Acct 211 homework 1 quiz 1;Acct 211 homework 1 quiz 1;1.;All of the following are true regarding ethics except;Ethics are beliefs that separate right from wrong.;Ethics rules are often set for CPAs.;Ethics do not affect the operations or outcome of a company.;Are critical in accounting.;Ethics can be hard to apply.;2.;To include the personal assets and transactions of a business's owner in the records and reports of the business would be in conflict with the;Objectivity principle.;Monetary unit assumption.;Business entity assumption.;Going-concern assumption.;Revenue recognition principle.;3.;The question of when revenue should be recognized on the income statement (according to GAAP) is addressed by the;Revenue recognition principle.;Going-concern assumption.;Objectivity principle;Business entity assumption;Cost principle;4.;Revenue is properly recognized;When the customer's order is received.;Only if the transaction creates an account receivable.;At the end of the accounting period.;Upon completion of the sale or when services have been performed and the business obtains the right to collect the sales price.;When cash from a sale is received.;5.;A payment to an owner is called a(n);Liability.;Withdrawal.;Expense.;Contribution.;Investment.;6.;The statement of cash flows reports all of the following except;Cash flows from operating activities.;Cash flows from investing activities.;Cash flows from financing activities.;The net increase or decrease in assets for the period reported.;The net increase or decrease in cash for the period reported.;7.;The statement of owner's equity;Reports how equity changes at a point in time.;Reports how equity changes over a period of time.;Reports on cash flows for operating, financing, and investing activities over a period of time.;Reports on cash flows for operating, financing, and investing activities at a point in time.;Reports on amounts for assets, liabilities, and equity at a point in time.;8.;The financial statement that identifies where a company's cash came from and where it went during the period is the;Statement of financial position.;Statement of cash flows.;Balance sheet.;Income statement.;Statement of changes in owner's equity.;9.;Cash investments by owners are listed on which of the following statements?;Balance sheet.;Income statement.;Statement of owner's equity only.;Statement of cash flows only.;Statement of owner's equity and statement of cash flows;10;Rent expense that is paid with cash appears on which of the following statements?;Balance sheet.;Income statement.;Statement of owner's equity.;Income statement and statement of cash flows.;Statement of cash flows only.;11;An account used to record the owner's investments in the business is called a(n);Withdrawals account.;Capital account.;Revenue account.;Expense account.;Liability account.;12.;A list of all accounts and the identification number assigned to each account used by a company is called a;Source document.;Journal.;Trial balance.;Chart of accounts.;General Journal.;13.;Which of the following statements is incorrect?;The normal balance of accounts receivable is a debit.;The normal balance of owner's withdrawals is a debit.;The normal balance of unearned revenues is a credit.;The normal balance of an expense account is a credit.;The normal balance of the owner's capital account is a credit.;14;Which of the following statements is correct?;The left side of a T-account is the credit side.;Debits decrease asset and expense accounts, and increase liability, equity, and revenue accounts.;The left side of a T-account is the debit side.;Credits increase asset and expense accounts, and decrease liability, equity, and revenue accounts.;In certain circumstances the total amount debited need not equal the total amount credited for a particular transaction.;15.;Double-entry accounting is an accounting system;That records each transaction twice.;That records the effects of transactions and other events in at least two accounts with equal debits and credits.;In which each transaction affects and is recorded in two or more accounts but that could include two debits and no credits.;That may only be used if T-accounts are used.;That insures that errors never occur.;16.;Which of the following statements is incorrect?;Higher financial leverage involves higher risk.;Risk is higher if a company has more liabilities.;Risk is higher if a company has higher assets.;The debt ratio is one measure of financial risk.;Lower financial leverage involves lower risk.;17.;The process of transferring general journal information to the ledger is;Double-entry accounting.;Posting.;Balancing an account.;Journalizing.;Not required unless debits do not equal credits.;18.;A balance column ledger account is;An account entered on the balance sheet.;An account with debit and credit columns for posting entries and another column for showing the balance of the account after each entry is posted.;Another name for the withdrawals account.;An account used to record the transfers of assets from a business to its owner.;A simple form of account that is widely used in accounting to illustrate the debits and credits required in recording a transaction.;19.;A record in which the effects of transactions are first recorded and from which transaction amounts are posted to the ledger is a(n);Account.;Trial balance.;Journal.;T-account.;Balance column account.;20.;Of the following errors, which one by itself will cause the trial balance to be out of balance?;A $200 cash salary payment posted as a $200 debit to Cash and a $200 credit to Salaries Expense.;A $100 cash receipt from a customer in payment of his account posted as a $100 debit to Cash and a $10 credit to Accounts Receivable.;A $75 cash receipt from a customer in payment of his account posted as a $75 debit to Cash and a $75 credit to Cash.;A $50 cash purchase of office supplies posted as a $50 debit to Office Equipment and a $50 credit to Cash.;An $800 prepayment from a customer for services to be rendered in the future was posted as an $800 debit to Unearned Revenue and an $800 credit to Cash.;21.;The length of time covered by a set of periodic financial statements is referred to as the;Fiscal cycle.;Natural business year.;Accounting period.;Business cycle.;Operating cycle.;22.;Adjusting entries made at the end of an accounting period accomplish all of the following except;Updating liability and asset accounts to their proper balances.;Assigning revenues to the periods in which they are earned.;Assigning expenses to the periods in which they are incurred.;Assuring that financial statements reflect the revenues earned and the expenses incurred.;Assuring that external transaction amounts remain unchanged.;23.;The approach to preparing financial statements based on recognizing revenues when they are earned and matching expenses to those revenues is;Cash basis accounting.;The matching principle.;The time period assumption.;Accrual basis accounting.;Revenue basis accounting.;24.;An adjusting entry could be made for each of the following except;Prepaid expenses.;Depreciation.;Owner withdrawals.;Unearned revenues.;Accrued revenues.;25.;All of the following statements regarding profit margin are true except;Profit margin reflects the percent of profit in each dollar of revenue.;Profit margin is also called return on sales.;Profit margin can be used to compare a firm's performance to its competitors.;Profit margin is calculated by dividing net income by net sales.;Profit margin is not a useful measure of a company's operating results.;26.;An account linked with another account that has an opposite normal balance and that is subtracted from the balance of the related account is a(n);Accrued expense.;Contra account.;Accrued revenue.;Intangible asset.;Adjunct account.;27.;The difference between the cost of an asset and the accumulated depreciation for that asset is called;Depreciation Expense.;Unearned Depreciation.;Prepaid Depreciation.;Depreciation Value.;Book Value.;28.;A balance sheet that places the assets above the liabilities and equity is called a(n);Report form balance sheet.;Account form balance sheet.;Classified balance sheet.;Unadjusted balance sheet.;Unclassified balance sheet.;29.;Which of the following statements related to U.S. GAAP and IFRS is incorrect;Both U.S. GAAP and IFRS include guidance for adjusting entries.;Both U.S. GAAP and IFRS prepare the same four financial statements.;U.S. GAAP does not require items to be separated by current and noncurrent classifications on the balance sheet.;U.S. GAAP balance sheets report current items first.;IFRS balance sheets normally present noncurrent items first.;30.;Assuming unearned revenues are originally recorded in balance sheet accounts, the adjusting entry to record earning of unearned revenue is;Increase an expense, increase a liability.;Increase an asset, increase revenue.;Decrease a liability, increase revenue.;Increase an expense, decrease an asset.;Increase an expense, decrease a liability.
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