Question 1

The convention of consistency pertains to the use of the same accounting principles by firms in the same industry.

Accepted Answer

A) True 
 B)False

Question 2

Characteristics associated with relevant accounting information are

Accepted Answer

A) comparability and timeliness. 
B) predictive value and confirmatory value. 
C) neutral and verifiable. 
D) consistency and understandability. 
A) comparability and timeliness. 
B) predictive value and confirmatory value. 
C) neutral and verifiable. 
D) consistency and understandability.

Question 3

The payment of a portion of an accounts payable will

Accepted Answer

A) not affect total assets. 
B) increase liabilities. 
C) not affect stockholders' equity. 
D) decrease net income. 
A) not affect total assets. 
B) increase liabilities. 
C) not affect stockholders' equity. 
D) decrease net income.

Question 4

The Mac Company has four plants nationwide that cost $350 million.The current fair value of the plants is $300 million.The plants will be reported as assets at

Accepted Answer

A) $350 million. 
B) $700 million. 
C) $300 million. 
D) $600 million. 
A) $350 million. 
B) $700 million. 
C) $300 million. 
D) $600 million.

Question 5

During November Kobe Orr invested $300 in a new pet-sitting business Kobe's Cats.During its first month of operations Kobe's Cats performed services and billed customers $750 paid $150 for advertising and collected $500 from customers.Use the following tabular analysis to determine Kobe's Cats' Cash balance at the end of November

Accepted Answer

A) $1050 
B) $900 
C) $650 
D) $350 
A) $1050 
B) $900 
C) $650 
D) $350

Question 6

At September 1 2022 Baxter Inc.reported Retained Earnings of $423000.During the month Baxter generated revenues of $60000 incurred expenses of $36000 purchased equipment for $15000 and paid dividends of $6000.What is the balance in Retained Earnings at September 30 2022?

Accepted Answer

A) $423000 
B) $24000 
C) $426000 
D) $441000 
A) $423000 
B) $24000 
C) $426000 
D) $441000

Question 7

At October 1 2022 Metz Industries had an Accounts Payable balance of $140000.During the month the company made purchases on account of $100000 and made payments on account of $160000.At October 31 2022 the Accounts Payable balance is

Accepted Answer

A) $140000 
B) $20000 
C) $80000 
D) $160000 
A) $140000 
B) $20000 
C) $80000 
D) $160000

Question 8

Materiality is a company-specific aspect of faithful representation.

Accepted Answer

A) True 
 B)False

Question 9

Valuing assets at their fair value rather than at their cost is an exception to the

Accepted Answer

A) economic entity assumption. 
B) historical cost principle. 
C) periodicity assumption. 
D) full disclosure principle. 
A) economic entity assumption. 
B) historical cost principle. 
C) periodicity assumption. 
D) full disclosure principle.

Question 10

The primary accounting standard-setting body in the United States is the Securities and Exchange Commission.

Accepted Answer

A) True 
 B)False

Question 11

An item is considered material if

Accepted Answer

A) it does not cost a lot of money. 
B) it is of a tangible good. 
C) its size is likely to influence the decision of an investor or creditor. 
D) the cost of reporting the item is greater than its benefits. 
A) it does not cost a lot of money. 
B) it is of a tangible good. 
C) its size is likely to influence the decision of an investor or creditor. 
D) the cost of reporting the item is greater than its benefits.

Question 12

Which of the following is not a quality associated with faithful representation?

Accepted Answer

A) Complete 
B) Material 
C) Neutral 
D) All of these answer choices are associated with faithful representation. 
A) Complete 
B) Material 
C) Neutral 
D) All of these answer choices are associated with faithful representation.

Question 13

The purchase of an asset on credit

Accepted Answer

A) increases assets and stockholders' equity. 
B) increases assets and liabilities. 
C) decreases assets and increases liabilities. 
D) leaves total assets unchanged. 
A) increases assets and stockholders' equity. 
B) increases assets and liabilities. 
C) decreases assets and increases liabilities. 
D) leaves total assets unchanged.

Question 14

Prepaid expenses are assets.

Accepted Answer

A) True 
 B)False

Question 15

On the balance sheet stockholders' equity consists of net income and retained earnings.

Accepted Answer

A) True 
 B)False

Question 16

Jenna Jeffries started her business baking dog treats by investing cash of $1000.During May its first month of operations Jenna's Barkery had revenues of $3000 all of which was collected in cash.She paid her assistant $1000 in cash and purchased $200 of supplies on account.The business paid cash dividends of $500.Use the following tabular analysis to determine how Jenna will record the payment to her employee.

Accepted Answer

A) Decrease Cash $1000 and increase Expenses $1000. 
B) Increase Accounts Payable $1000 and decreases Cash $1000. 
C) Decrease Cash $1000 and decrease Expenses $1000. 
D) Increase Accounts Payable $1000 and decrease Expenses $1000. 
A) Decrease Cash $1000 and increase Expenses $1000. 
B) Increase Accounts Payable $1000 and decreases Cash $1000. 
C) Decrease Cash $1000 and decrease Expenses $1000. 
D) Increase Accounts Payable $1000 and decrease Expenses $1000.

Question 17

Jamal Company began the year with $126000 in its Common Stock account and a balance in Retained Earnings of $54000.During the year the company earned net income of $27000 and declared and paid $9000 of dividends.In addition the company sold additional common stock amounting to $33000.Based on this information what should the transaction analysis show for the ending total of all stockholders' equity accounts?

Accepted Answer

A) $231000 
B) $249000 
C) $123000 
D) $165000 
A) $231000 
B) $249000 
C) $123000 
D) $165000

Question 18

Jackson Cement Corporation reported $35 million for sales when it only had $20 million of actual sales.Which of the following qualities of useful information has Jackson most likely violated?

Accepted Answer

A) Comparability 
B) Relevance 
C) Faithful representation 
D) Consistency 
A) Comparability 
B) Relevance 
C) Faithful representation 
D) Consistency

Question 19

Jenna Jeffries started her business baking dog treats by investing cash of $1000.During May its first month of operations Jenna's Barkery had revenues of $3000 all of which was collected in cash.She paid her assistant $1000 in cash and purchased $200 of supplies on account.The business paid cash dividends of $500.Use the following tabular analysis to determine the balance in Cash at the end of the month.

Accepted Answer

A) $500 
B) $1500 
C) $2300 
D) $2500 
A) $500 
B) $1500 
C) $2300 
D) $2500

Question 20

The dividends account is a subdivision of the retained earnings account and appears as an expense on the income statement.

Accepted Answer

A) True 
 B)False

The convention of consistency pertains to the use of the same accounting principles by firms in the same industry.

Characteristics associated with relevant accounting information are

The payment of a portion of an accounts payable will

The Mac Company has four plants nationwide that cost $350 million.The current fair value of the plants is $300 million.The plants will be reported as assets at

At September 1 2022 Baxter Inc.reported Retained Earnings of $423000.During the month Baxter generated revenues of $60000 incurred expenses of $36000 purchased equipment for $15000 and paid dividends of $6000.What is the balance in Retained Earnings at September 30 2022?

At October 1 2022 Metz Industries had an Accounts Payable balance of $140000.During the month the company made purchases on account of $100000 and made payments on account of $160000.At October 31 2022 the Accounts Payable balance is

Materiality is a company-specific aspect of faithful representation.

Valuing assets at their fair value rather than at their cost is an exception to the

The primary accounting standard-setting body in the United States is the Securities and Exchange Commission.

An item is considered material if

Which of the following is not a quality associated with faithful representation?

The purchase of an asset on credit

Prepaid expenses are assets.

On the balance sheet stockholders' equity consists of net income and retained earnings.

Jackson Cement Corporation reported $35 million for sales when it only had $20 million of actual sales.Which of the following qualities of useful information has Jackson most likely violated?

The dividends account is a subdivision of the retained earnings account and appears as an expense on the income statement.

Introduction to Financial Statements

A Further Look at Financial Statements

Accrual Accounting Concepts

Fraud, Internal Control, and Cash

Reporting and Analyzing Long-Lived Assets

Reporting and Analyzing Liabilities and Stockholders Equity

Financial Analysis: the Big Picture

Managerial Accounting

Cost-Volume-Profit

Incremental Analysis

Budgetary Planning

Budgetary Control and Responsibility Accounting

Standard Costs and Balanced Scorecard

Planning for Capital Investments

Activity Based Costing

Cost-Volume Profit Analysis: Additional Issues

Filters

Exam 3: The Accounting Information System

The convention of consistency pertains to the use of the same accounting principles by firms in the same industry.

Characteristics associated with relevant accounting information are

The payment of a portion of an accounts payable will

The Mac Company has four plants nationwide that cost $350 million.The current fair value of the plants is $300 million.The plants will be reported as assets at

At September 1 2022 Baxter Inc.reported Retained Earnings of $423000.During the month Baxter generated revenues of $60000 incurred expenses of $36000 purchased equipment for $15000 and paid dividends of $6000.What is the balance in Retained Earnings at September 30 2022?

At October 1 2022 Metz Industries had an Accounts Payable balance of $140000.During the month the company made purchases on account of $100000 and made payments on account of $160000.At October 31 2022 the Accounts Payable balance is

Materiality is a company-specific aspect of faithful representation.

Valuing assets at their fair value rather than at their cost is an exception to the

The primary accounting standard-setting body in the United States is the Securities and Exchange Commission.

An item is considered material if

Which of the following is not a quality associated with faithful representation?

The purchase of an asset on credit

Prepaid expenses are assets.

On the balance sheet stockholders' equity consists of net income and retained earnings.

Jackson Cement Corporation reported $35 million for sales when it only had $20 million of actual sales.Which of the following qualities of useful information has Jackson most likely violated?

The dividends account is a subdivision of the retained earnings account and appears as an expense on the income statement.

Introduction to Financial Statements

A Further Look at Financial Statements

Accrual Accounting Concepts

Fraud, Internal Control, and Cash

Reporting and Analyzing Long-Lived Assets

Reporting and Analyzing Liabilities and Stockholders Equity

Financial Analysis: the Big Picture

Managerial Accounting

Cost-Volume-Profit

Incremental Analysis

Budgetary Planning

Budgetary Control and Responsibility Accounting

Standard Costs and Balanced Scorecard

Planning for Capital Investments

Activity Based Costing

Cost-Volume Profit Analysis: Additional Issues

Filters