Question 1

Source documents are associated with ________.

Accepted Answer

A) Generally Accepted Accounting Principles 
B) implicit transactions 
C) explicit transactions 
D) compound entries 
A) Generally Accepted Accounting Principles 
B) implicit transactions 
C) explicit transactions 
D) compound entries

Question 2

Retained earnings indicate the amount of cash available for distribution to shareholders.

Accepted Answer

A) True 
 B)False

Question 3

On January 1,2010,a company paid $3,000 for rent.The payment covers the period January 1,2010 through June 30,2010.On January 1,2010,what is the effect of this transaction on stockholders' equity?

Accepted Answer

A) increases 
B) decreases 
C) no effect 
D) not enough information to determine 
A) increases 
B) decreases 
C) no effect 
D) not enough information to determine

Question 4

On January 1,2010,New Mexico Company acquired a machine for $33,000.Annual depreciation expense equals $3,000.The residual value of the machine is $3,000.What is the book value of the machine on December 31,2010?

Accepted Answer

A) $3,000 
B) $27,000 
C) $30,000 
D) $33,000 
A) $3,000 
B) $27,000 
C) $30,000 
D) $33,000

Question 5

Most companies that follow accrual basis accounting recognize revenue after they ________.

Accepted Answer

A) receive cash from the customer 
B) deliver goods or perform services 
C) pay cash for operating expenses 
D) provide warranty service on a product 
A) receive cash from the customer 
B) deliver goods or perform services 
C) pay cash for operating expenses 
D) provide warranty service on a product

Question 6

Gamble Company had the following transactions: 1.The owner started the company by investing $8,000 of cash.
2.The company paid $2,000 for six months of rent.The rent was paid in advance.
3.The company acquired $3,300 in inventory and put one-third of the purchase on account.The company paid $2,200 cash.
4.The company sold inventory costing $1,400 for $2,900 on account.
After all these transactions,what is the balance in the cash account?

Accepted Answer

A) $1,600 
B) $3,800 
C) $4,800 
D) $6,700 
A) $1,600 
B) $3,800 
C) $4,800 
D) $6,700

Question 7

San Bernadino Company opened for business on April 1.Given below is the activity of the company for the month of April.   Under accrual basis accounting,what is the net income for the month of April?

Accepted Answer

A) $8,000 
B) $12,000 
C) $18,000 
D) $22,000 
A) $8,000 
B) $12,000 
C) $18,000 
D) $22,000

Question 8

The balance sheet shows a company's financial status at only one point in time.

Accepted Answer

A) True 
 B)False

Question 9

Cash collected from customers before goods are delivered will increase ________.

Accepted Answer

A) assets and increase revenues 
B) revenues and decrease liabilities 
C) liabilities and increase assets 
D) liabilities and decrease revenues 
A) assets and increase revenues 
B) revenues and decrease liabilities 
C) liabilities and increase assets 
D) liabilities and decrease revenues

Question 10

The cash basis of accounting recognizes the impact of transactions in the period when ________.

Accepted Answer

A) revenues and expenses occur 
B) cash is received or disbursed 
C) the accounting equation changes 
D) assets or liabilities change 
A) revenues and expenses occur 
B) cash is received or disbursed 
C) the accounting equation changes 
D) assets or liabilities change

Question 11

Pacer Company has the following information available for the most current year:   What was Pacer Company's net income for the year ended December 31,2010?

Accepted Answer

A) $250,000 
B) $340,000 
C) $390,000 
D) $405,000 
A) $250,000 
B) $340,000 
C) $390,000 
D) $405,000

Question 12

The accrual basis of accounting recognizes the impact of transactions on the financial statements in the period when ________.

Accepted Answer

A) cash is received or disbursed 
B) the accounting equation changes 
C) revenues are earned and expenses are incurred 
D) assets increase 
A) cash is received or disbursed 
B) the accounting equation changes 
C) revenues are earned and expenses are incurred 
D) assets increase

Question 13

Dividends paid are considered an expense on the income statement.

Accepted Answer

A) True 
 B)False

Question 14

San Gabriel Company owns a fixed asset with an original cost of $100,000.The company estimates it will use the fixed asset for four years,at which time it will be sold for $10,000.The book value of the fixed asset after three years of use is ________.

Accepted Answer

A) $32,500 
B) $45,000 
C) $50,000 
D) $100,000 
A) $32,500 
B) $45,000 
C) $50,000 
D) $100,000

Question 15

A cash payment of accounts payable does not affect stockholders' equity.

Accepted Answer

A) True 
 B)False

Question 16

An example of an implicit transaction is cash received on account.

Accepted Answer

A) True 
 B)False

Question 17

Manana Company reports the following information on December 31,2011:   What is total stockholders' equity at December 31,2011?

Accepted Answer

A) $20,000 
B) $80,000 
C) $139,000 
D) $170,000 
A) $20,000 
B) $80,000 
C) $139,000 
D) $170,000

Question 18

What accounts are increased with credits?

Accepted Answer

A) liabilities and assets 
B) liabilities and expenses 
C) liabilities,revenues and paid-in capital 
D) assets and revenues 
A) liabilities and assets 
B) liabilities and expenses 
C) liabilities,revenues and paid-in capital 
D) assets and revenues

Question 19

Land is depreciated using a very long estimated useful life.

Accepted Answer

A) True 
 B)False

Question 20

A sole proprietorship is a business organized as a separate legal entity and owned by its stockholders.

Accepted Answer

A) True 
 B)False

Source documents are associated with ________.

Retained earnings indicate the amount of cash available for distribution to shareholders.

On January 1,2010,a company paid $3,000 for rent.The payment covers the period January 1,2010 through June 30,2010.On January 1,2010,what is the effect of this transaction on stockholders' equity?

On January 1,2010,New Mexico Company acquired a machine for $33,000.Annual depreciation expense equals $3,000.The residual value of the machine is $3,000.What is the book value of the machine on December 31,2010?

Most companies that follow accrual basis accounting recognize revenue after they ________.

San Bernadino Company opened for business on April 1.Given below is the activity of the company for the month of April. Under accrual basis accounting,what is the net income for the month of April?

The balance sheet shows a company's financial status at only one point in time.

Cash collected from customers before goods are delivered will increase ________.

The cash basis of accounting recognizes the impact of transactions in the period when ________.

Pacer Company has the following information available for the most current year: What was Pacer Company's net income for the year ended December 31,2010?

The accrual basis of accounting recognizes the impact of transactions on the financial statements in the period when ________.

Dividends paid are considered an expense on the income statement.

San Gabriel Company owns a fixed asset with an original cost of $100,000.The company estimates it will use the fixed asset for four years,at which time it will be sold for $10,000.The book value of the fixed asset after three years of use is ________.

A cash payment of accounts payable does not affect stockholders' equity.

An example of an implicit transaction is cash received on account.

Manana Company reports the following information on December 31,2011: What is total stockholders' equity at December 31,2011?

What accounts are increased with credits?

Land is depreciated using a very long estimated useful life.

A sole proprietorship is a business organized as a separate legal entity and owned by its stockholders.

Managerial Accounting, the Business Organization

Introduction to Cost Behavior and Cost-Volume Relationships

Measurement of Cost Behavior

Cost Management Systems and Activity-Based Costing

Relevant Information for Decision Making With a Focus

Relevant Information for Decision Making With a Focus

Introduction to Budgets and Preparing the Master Budget

Flexible Budgets and Variance Analysis

Management Control Systems and Responsibility Accounting

Management Control in Decentralized Organizations

Capital Budgeting

Cost Allocation

Accounting for Overhead Costs

Job-Order Costing and Process-Costing Systems

Understanding Corporate Annual Reports: Basic Financial Statements

Understanding and Analyzing Consolidated Financial Statements

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Exam 15: Basic Accounting: Concepts, techniques, and Conventions

Source documents are associated with ________.

Retained earnings indicate the amount of cash available for distribution to shareholders.

On January 1,2010,a company paid $3,000 for rent.The payment covers the period January 1,2010 through June 30,2010.On January 1,2010,what is the effect of this transaction on stockholders' equity?

On January 1,2010,New Mexico Company acquired a machine for $33,000.Annual depreciation expense equals $3,000.The residual value of the machine is $3,000.What is the book value of the machine on December 31,2010?

Most companies that follow accrual basis accounting recognize revenue after they ________.

San Bernadino Company opened for business on April 1.Given below is the activity of the company for the month of April. Under accrual basis accounting,what is the net income for the month of April?

The balance sheet shows a company's financial status at only one point in time.

Cash collected from customers before goods are delivered will increase ________.

The cash basis of accounting recognizes the impact of transactions in the period when ________.

Pacer Company has the following information available for the most current year: What was Pacer Company's net income for the year ended December 31,2010?

The accrual basis of accounting recognizes the impact of transactions on the financial statements in the period when ________.

Dividends paid are considered an expense on the income statement.

San Gabriel Company owns a fixed asset with an original cost of $100,000.The company estimates it will use the fixed asset for four years,at which time it will be sold for $10,000.The book value of the fixed asset after three years of use is ________.

A cash payment of accounts payable does not affect stockholders' equity.

An example of an implicit transaction is cash received on account.

Manana Company reports the following information on December 31,2011: What is total stockholders' equity at December 31,2011?

What accounts are increased with credits?

Land is depreciated using a very long estimated useful life.

A sole proprietorship is a business organized as a separate legal entity and owned by its stockholders.

Managerial Accounting, the Business Organization

Introduction to Cost Behavior and Cost-Volume Relationships

Measurement of Cost Behavior

Cost Management Systems and Activity-Based Costing

Relevant Information for Decision Making With a Focus

Relevant Information for Decision Making With a Focus

Introduction to Budgets and Preparing the Master Budget

Flexible Budgets and Variance Analysis

Management Control Systems and Responsibility Accounting

Management Control in Decentralized Organizations

Capital Budgeting

Cost Allocation

Accounting for Overhead Costs

Job-Order Costing and Process-Costing Systems

Understanding Corporate Annual Reports: Basic Financial Statements

Understanding and Analyzing Consolidated Financial Statements

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