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60 Cards in this Set

  • Front
  • Back
Which of the following financial statements is for a particular date rather than a period of time?
A) The income statement.
B) The cash flow statement.
C) The statement of retained earnings.
D) The balance sheet.
D
Which of the following items would be shown as part of the Stockholder's Equity on the balance sheet?
A) Cash
B) Notes Payable
C) Retained Earnings
D) Accounts Receivable
C
3
Assets equal $450,000, liabilities equal $120,000, and contributed capital equals $200,000. What is the dollar amount of retained earnings?
A) $80,000
B) $330,000
C) $320,000
D) $130,000
D
4
A company sold $400,000 of merchandise for cash and $120,000 of merchandise on credit to customers who will pay for the merchandise in a later time period. How much revenue should be reported on the income statement of the current time period?
A) $280,000
B) $520,000
C) $400,000
D) $120,000
B
.5
The beginning balance of retained earnings was $7,500. The dividends paid to stockholders' were $1,500. The ending balance of retained earnings is $5,000. What was the net income or net loss for the accounting period?
A) net loss of $1,000
B) net income of $1,000
C) net loss of $2,000
D) net income of $2,500
A
6
Which cash flow activity is related to borrowing money on a long-term basis?
A) operating activities
B) investing activities
C) financing activities
D) investing and financing activities
C
7
Which of the following transactions would be considered an investing activity on a Statement of Cash Flows?


A) A
B) B
C) C
D) D
A
9
Which organization has primary responsibility for developing United States' generally accepted accounting principles (GAAP)?
A) American Institute of Certified Public Accountants (AICPA)
B) Financial Accounting Standards Board (FASB)
C) Securities and Exchange Commission (SEC)
D) Internal Revenue Service (IRS)
B
10
The primary purpose of an audit (examination) of the financial reports of a company is to:
A) uncover fraud.
B) determine who is guilty of malpractice.
C) determine whether the financial reports conform to GAAP.
D) examine every document and transaction to verify it was accurately reported
C
8
Which of the following would not appear on an income statement?
A) Sales revenue
B) Accounts payable
C) Rent expense
D) Cost of goods sold
B
1
The major objective of financial reporting is to provide
A) essential information to internal users of financial reports.
B) useful economic information about the business to help external parties make sound financial decisions.
C) information to internal users about the cash position of the business.
D) information to the IRS and the Securities Exchange Commission (SEC).
B
2
Which of the following is not necessary for information to be considered useful?
A) relevancy
B) comparability
C) consistency
D) predictability
D
3
A company purchased a computer, office furniture, and office supplies by issuing a check for $5,000 and a note payable for $19,500. The list price of the items was $26,300. The total recorded value of the items is
A) $26,300
B) $19,500
C) $24,500
D) $31,300
c
4
Liabilities are listed on the balance sheet in
A) order of their relative dollar size.
B) order of their maturity.
C) alphabetical order.
D) no particular order.
b
5
Cost of Goods Sold is classified as which type of account?
A) asset
B) liability
C) revenue
D) expense
d
6
Retained Earnings is classified as which type of account?
A) asset
B) liability
C) stockholders' equity
D) expense
c
7
A company purchased office supplies on credit. What two accounts are affected by the transaction?
A) Supplies and Cash
B) Supplies and Accounts Payable
C) Equipment and Accounts Payable
D) Stockholders' Equity and Accounts Payable
b
8
A company sold 10,000 shares of its common stock for a total of $45,000. What two accounts are affected by the transaction?
A) Cash and Retained Earnings
B) Cash and Revenue
C) Cash and Contributed Capital
D) Cash and Accounts Receivable
c
9
A company purchased office equipment by issuing a short-term note payable. What two accounts were affected by the transaction?
A) Equipment and Cash
B) Equipment and Accounts Payable
C) Equipment and Notes Payable
D) Equipment and Stockholders' Equity
c
10
A company declares a cash dividend to be paid to its stockholders next month. The effect of the transaction is to:
A) Decrease assets and liabilities.
B) Increase assets and stockholders' equity.
C) Decrease assets and stockholders' equity.
D) Increase liabilities and decrease stockholders' equity.
d
1
Which type of company usually has a long operating cycle?
A) restaurant
B) grocery
C) ship builder
D) clothing store
C
2
Consider the following totals:

What was the total of operating income?
A) $42,000
B) $55,000
C) $60,000
D) $37,000
c
3
The matching principle
A) Matches revenues to a time period
B) Matches expenses to a customer
C) Matches costs to a product
D) Matches revenues with expenses
d
4
Current year sales revenues total $1,250,000. The total assets at the end of the previous year totaled $900,000. Total assets at the end of the current year totaled $980,000. What is the asset turnover ratio?
A) 1.330
B) 1.389
C) 1.276
D) 1.156
a
5
Brenden's Pizza sold $25,000 worth of pizzas in 2011. They received $15,000 in cash and the balance of $10,000 will be paid in 2012. The reported revenues for 2011 are
A) $15,000
B) $25,000
C) $10,000
D) $5,000
b
6
Which of the following accounts would be increased with a debit?
A) Contributed Capital
B) Retained Earnings
C) Revenues
D) Expenses
d
7
Langhurst Company received $2,000 in supplies. They paid for half. What is the journal entry to record the transaction?
A)
B)
C)
D)
d
8
On January 1, Langhurst Company paid $6,000 for insurance for the next two years. What is the correct journal entry for recording the January 1 transaction?
A)
B)
C)
D)
c
9
In January, Langhurst Company paid $9,000 for utilities, repairs, and maintenance of delivery vehicles. Which of the following is the correct journal entry for recording this transaction?
A)
B)
C)
D)
c
10
Consider the following information provided in no particular order:

What is the dollar amount of the net income?
A) $36,000
B) $15,000
C) $17,000
D) $19,000
d
1
Which of the following groups of accounts would appear in the credit column of an unadjusted trial balance?
A) Accounts Payable, Unearned Revenues, Cost of Sales, and Investment Income.
B) Unearned Revenues, Accumulated Depreciation, and Prepaid Expenses.
C) Accounts Payable, Unearned Revenues, and Accumulated Depreciation.
D) Contributed Capital, Retained Earnings, and Cost of Sales.
C
2
How is net book value calculated?
A) acquisition cost of the asset minus its accumulated depreciation
B) acquisition cost of the asset minus its depreciation expense
C) estimated value of the asset minus its accumulated depreciation
D) acquisition cost of the asset plus it accumulated depreciation
a
3
At the beginning of the year, CJ's had $700 worth of supplies. During the year, they purchased $250 worth of supplies. At the end of the year, CJ's had $150 worth of supplies. What adjusting entry does CJ need on December 31 to record the amount of supplies used during the year?
A)
B)
C)
D)
d
4
On September 1, Foxy's paid $1,200 for one year's rent in advance. What is Foxy's adjusting journal entry on December 31?
A)
B)
C)
D)
d
5
If the accountant forgets to adjust the Prepaid Expenses account, there will be:
A) an understatement of net income.
B) an overstatement of net income.
C) an overstatement of expense.
D) no under- or overstatement of net income.
b
6
Employees are paid $2,400 on every Friday for a five-day workweek. The accounting period ends on Wednesday, December 31. The adjusting entry for the salaries and benefits expense on December 31 would be:
A)
B)
C)
D)
d
7
Which of the following is TRUE about every adjusting entry?
A) They affect only income statement accounts.
B) They affect a balance sheet account and an income statement account.
C) They affect only balance sheet accounts.
D) They can affect cash.
b
8
The net income available to stockholders is $230,000. The beginning number of common shares outstanding was 100,000. The ending number of common shares outstanding was 150,000. What is the earnings per share?
A) $1.84
B) $2.30
C) $1.533
D) $0.543
a
9
Consider the following:
Lumber Revenues

$120,000

Hardware Revenues

$90,000

Cost of Sales

$130,000

All other costs and expenses

$35,000

Investment Income

$8,000

Income Tax Expense

$13,000

Net income

$40,000

What is the net profit margin?
A) 24.31%
B) 24.24%
C) 18.34%
D) 19.05%
d
10
Which account would be listed on a post-closing trial balance?
A) Sales Revenue
B) Depreciation Expense
C) Retained Earnings
D) Income Tax Expense
c
1
Conservatism means you should avoid
A) Understating assets and revenues
B) Overstating liabilities and expenses
C) Overstating assets and revenues
D) Overstating revenues and expenses
c
2
Which of the following is not included in the financial section of an annual report?
A) Financial Statements
B) Report of the independent auditor
C) Notes to the financial statements
D) Predictions about future sales growth
d
3
Consider the following:

Which line of the chart shows an incorrect financial-statement classification?
A) Line A
B) Line B
C) Line C
D) Line D
c
4
Which of the following is not a form filed with the SEC?
A) 10-Q
B) 10-K
C) 8-K
D) 8-P
d
5
A corporation issued for cash 100,000 shares of its $0.01 par value common stock for $450,000. Which of the following is the correct journal entry to record this transaction?
A) Cash, debit, $450,000; Common Stock, credit, $450,000
B) Cash, debit, $450,000; Common Stock, credit, $45,000; Paid-in Capital, credit, $405,000
C) Cash, debit, $450,000; Common Stock, credit, $1,000; Paid-in Capital, credit, $449,000
D) Cash, debit, $450,000; Paid-in Capital, credit, $450,000
c
6
What is the gross profit calculation?
A) Sales minus cost of goods sold
B) Revenues minus expenses
C) Assets equals liabilities plus equity
D) Equipment minus accumulated depreciation
a
7
Which of the following is NOT an operating expense?
A) Salaries and Benefits expense
B) Rent expense
C) Interest expense
D) Depreciation expense
c
8
Net income is $450,000. Beginning and ending total assets are $4,000,000 and $4,800,000, respectively. What is the return on assets?
A) 9.4%
B) 10.23%
C) 11.25%
D) 10.41%
b
9
Return on assets measures:
A) How much the firm earned for each dollar owed.
B) How much the firm earned for each dollar of investment.
C) How much of every sales dollar is profit.
D) How much a company should charge for their products.
b
10
If total equity = $100,000, total liabilities = $70,000 and noncurrent assets = $20,000, how much are current assets?
A) $150,000
B) $50,000
C) $10,000
D) $190,000
a
1
Sales returns and allowances are reported on the income statement as:
A) a contra revenue.
B) a contra asset.
C) a selling expense.
D) a revenue.
A
2
You received an invoice that shows credit terms of 2/10, n/60. What does the number 10 in the credit terms refer to?
A) the number of days in the credit period.
B) the amount of sales discount available.
C) the number of days in the discount period.
D) the amount of the trade discount.
c
3
A customer, who is given credit terms of 2/10, n/60, purchased goods with a retail price of $600. The amount charged to the customer's account receivable was:
A) $612.00.
B) $600.00.
C) $588.00.
D) $601.20.
b
4
On July 1, Jakes' Jerky sold 5 pounds of jerky for $50 with the terms 3/10, n/30. On July 8, Jakes' received payment for the jerky. What journal entry did Jake make on July 8?
A)
B)
C)
D)
c
5
The unadjusted credit balance of the Allowance for Doubtful Accounts account is $650. Uncollectible accounts are estimated to be $15,600, based on an analysis of a schedule of aging of accounts receivable. After recording the appropriate journal entry for the bad debts expense, what will be the adjusted balance of the Allowance for Doubtful Accounts?
A) $650
B) $16,250
C) $14,950
D) $15,600
d
6
The unadjusted debit balance of the Allowance for Doubtful Accounts account is $350. Uncollectible accounts are estimated to be $15,800, based on the percent of sales method. After recording the appropriate journal entry for the bad debts expense, what will be the balance of the Bad Debt Expense account?
A) $15,800
B) $15,450
C) $16,150
D) $350
a
7
The unadjusted credit balance of the Allowance for Doubtful Accounts account is $350. Uncollectible accounts are estimated to be $15,800, based on an analysis of a schedule of aging of accounts receivable. After recording the appropriate journal entry for the bad debts expense, what will be the balance of the Bad Debt Expense account?
A) $15,800
B) $15,450
C) $16,150
D) $350
b
8
When using the indirect method of preparing the "cash flows from operating activities" section of a statement of cash flows, a net increase between the beginning and ending balances of net accounts receivable will
A) be added to net income.
B) be deducted from net income.
C) not be considered.
D) be shown as deferred revenues.
b
9
The proper treatment of outstanding checks on the bank reconciliation requires:
A) adding them back to the book balance of cash.
B) adding them back to the bank balance of cash.
C) deducting them from the book balance of cash.
D) deducting them from the bank balance of cash.
d
10
The proper treatment on the bank reconciliation of NSF checks returned with the statement is to
A) add them to the book balance of cash.
B) add them to the bank balance of cash.
C) deduct them from the book balance of cash.
D) deduct them from the bank balance of cash.
c