Question 1

Which of the following are the same under both GAAP and IFRS?

Accepted Answer

A) The journal. 
B) The ledger. 
C) The chart of accounts. 
D) All of these answer choices are correct. 
A) The journal. 
B) The ledger. 
C) The chart of accounts. 
D) All of these answer choices are correct.

Question 2

At February 1, 2017, the balance in Goebel Inc.'s supplies account was $3,500. During February. Goebel purchased supplies of $3,000 and used supplies of $4,000. At the end of February, the balance in the Supplies account should be

Accepted Answer

A) $3,500 debit. 
B) $4,500 credit. 
C) $10,500 debit. 
D) $2,500 debit. 
A) $3,500 debit. 
B) $4,500 credit. 
C) $10,500 debit. 
D) $2,500 debit.

Question 3

European companies rely

Accepted Answer

A) less on historical cost and more on fair values than U.S companies. 
B) less on fair values and more on historical cost than U.S companies. 
C) completely on fair values for financial reporting. 
D) completely on historical cost for financial reporting. 
A) less on historical cost and more on fair values than U.S companies. 
B) less on fair values and more on historical cost than U.S companies. 
C) completely on fair values for financial reporting. 
D) completely on historical cost for financial reporting.

Question 4

Management could determine the amounts due from customers by examining which ledger account?

Accepted Answer

A) Service Revenue 
B) Accounts Payable 
C) Accounts Receivable 
D) Supplies 
A) Service Revenue 
B) Accounts Payable 
C) Accounts Receivable 
D) Supplies

Question 5

Under the double-entry system, revenues must always equal expenses.

Accepted Answer

A) True 
 B)False

Question 6

A journal is not useful for

Accepted Answer

A) disclosing in one place the complete effect of a transaction. 
B) preparing financial statements. 
C) providing a record of transactions. 
D) locating and preventing errors. 
A) disclosing in one place the complete effect of a transaction. 
B) preparing financial statements. 
C) providing a record of transactions. 
D) locating and preventing errors.

Question 7

In recording accounting transactions, evidence that a transaction has taken place is obtained from

Accepted Answer

A) source documents. 
B) the Internal Revenue Service. 
C) the public relations department. 
D) the Securities and Exchange Commission. 
A) source documents. 
B) the Internal Revenue Service. 
C) the public relations department. 
D) the Securities and Exchange Commission.

Question 8

Debit and credit can be interpreted to mean "bad" and "good", respectively.

Accepted Answer

A) True 
 B)False

Question 9

All of the following statements regarding the double-entry system are true except

Accepted Answer

A) a two-sided effect of each transaction is recorded in appropriate accounts when using the double-entry system. 
B) the double-entry system provides a logical method for recording transactions. 
C) both sides of the accounting equation must be affected when recording a transaction using the double-entry system. 
D) when using the double-entry system, the sum of all debits to the accounts must equal the sum of all credits. 
A) a two-sided effect of each transaction is recorded in appropriate accounts when using the double-entry system. 
B) the double-entry system provides a logical method for recording transactions. 
C) both sides of the accounting equation must be affected when recording a transaction using the double-entry system. 
D) when using the double-entry system, the sum of all debits to the accounts must equal the sum of all credits.

Question 10

If a company issues common stock for $40,000 and uses $30,000 of the cash to purchase a truck,

Accepted Answer

A) assets will be increased by $10,000. 
B) equity will be reduced by $40,000. 
C) assets will be increased by $40,000. 
D) assets will be unchanged. 
A) assets will be increased by $10,000. 
B) equity will be reduced by $40,000. 
C) assets will be increased by $40,000. 
D) assets will be unchanged.

Question 11

Revenues are a subdivision of stockholders' equity.

Accepted Answer

A) True 
 B)False

Question 12

During 2017, its first year of operations, Jane's Bakery had revenues of $130,000 and expenses of $66,000. The business paid cash dividends of $36,000. What is the balance in Retained Earnings at December 31, 2017?

Accepted Answer

A) $0 
B) $36,000 debit 
C) $28,000 credit 
D) $64,000 credit 
A) $0 
B) $36,000 debit 
C) $28,000 credit 
D) $64,000 credit

Question 13

Transactions are entered in the ledger accounts and then transferred to journals.

Accepted Answer

A) True 
 B)False

Question 14

All of the following are significant contributions that the journal makes to the recording process except the journal

Accepted Answer

A) discloses the complete effect of a transaction in one place. 
B) helps prevent or locate errors because debits and credits can be readily compared. 
C) keeps complete information about changes in a specific account balance in one place. 
D) provides a chronological record of transactions. 
A) discloses the complete effect of a transaction in one place. 
B) helps prevent or locate errors because debits and credits can be readily compared. 
C) keeps complete information about changes in a specific account balance in one place. 
D) provides a chronological record of transactions.

Question 15

A credit means that an account has been increased.

Accepted Answer

A) True 
 B)False

Question 16

Are advanced receipts from customers treated as revenue at the time of receipt? Why or why not?

Accepted Answer

A) Yes, they are treated as revenue at the time of receipt because the company has access to the cash. 
B) No, the amount of revenue cannot be adequately determined until the company completes the work. 
C) Yes, The intent of the company is to perform the work and the customer is confident that the services will be completed. 
D) No, revenue cannot be recognized until the work is performed. 
A) Yes, they are treated as revenue at the time of receipt because the company has access to the cash. 
B) No, the amount of revenue cannot be adequately determined until the company completes the work. 
C) Yes, The intent of the company is to perform the work and the customer is confident that the services will be completed. 
D) No, revenue cannot be recognized until the work is performed.

Question 17

If a company pays dividends of $10,000,

Accepted Answer

A) stockholders' equity will be reduced by $10,000. 
B) net income will be reduced by $10,000. 
C) retained earnings will be reduced by $10,000. 
D) Both retained earnings and stockholders' equity will be reduced by $10,000. 
A) stockholders' equity will be reduced by $10,000. 
B) net income will be reduced by $10,000. 
C) retained earnings will be reduced by $10,000. 
D) Both retained earnings and stockholders' equity will be reduced by $10,000.

Question 18

An account will have a credit balance if the

Accepted Answer

A) credits exceed the debits. 
B) first transaction entered was a credit. 
C) debits exceed the credits. 
D) last transaction entered was a credit. 
A) credits exceed the debits. 
B) first transaction entered was a credit. 
C) debits exceed the credits. 
D) last transaction entered was a credit.

Question 19

Which of the following accounts is increased with a debit?

Accepted Answer

A) Dividends 
B) Service Revenue 
C) Interest Payable 
D) Common Stock 
A) Dividends 
B) Service Revenue 
C) Interest Payable 
D) Common Stock

Question 20

When a company receives a utility bill but will not pay it right away, it should

Accepted Answer

A) debit Utilities Expense and credit Accounts Receivable. 
B) debit Utilities Expense and credit Accounts Payable. 
C) debit Accounts Payable and credit Utilities Expense. 
D) make no entry until the bill is paid. 
A) debit Utilities Expense and credit Accounts Receivable. 
B) debit Utilities Expense and credit Accounts Payable. 
C) debit Accounts Payable and credit Utilities Expense. 
D) make no entry until the bill is paid.

Exam 3: The Accounting Information System

Which of the following are the same under both GAAP and IFRS?

At February 1, 2017, the balance in Goebel Inc.'s supplies account was $3,500. During February. Goebel purchased supplies of $3,000 and used supplies of $4,000. At the end of February, the balance in the Supplies account should be

European companies rely

Management could determine the amounts due from customers by examining which ledger account?

Under the double-entry system, revenues must always equal expenses.

A journal is not useful for

In recording accounting transactions, evidence that a transaction has taken place is obtained from

Debit and credit can be interpreted to mean "bad" and "good", respectively.

All of the following statements regarding the double-entry system are true except

If a company issues common stock for $40,000 and uses $30,000 of the cash to purchase a truck,

Revenues are a subdivision of stockholders' equity.

During 2017, its first year of operations, Jane's Bakery had revenues of $130,000 and expenses of $66,000. The business paid cash dividends of $36,000. What is the balance in Retained Earnings at December 31, 2017?

Transactions are entered in the ledger accounts and then transferred to journals.

All of the following are significant contributions that the journal makes to the recording process except the journal

A credit means that an account has been increased.

Are advanced receipts from customers treated as revenue at the time of receipt? Why or why not?

If a company pays dividends of $10,000,

An account will have a credit balance if the

Which of the following accounts is increased with a debit?

When a company receives a utility bill but will not pay it right away, it should

Introduction to Financial Statements

A Further Look at Financial Statements

Merchandising Operations and the Multiple-Step Income Statement

Reporting and Analyzing Inventory

Fraud, Internal Control, and Cash

Reporting and Analyzing Receivables

Reporting and Analyzing Long-Lived Assets

Reporting and Analyzing Liabilities

Reporting and Analyzing Stockholders Equity

Statement of Cash Flows

Financial Analysis: The Big Picture

Managerial Accounting

Job Order Costing

Process Costing

Activity-Based Costing

Cost-Volume-Profit

Cost-Volume-Profit Analysis: Additional Issues

Incremental Analysis

Budgetary Planning

Budgetary Control and Responsibility Accounting

Standard Costs and Balanced Scorecard

Planning for Capital Investments

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