QuestionUse of reversing entries;simplifies the recording of subsequent transactions.;is a required step in the accounting cycle.;is required for all adjusting entries.;changes the amount reported in the financial statements.;QuestionIn a perpetual inventory system, a;company determines the cost of goods sold each time a sale occurs.;True;False;QuestionStine Company purchased merchandise;with an invoice price of $2,000 and credit terms of 1/10, n/30. Assuming a 365;day year, what is the implied annual interest rate inherent in the credit;terms?;10%;36%;12%;18.25%;QuestionIn a perpetual inventory system, the;Cost of Goods Sold account is used;only when a cash sale of merchandise occurs.;only when a credit sale of merchandise occurs.;only when a sale of merchandise occurs.;whenever there is a sale of merchandise or a return of;merchandise sold.;QuestionIn preparing closing entries for a;merchandiser, the Income Summary account will be credited for the balance of;Sales Discounts.;Freight-Out.;Sales Revenue.;Inventory.;QuestionIndicate which one of the following;would appear on the income statement of both a merchandiser and a service;company.;Sales revenue;Operating expenses;Cost of goods sold;Gross profit;QuestionWhich of the following accounts will;appear in the trial balance of a merchandising company but not a service;company?;Salaries and Wages Expense.;Inventory.;Accumulated Depreciation - Equipment.;Owner's Drawings.;QuestionWhich one of the following transactions;is recorded with the same entry in a perpetual and a periodic inventory system?;Payment of freight costs on a purchase;Sale of merchandise on credit;Cash received on account with a discount;Return of merchandise sold;QuestionWhen the terms of sale are FOB shipping;point, ownership of the goods remains with the seller until the goods reach the;buyer.;True;False;QuestionThe FIFO method assumes that the;earliest goods purchased are the first to be sold.;True;False;QuestionIn periods of rising prices, the;inventory method which results in the inventory value on the balance sheet that;is closest to current cost is the;LIFO method.;average cost method.;FIFO method.;tax method.;QuestionThe lower-of-cost?or-market basis of;valuing inventories is an example of;the historical cost principle.;comparability.;conservatism.;consistency.;QuestionUnderstating beginning inventory will;understate;net income.;assets.;cost of goods sold.;owner?s equity.;QuestionInventory turnover is;calculated by dividing cost of goods sold by;average inventory.;365 days.;beginning inventory.;ending inventory.;QuestionA new average cost is computed each;time a purchase is made in the;average cost method.;all of these methods.;moving-average cost method.;weighted-average cost method.;QuestionThe consistent;application of an inventory costing method is essential for;conservatism.;accuracy.;efficiency.;comparability.;QuestionUnderstating beginning;inventory will understate;owner's;equity.;cost;of goods sold.;assets.;net;income.;QuestionDisclosures about;inventory should include each of the following exceptthe;basis;of accounting.;costing;method.;quantity;of inventory.;major;inventory classifications.;div.eng_slide a > img {width:119px !important,height:102px !important,}div.eng_slide a,div.eng_slide span {width:119px 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Paper#37504 | Written in 18-Jul-2015

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