106 free test bank for financial accounting 3rd editio1 Đề thi trắc nghiệm có đáp án

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106 Free Test Bank for Financial Accounting 3rd Edition

Alicia owns a sporting goods store In her accounting records, she included her personal computer and all of her personal sporting gear Alicia is violating what principle of accounting?

1 A) All businesses are the same with regard to owner liability

2 B) Limited liability company

3 C) Buildings

4 D) Cash

Which of the following is an advantage of a sole proprietorship?

1 A) Ease of formation

2 B) Limited liability of owner

3 C) Ease of raising capital

4 D) All of the above are stakeholders

Assets are defined as:

1 A) earnings retained in the business

2 B) amounts owed to others

3 C) stockholders' claims to assets

4 D) economic resources of a company

Caesar's Coffee sells bagged coffee to grocery stores for resale— what type of business is this?

1 A) Service business

2 B) Wholesale business

3 C) Retail business

4 D) None of the above

Which of the following has double taxation of earnings?

1 A) Limited liability company

2 B) Proprietorship

3 C) Corporation

4 D) Partnership

Which of the following types of organization would primarily sell goods?

1 A) Merchandising business

2 B) Service business

3 C) Manufacturing business

4 D) Both Merchandising and Manufacturing businesses sell goods

Which of the following does NOT describe Stockholders' Equity?

1 A) Profits retained in the business

2 B) Money lent to a business

3 C) The owners' claim on the assets of a company

4 D) Money invested in a business by its owners

According to the textbook, in order for an organization to be called a business it must:

1 A) exchange a product with a customer

2 B) make money

3 C) be a corporation

4 D) provide a service

Go Fresh delivery recorded their delivery van at its current

replacement value, rather than the price paid for the van What principle did they violate?

A hybrid business entity with characteristics of both a corporation and a partnership is called:

4 D) Limited liability companies

Which of the following types of organizations would produce

Liabilities are defined as:

1 A) earnings retained in the business

2 B) amounts owed to lenders

3 C) stockholders' claims to assets

4 D) future economic benefits of a company

Which of the following impacts the value of an item to its owner?

1 A) When the owner expects to receive something in exchange for the item

2 B) How certain the owner is about what and when they will receive something

in exchange for the item

3 C) What the owner expects to receive in exchange for the item

4 D) All of the above

The expense of using borrowed money for a period of time, is

Net income is defined as:

1 A) revenue plus expenses

2 B) revenue less assets

3 C) expenses less revenue

4 D) revenue less expenses

Home Depot would primarily be considered a:

4 D) limited liability company.

Which type of business organization is owned by its stockholders?

1 A) Corporation

2 B) Partnership

3 C) Limited liability company

4 D) Sole proprietorship

Owner's Equity represents:

1 A) an initial investment of cash by the owners

2 B) a fair distribution of wealth in the firm

3 C) retention of profits by a firm

4 D) all of the above

5 E) A and C only

What do we call the result obtained when revenue is less than

4 D) None of the above

Which type of organization is NOT considered a not-for-profit?

1 A) Charities

2 B) Churches

3 C) Chinese restaurant

4 D) All of the above are not-for-profits

A tax preparation business is primarily a:

1 A) merchandising operation

2 B) service operation

3 C) not-for-profit operation

4 D) manufacturing operation

106 Free Test Bank for Financial Accounting 3rd Edition

by Kemp Multiple Choice Questions - Page 2

FASB is made up of how many members?

1 A) 3

2 B) 5

3 C) 7

4 D) 9

A company has Liabilities of $23,500 and Stockholders' Equity of

$56,500 How much does the company have in Assets?

1 A) Increase in Assets; increase in Stockholders' Equity

2 B) Increase in Liabilities; increase in Stockholders' Equity

3 C) Decrease in Assets; increase in Stockholders' Equity

4 D) Increase in Assets; decrease in Stockholders' Equity

In the financial accounting records, most assets should be reported at:

1 A) current replacement cost

2 B) current market value

3 C) historical cost

4 D) inflation-adjusted cost

IFRS stands for:

1 A) Internal Financial Report Standards

2 B) International Financial Reports Study

3 C) Internal Financial Reports Study

4 D) International Financial Reporting Standards

An increase in revenues would have which of the following effects

on the accounting equation?

1 A) Decrease Stockholders' Equity

2 B) Increase Common Stock

3 C) Increase Liabilities

4 D) Increase Stockholders' Equity

A business purchases a computer for cash What effect does this have on the accounting equation?

1 A) Stockholders' Equity and Assets go up

2 B) There is no change in Total Assets

3 C) Assets go up and Liabilities go down

4 D) Stockholders' Equity and Liabilities go up

Accountants who ignore the effect of inflation on prices may be violating which accounting principle?

1 A) items owned by the company

2 B) economic resources of the company

3 C) earnings kept in the business

4 D) amounts owed to third parties

Consider Accounts Receivable and Accounts Payable Which of the following statements is TRUE?

1 A) Accounts Receivable is a liability and Accounts Payable is an asset

2 B) Accounts Receivable is an asset and Accounts Payable is an asset

3 C) Accounts Receivable is an asset and Accounts Payable is a liability

4 D) Accounts Receivable is a liability and Accounts Payable is a liability

Sylvia borrowed money for her business from a local bank What accounts will be affected?

1 A) Cash and Accounts Payable

2 B) Cash and Notes Payable

3 C) Accounts Payable and Revenue

4 D) Accounts Receivable and Revenue

Which of the following is considered an asset?

The method of accounting that recognizes a transaction when cash

is received or paid is:

1 A) financial accounting

2 B) cash accounting

4 D) Cannot be determined from the given information

GAAP is the acronym for generally accepted principles

1 A) auditing

2 B) accounting

3 C) averaging

4 D) associated

Taking an inventory of goods on hand would be representative of what accounting concept or principle?

4 D) Not enough information provided

Which accounting concept or principle specifically states that we should record transactions that can be verified?

1 A) Going-concern concept

2 B) Cost principle

3 C) Reliability principle

4 D) Business entity concept

The owner of Good Dog Daycare wrote a company check to pay her personal credit card bill What accounting principle did she violate?

1 A) Cost

2 B) Reliability

3 C) Business entity

4 D) No principle is violated—the bank account belongs to her, so it's okay to write checks.

Revenues, expenses and dividends are all a part of:

1 A) Acme mows 125 lawns

2 B) Acme buys 5 new lawn mowers from Lawn Equipment, Inc

3 C) Lawn Equipment, Inc sells 2 mowers to Acme's competitor, Best Lawns, Inc

4 D) Events A and B should both be recorded in the financial accounting records of Acme

The guidelines that describe the rules of accounting are called:

1 A) GAAS

2 B) GAAP

4 D) All of the above

5 E) None of the above

The accounting principle that best defines a business is:

1 A) business entity

2 B) cost

3 C) reliability

4 D) going concern

106 Free Test Bank for Financial Accounting 3rd Edition

by Kemp Multiple Choice Questions - Page 3

Beginning Retained Earnings for the period would be shown on the:

1 A) Statement of Retained Earnings

2 B) Income Statement

3 C) Balance Sheets

4 D) Statement of Cash Flows

Beginning Retained Earnings are $65,000; sales are $29,500;

expenses are $33,000; and dividends paid are $3,500 How much

is the amount in ending Retained Earnings?

1 A) $58,000

2 B) $61,500

3 C) $68,500

4 D) $65,000

Which of the following would be reported in the Investing Activities section of the Statement of Cash Flows?

1 A) Sale of common stock

2 B) Purchase of equipment

3 C) Payment of dividends

4 D) Both A and C would be in this section

A company purchases supplies for cash What is the net result on the accounting equation?

1 A) Total Assets will go up and total Liabilities will go down

2 B) Total Assets will go up and Stockholders' Equity will go up

3 C) Total Assets will not change

4 D) Total Liabilities will go up

How would the purchase of a computer on account affect the

accounting equation?

1 A) Assets increase; Liabilities decrease

2 B) Assets increase; Stockholder Equity increases

3 C) Assets increase; Liabilities increase

4 D) Assets decrease; Liabilities increase

Payables are classified as:

Dividends are part of:

1 A) Total Assets and total Liabilities will increase

2 B) Total Assets and total Revenue will increase

3 C) Total Liabilities will increase and total Revenue will decrease

4 D) Total Assets will decrease and total Liabilities will increase

A Statement of Cash Flows is usually prepared:

1 A) increase Liabilities and increase Assets

2 B) decrease Liabilities and increase Assets

3 C) increase Assets and increase Stockholders' Equity

4 D) increase Liabilities and decrease Stockholders' Equity

Paloma's Plumbing buys a new van for the business using cash The accounts affected are:

1 A) Increase cash and increase Equipment

2 B) Decrease cash and increase Equipment

3 C) Increase Equipment and increase Stockholders' Equity

4 D) Decrease cash and decrease Stockholders' Equity

Net income or loss is originally shown on the:

1 A) Statement of Cash Flows

4 D) Statement of Cash Flows

If Total Assets remain the same and Total Stockholders' Equity increases, Liabilities will:

1 A) increase by the same amount

2 B) decrease by the same amount

3 C) remain the same

4 D) increase by a different amount

Amounts owed to a company by its customers are classified as:

1 A) payables.

2 B) dividends

3 C) cash

4 D) receivables

Which of the following is TRUE regarding revenue and profit?

1 A) The terms revenue and profit mean the same thing

2 B) Both revenue and profit are found on the Income Statement

3 C) Profit equals liabilities plus Stockholders' Equity

4 D) Revenue is found on the Balance Sheet and profit is found on the Income Statement

The first financial statement that is prepared is the:

1 A) Statement of Cash Flows

4 D) Increase Stockholders' Equity

Beginning Retained Earnings are $31,000; sales are $46,800; expenses are $43,500 and dividends paid are $2,800 How much is the net income or loss for the company?

1 A) $3,300

2 B) $500

3 C) $34,300

4 D) ($3,300)

A net loss will:

1 A) decrease Retained Earnings

2 B) increase Retained Earnings.

3 C) force the company into bankruptcy

4 D) force the company to pay dividends

Tumbler, Inc purchased office supplies on account for $40,000 How would this transaction affect Tumbler's accounting equation?

1 A) Increase Assets and Stockholders' Equity by $40,000

2 B) Increase Liabilities and Stockholders' Equity by $40,000

3 C) Increase Assets by $40,000 and decrease Liabilities by $40,000

4 D) Increase Assets by $40,000 and increase Liabilities by $40,000

Crispy's is famous for their cupcakes Crispy'sTotal Assets were

$345,000, and Total Liabilities were $129,500 How much was

Crispy's Stockholders' Equity?

1 A) $474,500

2 B) $345,000

3 C) $215,500

4 D) Some other number

In the expanded accounting equation, revenues minus expenses are part of:

4 D) Statement of Retained Earnings

Dillon invested $5,000 into his business He would:

1 A) increase Cash and increase Stockholders' Equity.

2 B) decrease Cash and increase Stockholders' Equity

3 C) increase Liabilities and increase Stockholders' Equity

4 D) increase Cash only

Beginning Retained Earnings are $65,000; sales are $29,500; expenses are $33,000 and dividends paid are $3,500 How much is the net income or loss for the company?

1 A) $26,000

2 B) ($3,500)

3 C) ($7,000)

4 D) $0

Of the financial statements, which is dated as of a specific date?

1 A) Statement of Cash Flows

2 B) Income Statement

3 C) Balance Sheet

4 D) Statement of Retained Earnings

Which of the following financial statements illustrates the

accounting equation?

1 A) Statement of Retained Earnings

2 B) Income Statement

3 C) Balance Sheet

4 D) Statement of Cash Flows

Beginning Retained Earnings are $31,000; sales are $46,800; expenses are $43,500; and dividends paid are $2,800 How much

is the amount in ending Retained Earnings?

1 A) results of operations for a specific date.

2 B) the financial position on a specific date

3 C) results of operations for a specific period

4 D) the financial position for a specific period

Which of the following is a FALSE statement?

1 A) Revenues provide inward flows of assets

2 B) Revenue is categorized as an asset

3 C) Revenue is categorized as part of Retained Earnings

4 D) Revenues are generated from the sale of goods and services

The net income figure is needed to prepare:

1 A) a Balance Sheet

2 B) a Statement of Retained Earnings

3 C) a Statement of Liabilities

4 D) some other report

Payables are categorized as:

1 A) Liabilities

2 B) Assets

3 C) Retained Earnings

4 D) Common Stock

Which of the following is a TRUE statement?

1 A) Purchasing office equipment for cash is a shift of Assets

2 B) Buying something on account decreases total Liabilities

3 C) Retained Earnings do not include payments of dividends

4 D) Paying off an account increases the total of Assets

The Balance Sheet is used to report:

1 A) results of operations for a specific date

2 B) the financial position on a specific date

3 C) results of operations for a specific period

4 D) the financial position for a specific period