Bus 020 Quiz Multiple Choice

The major objective of financial reporting is to provide

• essential information to internal users of financial reports

• useful economic information about the business to help external parties make
  sound financial decisions.

• information to internal users about the cash position of the business.

• information to the IRS and the securities exchange commission (SEC).

  
  

Consider the following condensed balance sheet:

What are the dollar amounts of A and B?

• $60,000 and $165,000, respectively
  

• $60,000 and $15,000, respectively
  

• $60,000 and $175,000, respectively
  

• $55,000 and $175,000, respectively
  

On September 15, Pearson Company received the following payments from customers.
Customer A paid $10,000 for goods to be delivered October 15, customer B paid $6,000
for goods delivered August 15, and customer C paid $3,000 for goods delivered on
September 15. The company should recognize what amount of revenue for the month
ending September 30?

• 3,000

• 9,000

• 16,000

• 19,000

Ethos Company adjusts its deferred expenses at year-end. The effect of the adjusting
entry for the deferred expenses is to

• increase net income.
  

• decrease net income.
  

• have no effect on net income.
  

• either increase or decrease net income.
  

Accruing revenue would affect which of the following balance sheet items?

• A payable
  

• A prepaid revenue
  

• An unearned revenue
  

• A receivable
  

Which of the following is TRUE about every adjusting entry?

• They affect only income statement accounts.
  

• They affect a balance sheet account and an income statement account.
  

• They affect only balance sheet accounts.
  

• They affect only accounts with normal debit balances.
  

Which account should not appear on a post-closing trial balance?

• Cash

• Unearned Revenues
  

• Interest Revenues
  

• Accrued Expenses Payable
  

Increasing sales volume, and all else remaining unchanged, will increase which ratio?

• Asset turnover ratio
  

• Net profit margin
  

• Financial leverage
  

• Both a. and c.
  

Consider the following:

Which line in the chart is never a correct financial statement classification?

• Line A.
  

• Line B.
  

• Line C.
  

• Line D.
  

Which of the following groups of accounts, with normal balances, would appear in the
credit column of an unadjusted trial balance?

• Accounts Payable, Unearned Revenues, Cost of Sales, and Investment Income
  

• Unearned Revenues, Accumulated Depreciation, and Prepaid Expenses
  

• Accounts Payable, Unearned Revenues, and Accumulated Depreciation
  

• Contributed Capital, Retained Earnings, and Cost of Sales