Fundamental Quiz, Accounting Homework Help

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1. Which of
the following is not a function performed by an accountant?

	a.	Measure economic events in financial terms.
	b.	Report economic events in financial statements.
	c.	Records economic activities of a business.
	d.	Observe events.

1. Which
financial statement explains the changes in retained earnings between two
dates?

	a.	Balance sheet.
	b.	Statement of retained earnings.
	c.	Income statement.
	d.	Statement of cash flows

3.Which of these is the basic accounting equation?

	a.	Liabilities + assets = equities.
	b.	Revenues – expenses = net income.
	c.	Assets – revenues = equities.
	d.	Assets = liabilities + equities

Which
underlying concept assumes that a business entity will continue operations
indefinitely?

	a.	Periodicity concept.
	b.	Going concern concept.
	c.	Business entity concept.
	d.	Money measurement concept.

Which
statement is true regarding the rules of debit and credit for accounts?

	a.	Assets are credited for decreases.
	b.	Liabilities are credited for decreases.
	c.	Revenues are debited for increases.
	d.	Expenses are credited for increases.

When
stockholders invest cash in the business:

	a.	Capital stock is debited and cash is credited.
	b.	Cash is debited and dividends is credited.
	c.	Cash is debited and capital stock is credited.
	d.	Capital stock is debited and dividends is credited.

Which of the following is the final step in
the accounting cycle?

	a.	Prepare financial statements.
	b.	Post journal entries to the ledger.
	c.	Prepare a trial balance of the accounts.
	d.	Prepare a post-closing trial balance.

When a
business earns revenue and receives cash, which of the following is true?

	a.	Cash is debited and revenue is credited.
	b.	Revenue is debited and cash is credited.
	c.	Accounts receivable is debited and revenue is credited.
	d.	Revenue is debited and a liability is credited.

Which of
the following cash payments would involve the immediate recording of an
expense?

	a.	Paid vendors for office supplies previously purchased on account.
	b.	Paid an automobile dealer for a new company auto.
	c.	Paid the current month’s rent.
	d.	Paid salaries for the last half of the current month.

1. Under
which business ownership type do the owners not
directly manage the business?

	a.	Single proprietorship.
	b.	Corporation.
	c.	Partnership.
	d.	Limited partnership.

11. Which of the following is true regarding the accrual
basis of accounting?

	a.	Revenues are recognized as cash is received.
	b.	Expenses are recognized as cash is paid.
	c.	The purchase of a building would be debited to an expense.
	d.	Revenue is recorded at the time the company performs the service.

Which of
the underlying principles most applies to the need for adjusting entries?

	a.	Business entity.
	b.	Going concern.
	c.	Full disclosure.
	d.	Matching.

Which
of the following is an example of an adjustment for deferred items?

	a.	A prepaid expense.
	b.	An accrued revenue.
	c.	An accrued liability.
	d.	Unbilled training fees.

14. Of the following steps in the closing process, which
represents closing the dividends account?

	a.	Transferring its balance to income summary.
	b.	Transferring its balance to retained earnings.
	c.	Transferring its balance to a revenue account.
	d.	Transferring its balance to an expense account.

15. After
the closing process is complete, which of the following accounts will most
likely have a balance remaining?

	a.	Dividends.
	b.	A revenue account.
	c.	A liability account.
	d.	An expense account.

16. Which
of the following is a category of accounts on a classified balance sheet?

	a.	Cash.
	b.	Accounts payable.
	c.	Long-term assets.
	d.	Retained earnings.

17. Which
of the following basic accounting concepts generally requires a company to use
the same accounting principles and reporting practices through time?

	a.	Periodicity.
	b.	Consistency.
	c.	Stable dollar.
	d.	Going concern.

18. Of
the following principles, which one allows companies to prepare only one set of
financial statements?

	a.	Consistency.
	b.	Double entry.
	c.	General-purpose financial statements.
	d.	Business entity.

19. The
assumption that each business has an existence separate from its owners,
creditors, employees, customers, and other interested parties, and other
businesses is the:

	a.	Going concern assumption.
	b.	Business entity concept.
	c.	Separate entity concept.
	d.	Corporation concept.

20.Which of the following accounts would be found in a
merchandising business accounting system?

	a.	Sales returns and allowances.
	b.	Transportation-in.
	c.	Purchase discounts.
	d.	All of the accounts would be found.

21. When
a sale of merchandise is on account, which entry should be made?

	a.	Debit cash and credit sales..
	b.	Debit accounts receivable and credit sales.
	c.	Debit accounts payable and credit income.
	d.	Debit retained earnings and credit sales.

22. The formula for calculating cost of goods sold is which of
the following?

	a.	Beginning inventory – net purchases + ending inventory.
	b.	Purchases – purchase discounts + transportation-in.
	c.	Net sales – operating expenses.
	d.	Beginning inventory + net purchases – ending inventory.

23. Which
inventory valuation method is a more precise matching of historical cost with
revenue?

	a.	FIFO.
	b.	LIFO.
	c.	Weighted average.
	d.	Net realizable value.

24. The
inventory turnover ratio compares which two figures?

	a.	Net sales and average inventory.
	b.	Net income and average inventory.
	c.	Cost of goods sold and average inventory.
	d.	Cost of goods sold and net sales.

25. During
a period of rising prices, which inventory method could provide a business with
the greatest net come?

	a.	Weighted-average.
	b.	Specific identification.
	c.	LIFO.
	d.	FIFO.

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