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Assignment Part 1;Question;Which of the following is not a step in the accounting process?;Verification;Recording;Communication;Identification;Question;Which 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.;Question;The 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.;Question;The 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.;Question;Which 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.;Question;Liabilities of a company would not include;accounts payable.;accounts receivable.;salaries and wages payable.;notes payable.;Question;Performing 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.;Question;All 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.;Question;When a company earns revenues, owner's equity increases.;True;False;Question;The 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.;Question;An entry that requires more than two accounts is a compound entry.;True;False;Question;Management could determine the amounts due from customers by examining;which ledger account?;Supplies;Accounts Payable;Service Revenue;Accounts Receivable;Question;Posting;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.;Question;A 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.;Question;Which of the following time periods would not be referred to as an interim period?;quarterly;monthly;annually;semi-annually;Question;The 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.;Question;An 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.;Question;Accumulated Depreciation is an asset account.;True;False;Question;Clark 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.;Question;The 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.;Question;If 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.;Question;Companies journalize the adjustments after they complete the worksheet but before preparing the financial statements.;True;False;Question;The Owner?s Drawings account is closed through the Income Summary account.;True;False;Question;The 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.;Question;Which 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;Question;Correcting 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.;Question;Current liabilities are obligations that are reasonably expected to be paid from existing current assets or through the creation of other current liabilities.;True;False;Question;Use 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.;Question;In a perpetual inventory system, a company determines the cost of goods sold each time a sale occurs.;True;False;Question;Stine 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%;Question;In 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.;Question;In preparing closing entries for a merchandiser, the Income Summary account will be credited for the balance of;Sales Discounts.;Freight-Out.;Sales Revenue.;Inventory.;Question;Indicate 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;Question;Which 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.;Question;Which 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;Question;When the terms of sale are FOB shipping point, ownership of the goods remains with the seller until the goods reach the buyer.;True;False;Question;The FIFO method assumes that the earliest goods purchased are the first to be sold.;True;False;Question;In 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.;Question;The lower-of-cost?or-market basis of valuing inventories is an example of;the historical cost principle.;comparability.;conservatism.;consistency.;Question;Understating beginning inventory will understate;net income.;assets.;cost of goods sold.;owner?s equity.;Question;Inventory turnover is calculated by dividing cost of goods sold by;average inventory.;365 days.;beginning inventory.;ending inventory.;Question;A 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.;Question;The consistent application of an inventory costing method is essential for;conservatism.;accuracy.;efficiency.;comparability.;Question;Understating beginning inventory will understate;owner's equity.;cost of goods sold.;assets.;net income.;Question;Disclosures about inventory should include each of the following exceptthe;basis of accounting.;costing method.;quantity of inventory.;major inventory classifications.


Paper#81784 | Written in 18-Jul-2015

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