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

  1. 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.

  1. 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.

  1. 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.

  1. 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.

  1. 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.

  1. 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.

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

a.

b.

c.

d.

  1. 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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