Question 1

Which of the following is an asset?

Accepted Answer

A) Service Revenue 
B) Notes Payable 
C) Supplies Expense 
D) Prepaid Rent 
A) Service Revenue 
B) Notes Payable 
C) Supplies Expense 
D) Prepaid Rent

Question 2

Which one of the following is not an enhancing quality of useful information?

Accepted Answer

A) Timeliness 
B) Understandability 
C) Materiality 
D) Comparability 
A) Timeliness 
B) Understandability 
C) Materiality 
D) Comparability

Question 3

To be faithfully representative accounting information should predict future events confirm prior expectations and be reported on a timely basis.

Accepted Answer

A) True 
 B)False

Question 4

During January 2022 its first month of operation Osborn Enterprises earned net income of $6800 and paid dividends to the owners of $2000.At January 31 the balance in Retained Earnings will be

Accepted Answer

A) $0. 
B) $6800 
C) $4800 
D) $2000 
A) $0. 
B) $6800 
C) $4800 
D) $2000

Question 5

Which of the following items has no effect on retained earnings?

Accepted Answer

A) Expense 
B) Dividend 
C) Land purchase 
D) Revenue 
A) Expense 
B) Dividend 
C) Land purchase 
D) Revenue

Question 6

Garrison Company prepares quarterly reports which it distributes to all stockholders and other entities that rely on its accounting information.Which of the following is the best term for the key assumption in financial reporting that Garrison is following?

Accepted Answer

A) Monetary unit assumption 
B) Going concern assumption 
C) Economic entity assumption 
D) Periodicity assumption. 
A) Monetary unit assumption 
B) Going concern assumption 
C) Economic entity assumption 
D) Periodicity assumption.

Question 7

If there is a net loss it is shown as a deduction on the retained earnings statement.

Accepted Answer

A) True 
 B)False

Question 8

At December 1 2022 Orear Company's Accounts Receivable balance was $16800.During December Orear had credit sales of $45000 and collected accounts receivable of $36000.At December 31 2022 the Accounts Receivable balance is

Accepted Answer

A) $16800 
B) $25800 
C) $61800 
D) $9000 
A) $16800 
B) $25800 
C) $61800 
D) $9000

Question 9

Are prepaid amounts received 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 10

During 2022 its first year of operations Jane's Bakery had revenues of $130000 and expenses of $66000.The business paid cash dividends of $36000.What is the balance in Retained Earnings at December 31 2022?

Accepted Answer

A) $0 
B) $36000 
C) $28000 
D) $64000 
A) $0 
B) $36000 
C) $28000 
D) $64000

Question 11

During September its first month of operations Sailor Tutoring Service Inc.performed SAT prep tutoring services and billed customers $1200.The company collected 75% of the amount owed.The combined effect of these two transactions on Sailor's tabular analysis is:

Accepted Answer

A) Increase Cash by $900 increase Accounts Receivable $300 and increase Revenue by $1200. 
B) Increase Cash by $900 and increase Revenue by $900. 
C) Decrease Accounts Payable by $300 increase Revenue by $900 and increase Cash by $1200. 
D) Increase Accounts Accounts Receivable $1200 and increase Revenue $1200. 
A) Increase Cash by $900 increase Accounts Receivable $300 and increase Revenue by $1200. 
B) Increase Cash by $900 and increase Revenue by $900. 
C) Decrease Accounts Payable by $300 increase Revenue by $900 and increase Cash by $1200. 
D) Increase Accounts Accounts Receivable $1200 and increase Revenue $1200.

Question 12

A material item is one that is likely to influence an investor's decision.

Accepted Answer

A) True 
 B)False

Question 13

The issuance of additional shares of common stock increases a company's revenues.

Accepted Answer

A) True 
 B)False

Question 14

Consistency in accounting means that a company uses the same generally accepted accounting principles from one accounting period to the next accounting period.

Accepted Answer

A) True 
 B)False

Question 15

A company can change to a new method of accounting if management can justify that the new method results in

Accepted Answer

A) more meaningful financial information. 
B) a higher net income. 
C) a lower net income for tax purposes. 
D) less likelihood of clerical errors. 
A) more meaningful financial information. 
B) a higher net income. 
C) a lower net income for tax purposes. 
D) less likelihood of clerical errors.

Question 16

Consistent use of the same accounting principles and methods is necessary for meaningful analysis of trends within a company.

Accepted Answer

A) True 
 B)False

Question 17

If accounting information has relevance it is useful in making predictions about

Accepted Answer

A) future IRS audits. 
B) new accounting principles. 
C) foreign currency exchange rates. 
D) the future events of a company. 
A) future IRS audits. 
B) new accounting principles. 
C) foreign currency exchange rates. 
D) the future events of a company.

Question 18

Connor Corporation hired a new accountant.Over the next four years the accountant used four different accounting methods to calculate depreciation for Connor's equipment.Which of the following qualities of useful information has Connor 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

What organization issues U.S.accounting standards?

Accepted Answer

A) Security Exchange Commission 
B) International Accounting Standards Committee 
C) International Auditing Standards Committee 
D) Financial Accounting Standards Board 
A) Security Exchange Commission 
B) International Accounting Standards Committee 
C) International Auditing Standards Committee 
D) Financial Accounting Standards Board

Question 20

If an individual asset is increased then

Accepted Answer

A) there could be an equal decrease in a specific liability. 
B) there could be an equal decrease in stockholders' equity. 
C) there could be an equal decrease in another asset. 
D) None of these answer choices are correct. 
A) there could be an equal decrease in a specific liability. 
B) there could be an equal decrease in stockholders' equity. 
C) there could be an equal decrease in another asset. 
D) None of these answer choices are correct.

Which of the following is an asset?

Which one of the following is not an enhancing quality of useful information?

To be faithfully representative accounting information should predict future events confirm prior expectations and be reported on a timely basis.

During January 2022 its first month of operation Osborn Enterprises earned net income of $6800 and paid dividends to the owners of $2000.At January 31 the balance in Retained Earnings will be

Which of the following items has no effect on retained earnings?

Garrison Company prepares quarterly reports which it distributes to all stockholders and other entities that rely on its accounting information.Which of the following is the best term for the key assumption in financial reporting that Garrison is following?

If there is a net loss it is shown as a deduction on the retained earnings statement.

At December 1 2022 Orear Company's Accounts Receivable balance was $16800.During December Orear had credit sales of $45000 and collected accounts receivable of $36000.At December 31 2022 the Accounts Receivable balance is

Are prepaid amounts received from customers treated as revenue at the time of receipt? Why or why not?

During 2022 its first year of operations Jane's Bakery had revenues of $130000 and expenses of $66000.The business paid cash dividends of $36000.What is the balance in Retained Earnings at December 31 2022?

During September its first month of operations Sailor Tutoring Service Inc.performed SAT prep tutoring services and billed customers $1200.The company collected 75% of the amount owed.The combined effect of these two transactions on Sailor's tabular analysis is:

A material item is one that is likely to influence an investor's decision.

The issuance of additional shares of common stock increases a company's revenues.

Consistency in accounting means that a company uses the same generally accepted accounting principles from one accounting period to the next accounting period.

A company can change to a new method of accounting if management can justify that the new method results in

Consistent use of the same accounting principles and methods is necessary for meaningful analysis of trends within a company.

If accounting information has relevance it is useful in making predictions about

Connor Corporation hired a new accountant.Over the next four years the accountant used four different accounting methods to calculate depreciation for Connor's equipment.Which of the following qualities of useful information has Connor most likely violated?

What organization issues U.S.accounting standards?

If an individual asset is increased then

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

Which of the following is an asset?

Which one of the following is not an enhancing quality of useful information?

To be faithfully representative accounting information should predict future events confirm prior expectations and be reported on a timely basis.

During January 2022 its first month of operation Osborn Enterprises earned net income of $6800 and paid dividends to the owners of $2000.At January 31 the balance in Retained Earnings will be

Which of the following items has no effect on retained earnings?

Garrison Company prepares quarterly reports which it distributes to all stockholders and other entities that rely on its accounting information.Which of the following is the best term for the key assumption in financial reporting that Garrison is following?

If there is a net loss it is shown as a deduction on the retained earnings statement.

At December 1 2022 Orear Company's Accounts Receivable balance was $16800.During December Orear had credit sales of $45000 and collected accounts receivable of $36000.At December 31 2022 the Accounts Receivable balance is

Are prepaid amounts received from customers treated as revenue at the time of receipt? Why or why not?

During 2022 its first year of operations Jane's Bakery had revenues of $130000 and expenses of $66000.The business paid cash dividends of $36000.What is the balance in Retained Earnings at December 31 2022?

During September its first month of operations Sailor Tutoring Service Inc.performed SAT prep tutoring services and billed customers $1200.The company collected 75% of the amount owed.The combined effect of these two transactions on Sailor's tabular analysis is:

A material item is one that is likely to influence an investor's decision.

The issuance of additional shares of common stock increases a company's revenues.

Consistency in accounting means that a company uses the same generally accepted accounting principles from one accounting period to the next accounting period.

A company can change to a new method of accounting if management can justify that the new method results in

Consistent use of the same accounting principles and methods is necessary for meaningful analysis of trends within a company.

If accounting information has relevance it is useful in making predictions about

Connor Corporation hired a new accountant.Over the next four years the accountant used four different accounting methods to calculate depreciation for Connor's equipment.Which of the following qualities of useful information has Connor most likely violated?

What organization issues U.S.accounting standards?

If an individual asset is increased then

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