ACC280/ACC 280 Final Answers Exam - 89714

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Question1) The accounting process is correctly sequenced as A. identification, communication, recording B. recording, communication, identification C. identification, recording, communication D. communication, recording, identification 2) Bookkeeping differs from accounting in that bookkeeping primarily involves which part of the accounting process? A. Identification B. Communication C. Recording D. Analysis 3) Generally accepted accounting principles are A. income tax regulations of the Internal Revenue Service B. standards that indicate how to report economic events C. theories that are based on physical laws of the universe D. principles that have been proven correct by academic researchers 4) The private sector organization involved in developing accounting principles is the A. Feasible Accounting Standards Body B. Financial Accounting Studies Board C. Financial Accounting Standards Board D. Financial Auditors' Standards Body 5) GAAP stands for A. Generally Accepted Auditing Procedures B. Generally Accepted Accounting Principles C. Generally Accepted Auditing Principles D. Generally Accepted Accounting Procedures 6) The four primary financial statements are A. the general ledger, the working trial balance, the general journal and the balance sheet B. the balance sheet, the working trial balance, the income statement and the statement of cash flows C. the cash account, the statement of stockholder’s equity, the year-end worksheet, and the balance sheet D. the balance sheet, the income statement, the statement of stockholder’s equity and the statement of cash flows 7) Which of the following financial statements is a point in time report? A. Balance sheet B. Income statement C. Statement of stockholder's equity D. Statement of cash flows 8) In recording an accounting transaction in a double-entry system, A. the number of debit accounts must equal the number of credit accounts B. there must always be entries made on both sides of the accounting equation C. the amount of the debits must equal the amount of the credits D. there must only be two accounts affected by any transaction 9) An account will have a credit balance if the A. credits exceed the debits B. first transaction entered was a credit C. debits exceed the credits D. last transaction entered was a credit 10) Which of the following statements is true? A. Debits increase assets and increase liabilities. B. Credits decrease assets and decrease liabilities. C. Credits decrease assets and increase liabilities. D. Debits decrease liabilities and decrease assets. 11) On June 1, 2008, Leno Inc. buys a copier machine for its business and finances this purchase with cash and a note. When journalizing this transaction, the company's accountant will A. use two journal entries B. make a compound entry C. make a simple entry D. list the credit entries first, which is proper form for this type of transaction 12) Posting of journal entries should be done in A. account number order B. alphabetical order C. chronological order D. dollar amount order 13) Bank errors A. occur because of time lags B. must be corrected by debits C. are infrequent in occurrence D. are corrected by making an adjusting entry on the depositor's books 14) A $2,000 advance payment for a 1-year insurance is recorded as A. Insurance expense $2,000Cash $2,000 B. Cash $2,000Insurance expense $2,000 C. Prepaid insurance $2,000Cash $2,000 D. Prepaid insurance $2,000Insurance expense $2,000 15) Carson company purchased a 2-year insurance policy for $4,800 on January 1, 2010. The $4,800 was debited to the Prepaid Insurance account. What adjustment should be made to record expired insurance January 31, 2010? A. Debit insurance expense and credit prepaid insurance for $2,400. B. Debit prepaid insurance and credit insurance expense for $200. C. Debit prepaid insurance and credit insurance expense for $400. D. Debit insurance expense and credit prepaid insurance for $200. 16) Can financial statements be prepared directly from the adjusted trial balance? A. No, they cannot. The general ledger must be used. B. Yes, adjusting entries have been recorded in the general journal and posted to the ledger accounts. C. No, the adjusted trial balance merely proves the equality of the total debit and total credit balances in the ledger after adjustments are posted. It has no other purpose. D. Yes, they can because that is the only reason that an adjusted trial balance is prepared. 17) The information for preparing a trial balance on a worksheet is obtained from A. financial statements B. general ledger accounts C. general journal entries D. business documents 18) If the total debit column exceeds the total credit column of the income statement columns on a worksheet, then the company has A. earned net income for the period B. an error because debits do not equal credits C. suffered a net loss for the period D. to make an adjusting entry 19) After all of the account balances have been extended to the income statement columns of the work sheet, the totals of the debit and credit columns are $50,000 and $40,000, respectively. What is the amount of net income or net loss for the period? A. $10,000 net income B. $10,000 net loss C. $50,000 net income D. $90,000 net income 20) The income summary account A. is a permanent account B. appears on the balance sheet C. appears on the income statement D. is a temporary account 21) Which of the following is an income statement account? A. Revenue B. Salaries payable C. Cash D. Accounts payable 22) Which of the following is a balance sheet account? A. Sales revenue B. Salaries payable C. Salaries expense D. Service revenue 23) In order to close the dividends account, the A. income summary account should be debited B. income summary account should be credited C. retained earnings account should be credited D. retained earnings account should be debited 24) In preparing closing entries, A. each revenue account will be credited B. each expense account will be credited C. the retained earnings account will be debited if there is net income for the period D. the dividends account will be debited 25) Profit margin is a measure of A. liquidity B. profitability C. solvency D. risk 26) Working capital is A. net income divided by sales B. current assets minus current liabilities C. current assets divided by current liabilities D. total debt divided by total assets 27) Internal control is defined, in part, as a plan that safeguards A. all balance sheet accounts B. assets C. liabilities D. capital stock 28) Having one person post entries to accounts receivable subsidiary ledger and a different person post to the Accounts Receivable Control account in the general ledger is an example of A. inadequate internal control B. duplication of effort C. external verification D. segregation of duties 29) Certified Public Accounting firms that audit public companies are reviewed by A. The Securities and Exchange Commission B. The American Institute of Certified Public Auditors C. The Public Company Accounting Oversight Board D. The Financial Auditing Standards Board 30) The entity responsible for setting International Accounting Standards is A. The Financial Accounting Standards Board B. The International Monetary Fund C. The International Accounting Standards Board D. The Financial Accounting Foundation
Solution Description

Question1) The accounting process is correctly sequenced as
A. identification, communication, recording
B. recording, communication, identification
C. identification, recording, communication

D. communication, recording, identification
2) Bookkeeping differs from accounting in that bookkeeping primarily involves which part of the accounting process?
A. Identification
B. Communication

C. Recording
D. Analysis
3) Generally accepted accounting principles are
A. income tax regulations of the Internal Revenue Service
B. standards that indicate how to report economic events
C. theories that are based on physical laws of the universe
D. principles that have been proven correct by academic researchers
4) The private sector organization involved in developing accounting principles is the
A. Feasible Accounting Standards Body
B. Financial Accounting Studies Board
C. Financial Accounting Standards Board

 D. Financial Auditors' Standards Body
5) GAAP stands for
A. Generally Accepted Auditing Procedures
B. Generally Accepted Accounting Principles

C. Generally Accepted Auditing Principles
D. Generally Accepted Accounting Procedures
6) The four primary financial statements are
A. the general ledger, the working trial balance, the general journal and the balance sheet
B. the balance sheet, the working trial balance, the income statement and the statement of cash flows
C. the cash account, the statement of stockholder’s equity, the year-e

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