Question 1

Which of the following statements is not true?

Accepted Answer

A) Comparability means a company uses the same accounting principles from year to year. 
B) Faithful representation is the quality of information that gives assurance that it is free of error. 
C) Relevant accounting information must be capable of making a difference in the decision. 
D) The primary objective of financial reporting is to provide financial information that is useful to investors and creditors for making decisions. 
A) Comparability means a company uses the same accounting principles from year to year. 
B) Faithful representation is the quality of information that gives assurance that it is free of error. 
C) Relevant accounting information must be capable of making a difference in the decision. 
D) The primary objective of financial reporting is to provide financial information that is useful to investors and creditors for making decisions.

Question 2

In order for accounting information to be relevant it must

Accepted Answer

A) have very little cost. 
B) help predict future events or confirm prior expectations. 
C) not be reported to the public. 
D) be used by a lot of different firms. 
A) have very little cost. 
B) help predict future events or confirm prior expectations. 
C) not be reported to the public. 
D) be used by a lot of different firms.

Question 3

The economic entity assumption states that economic events can be identified with a particular unit of accountability.

Accepted Answer

A) True 
 B)False

Question 4

Comstock Company provided consulting services and billed the client $2500.As a result of this event

Accepted Answer

A) assets remained unchanged. 
B) assets increased by $2500 but equity was unchanged. 
C) equity increased by $2500 but assets were unchanged. 
D) both assets and equity increased by $2500. 
A) assets remained unchanged. 
B) assets increased by $2500 but equity was unchanged. 
C) equity increased by $2500 but assets were unchanged. 
D) both assets and equity increased by $2500.

Question 5

The economic entity assumption states that assets should be recorded at their cost.

Accepted Answer

A) True 
 B)False

Question 6

The balance sheet reports assets liabilities and stockholders' equity at a specific date.

Accepted Answer

A) True 
 B)False

Question 7

Bagley AC Repair Company began August with Accounts Receivable totaling $3200.During August the company performed repair services and billed its customers a total of $11500 and collected amounts due totaling $10200.Use the following tabular analysis to determine the net effect of these transactions.

Accepted Answer

A) Increase Accounts Payable by $1300 increase cash by $10200 and increase Revenue by $11500. 
B) Increase Cash by $11500 and increase Revenue by $11500. 
C) Increase Accounts Receivable by $1300 increase Cash by $10200 and increase Revenue by $11500. 
D) Increase Accounts Receivable by $11500 increase Cash by $10200 and increase Revenue $11500. 
A) Increase Accounts Payable by $1300 increase cash by $10200 and increase Revenue by $11500. 
B) Increase Cash by $11500 and increase Revenue by $11500. 
C) Increase Accounts Receivable by $1300 increase Cash by $10200 and increase Revenue by $11500. 
D) Increase Accounts Receivable by $11500 increase Cash by $10200 and increase Revenue $11500.

Question 8

Accounting information is relevant to business decisions when it

Accepted Answer

A) has been verified by external audit. 
B) is prepared on an annual basis. 
C) confirms prior expectations. 
D) is neutral in its representations. 
A) has been verified by external audit. 
B) is prepared on an annual basis. 
C) confirms prior expectations. 
D) is neutral in its representations.

Question 9

Salaries and Wages Payable is a type of expense.

Accepted Answer

A) True 
 B)False

Question 10

In general the FASB indicates that most assets must follow the fair value measurement principle.

Accepted Answer

A) True 
 B)False

Question 11

The quality of consistency enhances

Accepted Answer

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

Question 12

The going concern assumption assumes that the business

Accepted Answer

A) will be liquidated in the near future. 
B) will be purchased by another business. 
C) is in a growth industry. 
D) will remain in operation for the foreseeable future. 
A) will be liquidated in the near future. 
B) will be purchased by another business. 
C) is in a growth industry. 
D) will remain in operation for the foreseeable future.

Question 13

On June 1 2022 England Inc.reported a cash balance of $42000.During June England made deposits of $16000 and made disbursements totaling $48000.What is the cash balance at the end of June?

Accepted Answer

A) $74000 
B) $58000 
C) $10000 
D) $6000 
A) $74000 
B) $58000 
C) $10000 
D) $6000

Question 14

The collection of an account receivable will increase both cash and accounts receivable.

Accepted Answer

A) True 
 B)False

Question 15

Charles Charcuterie and Cheese Shop purchased 100 pounds of cheese on account for $1250 from Murray's Cheese Shoppe.Analyze the effect of this event on Charles' tabular analysis.

Accepted Answer

A) Increase Cash $1250 and increase Revenue $1250. 
B) Decrease Cash $1250 and increase Expenses $1250. 
C) Increase Accounts Payable $1250 and increases Inventory $1250. 
D) This event is not a transaction entered into the tabular analysis. 
A) Increase Cash $1250 and increase Revenue $1250. 
B) Decrease Cash $1250 and increase Expenses $1250. 
C) Increase Accounts Payable $1250 and increases Inventory $1250. 
D) This event is not a transaction entered into the tabular analysis.

Question 16

On June 1 Barlow Inc.performed services and billed its client Bertram Enterprises $1500.On June 9 Bertram paid the account in full.The combined effect of these two transactions on Barlow's tabular analysis is:

Accepted Answer

A) Increase Cash $1500 and decrease Accounts Receivable $1500. 
B) Increase Cash $1500 and increase Revenues $1500. 
C) Increase Accounts Receivable $1500 and increases Revenues $1500. 
D) Increase Accounts Payable $1500 and increases Expenses $1500. 
A) Increase Cash $1500 and decrease Accounts Receivable $1500. 
B) Increase Cash $1500 and increase Revenues $1500. 
C) Increase Accounts Receivable $1500 and increases Revenues $1500. 
D) Increase Accounts Payable $1500 and increases Expenses $1500.

Question 17

The monetary unit assumption states that transactions that can be measured in terms of money should be recorded in the accounting records.

Accepted Answer

A) True 
 B)False

Question 18

At January 1 2022 Troyer Industries reported Retained Earnings of $350000.During 2022 Troyer had a net loss of $75000 and paid dividends to the stockholders of $50000.At December 31 2022 the balance in Retained Earnings is

Accepted Answer

A) $350000 
B) $300000 
C) $275000 
D) $225000 
A) $350000 
B) $300000 
C) $275000 
D) $225000

Question 19

The most generally accepted measurement value used in accounting is market value.

Accepted Answer

A) True 
 B)False

Question 20

If a company issues common stock for $40000 and uses $30000 of the cash to purchase a truck

Accepted Answer

A) assets will be increased by $10000. 
B) equity will be reduced by $40000. 
C) assets will be increased by $40000. 
D) assets will be unchanged. 
A) assets will be increased by $10000. 
B) equity will be reduced by $40000. 
C) assets will be increased by $40000. 
D) assets will be unchanged.

Which of the following statements is not true?

In order for accounting information to be relevant it must

The economic entity assumption states that economic events can be identified with a particular unit of accountability.

Comstock Company provided consulting services and billed the client $2500.As a result of this event

The economic entity assumption states that assets should be recorded at their cost.

The balance sheet reports assets liabilities and stockholders' equity at a specific date.

Bagley AC Repair Company began August with Accounts Receivable totaling $3200.During August the company performed repair services and billed its customers a total of $11500 and collected amounts due totaling $10200.Use the following tabular analysis to determine the net effect of these transactions.

Accounting information is relevant to business decisions when it

Salaries and Wages Payable is a type of expense.

In general the FASB indicates that most assets must follow the fair value measurement principle.

The quality of consistency enhances

The going concern assumption assumes that the business

On June 1 2022 England Inc.reported a cash balance of $42000.During June England made deposits of $16000 and made disbursements totaling $48000.What is the cash balance at the end of June?

The collection of an account receivable will increase both cash and accounts receivable.

Charles Charcuterie and Cheese Shop purchased 100 pounds of cheese on account for $1250 from Murray's Cheese Shoppe.Analyze the effect of this event on Charles' tabular analysis.

On June 1 Barlow Inc.performed services and billed its client Bertram Enterprises $1500.On June 9 Bertram paid the account in full.The combined effect of these two transactions on Barlow's tabular analysis is:

The monetary unit assumption states that transactions that can be measured in terms of money should be recorded in the accounting records.

At January 1 2022 Troyer Industries reported Retained Earnings of $350000.During 2022 Troyer had a net loss of $75000 and paid dividends to the stockholders of $50000.At December 31 2022 the balance in Retained Earnings is

The most generally accepted measurement value used in accounting is market value.

If a company issues common stock for $40000 and uses $30000 of the cash to purchase a truck

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 statements is not true?

In order for accounting information to be relevant it must

The economic entity assumption states that economic events can be identified with a particular unit of accountability.

Comstock Company provided consulting services and billed the client $2500.As a result of this event

The economic entity assumption states that assets should be recorded at their cost.

The balance sheet reports assets liabilities and stockholders' equity at a specific date.

Accounting information is relevant to business decisions when it

Salaries and Wages Payable is a type of expense.

In general the FASB indicates that most assets must follow the fair value measurement principle.

The quality of consistency enhances

The going concern assumption assumes that the business

On June 1 2022 England Inc.reported a cash balance of $42000.During June England made deposits of $16000 and made disbursements totaling $48000.What is the cash balance at the end of June?

The collection of an account receivable will increase both cash and accounts receivable.

Charles Charcuterie and Cheese Shop purchased 100 pounds of cheese on account for $1250 from Murray's Cheese Shoppe.Analyze the effect of this event on Charles' tabular analysis.

On June 1 Barlow Inc.performed services and billed its client Bertram Enterprises $1500.On June 9 Bertram paid the account in full.The combined effect of these two transactions on Barlow's tabular analysis is:

The monetary unit assumption states that transactions that can be measured in terms of money should be recorded in the accounting records.

At January 1 2022 Troyer Industries reported Retained Earnings of $350000.During 2022 Troyer had a net loss of $75000 and paid dividends to the stockholders of $50000.At December 31 2022 the balance in Retained Earnings is

The most generally accepted measurement value used in accounting is market value.

If a company issues common stock for $40000 and uses $30000 of the cash to purchase a truck

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