Question 1

The periodicity assumption states that the economic life of a business can be divided into

Accepted Answer

A) equal time periods. 
B) cyclical time periods. 
C) artificial time periods. 
D) perpetual time periods. 
A) equal time periods. 
B) cyclical time periods. 
C) artificial time periods. 
D) perpetual time periods.

Question 2

The TNT Company has five plants nationwide that cost $300 million.The current fair value of the plants is $500 million.The plants will be reported as assets at

Accepted Answer

A) $200 million. 
B) $800 million. 
C) $300 million. 
D) $500 million. 
A) $200 million. 
B) $800 million. 
C) $300 million. 
D) $500 million.

Question 3

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 Retained Earnings 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 4

The Unearned Service Revenue account is classified as a(n)

Accepted Answer

A) asset. 
B) revenue. 
C) expense. 
D) liability. 
A) asset. 
B) revenue. 
C) expense. 
D) liability.

Question 5

Information presented in a clear and concise fashion so that users can comprehend its meaning is an application of

Accepted Answer

A) consistency. 
B) timeliness. 
C) verifiability. 
D) understandability. 
A) consistency. 
B) timeliness. 
C) verifiability. 
D) understandability.

Question 6

The periodicity assumption states that

Accepted Answer

A) the business will remain in operation for the foreseeable future. 
B) the life of a business can be divided into artificial time periods and that useful reports covering those periods can be prepared. 
C) every economic entity can be separately identified and accounted for. 
D) only those things that can be expressed in money are included in the accounting records. 
A) the business will remain in operation for the foreseeable future. 
B) the life of a business can be divided into artificial time periods and that useful reports covering those periods can be prepared. 
C) every economic entity can be separately identified and accounted for. 
D) only those things that can be expressed in money are included in the accounting records.

Question 7

Hiring a new employee affects both sides of the accounting equation.

Accepted Answer

A) True 
 B)False

Question 8

Which of the following is not an accounting assumption?

Accepted Answer

A) Integrity 
B) Going concern 
C) Periodicity 
D) Economic entity 
A) Integrity 
B) Going concern 
C) Periodicity 
D) Economic entity

Question 9

The payment of a liability

Accepted Answer

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

Question 10

Which of the following is a constraint in accounting?

Accepted Answer

A) Comparability 
B) Cost 
C) Consistency 
D) Relevance 
A) Comparability 
B) Cost 
C) Consistency 
D) Relevance

Question 11

All of the following are qualities of useful information except

Accepted Answer

A) faithful representation. 
B) materiality. 
C) relevance. 
D) flexibility. 
A) faithful representation. 
B) materiality. 
C) relevance. 
D) flexibility.

Question 12

Economic events that are required to be recorded in the financial statements are called accounting transactions.

Accepted Answer

A) True 
 B)False

Question 13

Courtney Company purchased equipment for $1800 cash.As a result of this event

Accepted Answer

A) equity decreased by $1800. 
B) assets increased by $1800. 
C) total assets remained unchanged. 
D) Both assets and equity decreased by $1800. 
A) equity decreased by $1800. 
B) assets increased by $1800. 
C) total assets remained unchanged. 
D) Both assets and equity decreased by $1800.

Question 14

The retained earnings statement reports the changes in stockholders' equity for a specific period of time.

Accepted Answer

A) True 
 B)False

Question 15

If a company pays dividends of $10000

Accepted Answer

A) stockholders' equity but not retained earnings will be reduced by $10000. 
B) net income will be reduced by $10000. 
C) retained earnings but not stockholders' equity will be reduced by $10000. 
D) Both retained earnings and stockholders' equity will be reduced by $10000. 
A) stockholders' equity but not retained earnings will be reduced by $10000. 
B) net income will be reduced by $10000. 
C) retained earnings but not stockholders' equity will be reduced by $10000. 
D) Both retained earnings and stockholders' equity will be reduced by $10000.

Question 16

The going concern assumption is that the business will continue in operation long enough to carry out its existing objectives and commitments.

Accepted Answer

A) True 
 B)False

Question 17

Powers Corporation received a cash advance of $500 from a customer.As a result of this event

Accepted Answer

A) assets increased by $500. 
B) equity increased by $500. 
C) liabilities decreased by $500. 
D) Both assets and equity increased by $500. 
A) assets increased by $500. 
B) equity increased by $500. 
C) liabilities decreased by $500. 
D) Both assets and equity increased by $500.

Question 18

Dorsett Company's tabular analysis at the beginning of May consisted of the following balances:   During October the company borrowed an additional $4500 from Trans-Union National Bank and used the funds to purchase additional equipment with a cost of $4000.What would be the combined effect of these two transactions on the tabular analysis?

Accepted Answer

A) Increase Cash $4500 and increase Expenses $4500. 
B) Increase Cash $500 increase Equipment $4000 and increase Notes Payable $4500. 
C) Increase Cash $4500 increase Expenses $500 and decrease Notes Payable $4000. 
D) Increase Notes Payable $4500 and increase Equipment $4500. 
A) Increase Cash $4500 and increase Expenses $4500. 
B) Increase Cash $500 increase Equipment $4000 and increase Notes Payable $4500. 
C) Increase Cash $4500 increase Expenses $500 and decrease Notes Payable $4000. 
D) Increase Notes Payable $4500 and increase Equipment $4500.

Question 19

When a collection is made of Accounts Receivable

Accepted Answer

A) total assets will remain the same. 
B) stockholders equity will increase. 
C) total assets will increase. 
D) total assets will decrease. 
A) total assets will remain the same. 
B) stockholders equity will increase. 
C) total assets will increase. 
D) total assets will decrease.

Question 20

AMB Company's tabular analysis at the beginning of October consisted of the following balances:   During October the company issued additional shares of stock for proceeds of $2000.How would this transaction be recorded in the tabular analysis?

Accepted Answer

A) Decrease Cash by $2000 and increase Revenue by $2000. 
B) Increase Accounts Receivable by $2000 and increase Revenue by $2000. 
C) Increase Cash by $2000 and decrease Common Stock by $2000. 
D) Increase Cash by $2000 and increase Common Stock by $2000. 
A) Decrease Cash by $2000 and increase Revenue by $2000. 
B) Increase Accounts Receivable by $2000 and increase Revenue by $2000. 
C) Increase Cash by $2000 and decrease Common Stock by $2000. 
D) Increase Cash by $2000 and increase Common Stock by $2000.

The periodicity assumption states that the economic life of a business can be divided into

The TNT Company has five plants nationwide that cost $300 million.The current fair value of the plants is $500 million.The plants will be reported as assets at

The Unearned Service Revenue account is classified as a(n)

Information presented in a clear and concise fashion so that users can comprehend its meaning is an application of

The periodicity assumption states that

Hiring a new employee affects both sides of the accounting equation.

Which of the following is not an accounting assumption?

The payment of a liability

Which of the following is a constraint in accounting?

All of the following are qualities of useful information except

Economic events that are required to be recorded in the financial statements are called accounting transactions.

Courtney Company purchased equipment for $1800 cash.As a result of this event

The retained earnings statement reports the changes in stockholders' equity for a specific period of time.

If a company pays dividends of $10000

The going concern assumption is that the business will continue in operation long enough to carry out its existing objectives and commitments.

Powers Corporation received a cash advance of $500 from a customer.As a result of this event

When a collection is made of Accounts Receivable

AMB Company's tabular analysis at the beginning of October consisted of the following balances: During October the company issued additional shares of stock for proceeds of $2000.How would this transaction be recorded in the tabular analysis?

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 periodicity assumption states that the economic life of a business can be divided into

The TNT Company has five plants nationwide that cost $300 million.The current fair value of the plants is $500 million.The plants will be reported as assets at

The Unearned Service Revenue account is classified as a(n)

Information presented in a clear and concise fashion so that users can comprehend its meaning is an application of

The periodicity assumption states that

Hiring a new employee affects both sides of the accounting equation.

Which of the following is not an accounting assumption?

The payment of a liability

Which of the following is a constraint in accounting?

All of the following are qualities of useful information except

Economic events that are required to be recorded in the financial statements are called accounting transactions.

Courtney Company purchased equipment for $1800 cash.As a result of this event

The retained earnings statement reports the changes in stockholders' equity for a specific period of time.

If a company pays dividends of $10000

The going concern assumption is that the business will continue in operation long enough to carry out its existing objectives and commitments.

Powers Corporation received a cash advance of $500 from a customer.As a result of this event

When a collection is made of Accounts Receivable

AMB Company's tabular analysis at the beginning of October consisted of the following balances: During October the company issued additional shares of stock for proceeds of $2000.How would this transaction be recorded in the tabular analysis?

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