Untitled Quiz

The primary objective of financial accounting is to:

• Serve the decision-making needs of internal users.

• Provide accounting information that serves external users.

• Monitor consumer needs, tastes, and price concerns.

• Provide information on both the costs and benefits of looking after products and services.

• Know what, when, and how much product to produce.

Which of the following factors is not a component of the fraud triangle?

• Opportunity

• Pressure

• Rationalization

• All of the above are components of the fraud triangle.

The accounting concept that requires every business to be accounted for separately from other business entities, including its owner or owners is known as the:

• Time-period assumption.

• Business entity assumption.

• Going-concern assumption.

• Revenue recognition principle.

• Measurement (Cost) principle.

All of the following are external users of accounting information except:

• Lenders.

• Shareholders.

• Board of directors.

• Chief executive officer (CEO).

• Customers.

A record of the increases and decreases in a specific asset, liability, equity, revenue, or expense is known as a(n):

• Journal.

• Posting.

• Trial balance.

• Account.

• Chart of accounts.

Unearned revenues are generally:

• Revenues that have been earned and received in cash.

• Revenues that have been earned but not yet collected in cash.

• Liabilities created when a customer pays in advance for products or services before the revenue is earned.

• Recorded as an asset in the accounting records.

• Increases to owners' capital.

The right side of a T-account is a(n):

• Debit.

• Increase.

• Credit.

• Decrease.

• Account balance.

A double-entry accounting system is an accounting system:

• That records each transaction twice.

• That records the effect of each transaction in at least two accounts with equal debits and credits.

• In which each transaction affects and is recorded in two or more accounts but that could include two debits and no credits.

• That allows total credits to be greater than total debits.

• That allows total debits to be greater than total credits.

Interim financial statements refer to financial reports:

• That cover less than one year, usually spanning one, three, or six-month periods.

• That are prepared before any adjustments have been recorded.

• That show the assets above the liabilities and the liabilities above the equity.

• Where revenues are reported on the income statement when cash is received and expenses are reported when cash is paid.

• Where the adjustment process is used to assign revenues to the periods in which they are earned and to match expenses with revenues.

The broad principle that requires expenses to be reported in the same period as the revenues that were earned as a result of the expenses is the:

• Recognition principle.

• Cost principle.

• Cash basis of accounting.

• Expense recognition (Matching) principle.

• Time period principle.