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ACC Chapter 12 Extra Credit Assignment Quiz




Question;1)The;primary difference between accrual-basis and cash-basis accounting is;A.;The timing of when revenues and expenses are recorded. ?In cash basis the revenues and;expenses are recorded as and when the cash is received or paid, whereas accrual;basis records entry for a period irrespective of the cash transactions has been;done or not.;B. Cash-basis;accounting is allowed for financial reporting purposes but not accrual-basis;accounting.;C. Accrual-basis;accounting violates both the revenue recognition and matching principles.;D. Adjusting;entries are only a necessary part of cash-basis accounting.;2)Which;of the following does not represent a major provision of the Sarbanes-Oxley;Act?;A. Nonaudit;services.;B.;Quarterly financial statements.;C. Auditor rotation.;D. Corporate;executive accountability.;3);Transactions;of a company that include the purchase and sale of long-term productive assets;are referred to as;A.;Investing activities. ?It;records all the sales and purchase of assets.;B. Financing activities.;C. Expenditure;activities.;D. Operating;activities.;4);Limited;liability means;A. Stockholders of a corporation are not;obligated to pay the corporation's debts out of their own pocket.;B. Liabilities of a;company cannot exceed its assets.;C. Companies are;not allowed to borrow unless they are profitable.;D. Companies are;less likely to be sued if they are formed as a corporation;5);The;account type that represents payments to stockholders is called;A. Liabilities.;B. Assets.;C. Stockholders;equity.;D.;Dividends.;6);The;equation best describing the income statement is;A.;Revenues - Expenses = Net Income.;B. Assets =;Revenues - Expenses.;C. Assets =;Liabilities + Stockholders' Equity.;D. Revenues +;Expenses = Net Income.;7);When;the company pays stockholders a dividend, what is the effect on the accounting;equation for that company?;A. Decrease;stockholders' equity and increase assets.;B. Increase;liabilities and increase assets.;C. Decrease assets;and decrease liabilities.;D.;Decrease assets and decrease stockholders' equity.;8);A;revenue has what effect on the accounting equation?;A. Increase;liabilities.;B. Decrease assets.;C.;Increase stockholders' equity.;D. No effect.;9);If;the liabilities of a company increased by $55,000 during a month and the;stockholders' equity decreased by $21,000 during that same month, did assets;increase or decrease and by how much?;A.;$34,000 increase;B. $55,000 increase;C. $34,000 decrease;D. $76,000 increase;10);When;a company pays $2,500 dividends to its stockholders, the transaction should be;recorded as;A. Debit Cash;credit Dividends.;B. Debit Retained;Earnings, credit Dividends.;C.;Debit Dividends, credit Cash.;D. Debit Dividends;credit Accounts Payable.;11);Clement;Company paid an account payable related to a previous utility bill of $1,000.;This transaction should be recorded as follows on the payment date;A.;Debit Accounts Payable $1,000, credit Cash $1,000.;B. Debit Cash;$1,000, credit Accounts Payable $1,000.;C. Debit Utilities;Expense $1,000, credit Cash $1,000.;D. Debit Cash;$1,000, credit Utilities Expense $1,000.;12);Accounts;Receivable account has a beginning balance of $10,000 and the company provides;services of $50,000 on account during the month. The ending balance was;$12,000. How much did the company receive from customers during the month?;A. $50,000.;B. $52,000.;C.;$48,000.;D. $62,000.;13);If;a transaction causes total assets of the company to increase by $2,000, then;liabilities plus stockholders' equity also increases by $2,000.;A.;True;B. False;14);Expense;accounts increase with a debit and decrease with a credit.;A.;True;B. False;15);On;July 1, 2012, Rents-A-Lot Inc. paid $72,000 for 36 months of advance rent on;its warehouse. What would be the amount of rent expense in the 2013 financial;statements for Rents-A-Lot under both cash-basis and accrual-basis accounting;A. Cash-basis = $24,000;Accrual-basis = $24,000.;B. Cash-basis =;$72,000, Accrual-basis = $12,000.;C.;Cash-basis = $0, Accrual-basis = $24,000.;D. Cash-basis = $0;Accrual-basis = $12,000.;16);Permanent;accounts would not include;A. Accounts;Payable.;B. Office Supplies.;C.;Utilities Expense.;D. Common Stock.;17);A list of all accounts and their balances after posting closing entries is;referred to as;A. A trial balance.;B. An adjusted;trial balance.;C.;A post-closing trial balance.;D. An accounting;trial balance.;18);Separation;of duties refers to;A. Making each;manager personally responsible for his/her department.;B. Keeping;functions across different departments separate.;C. Preventing top;management and lower-level employees from interacting.;D.;Individuals who have physical responsibility for assets should not also have;access to accounting records.;19);Opening;mail and making a list of checks received once per week is considered a good;internal control over cash receipts.;A. True;B.;False;20);Which;of the following companies earn revenues by selling inventory?;A. Service;companies.;B. Manufacturing;companies.;C..Merchandising;companies.;D.;Both manufacturing and merchandising companies.;21);We;record goodwill as an intangible asset in the balance sheet only when we;purchase it as part of the acquisition of another company.;A.;True;B. False;22);Which;of the following is not an employer payroll cost?;A. FICA taxes.;B. Federal and;state unemployment taxes.;C.;Federal and state income taxes.;D. Employer;contributions to a retirement plan.;23);The;disadvantages of owning a corporation include;A. Lack of mutual;agency.;B.;Additional taxes.;C. Limited;liability.;D. Ability to raise;capital.;24);Which;of the following accounts is not reported in the stockholders' equity section;of the balance sheet?;A. Treasury Stock.;B. Common Stock.;C.;Sales Revenue.;D. Retained;Earnings.;25);Arrow;Printers paid $2,000 interest on short-term notes payable, $10,000 interest on;long-term bonds, and $6,000 in dividends on its common stock. Arrow would;report cash outflows from activities, as follows;A. Operating;$2,000, Financing $16,000.;B. Operating, $0, Financing;$18,000.;C.;Operating, $12,000, Financing $6,000.;D. Operating;$18,000, Financing $0.;26);If the base-year amount is zero, we can't calculate a percentage change under;horizontal analysis.;A.;True;B. False;27);Vertical;analysis calculates the amount and percentage change of an account over time.;A. True;B.;False;28);We;can use ratios to help evaluate a firm's performance and financial position.;A.;True;B. False;29);Which;of the following is an example of horizontal analysis?;A. Comparing COGS;with sales.;B. Comparing net;income across companies.;C. Comparing debt;with equity.;D.;Comparing the growth in sales over time.


Paper#39103 | Written in 18-Jul-2015

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