WorksheetsACC250 Quiz 1 Review
Total questions: 25
Worksheet time: 18mins
Managerial accounting provides information to ________.
internal decision makers
outside investors and lenders
creditors
taxing authorities
Bill's Cleaning Services performs services for its customers during March. Payments for the March services are received in June. How does the transaction for the collection of cash from customers affect the accounting equation of Bill's Cleaning Services?
liabilities increase and assets increase
total assets remain the same
assets increase and revenues increase
assets increase and equity decreases
Universal Company paid $10,000 on accounts payable. How does this transaction affect the accounting equation of Universal?
assets decrease by $10,000 and equity increases by $10,000
assets decrease by $10,000 and liabilities decrease by $10,000
assets increase by $10,000 and equity decreases by $10,000
assets increase by $10,000 and liabilities increase by $10,000
Jones Supply Services paid $350 cash, the amount owed from the previous month, to a materials supplier. Which of the following accounts will decrease?
Accounts Payable
Accounts Receivable
Jones, Capital
Office Supplies
Deviney Equipment Rental Company received $1,000 cash from a customer; the amount was owed to the business from the previous month. What is the effect of this transaction on the accounting equation?
Accounts Receivable increases and Service Revenue increases
Cash increases and Accounts Payable decreases
Cash increases and Service Revenue increases
Cash increases and Account Receivable decreases
The equity of Alliance Company is $100,000 and the total liabilities are $10,000. Total assets =
$200,000
$20,000
$90,000
$110,000
Susan Company has assets and equity that amount to $260,000 and $70,000, respectively. What do liabilities equal?
$70,000
$190,000
$260,000
$330.000
The field of accounting that focuses on providing information for external decision makers is ____________.
managerial accounting
financial accounting
cost accounting
nonmonetary accounting
Which of the following users would rely on managerial accounting information for decision-making purposes?
potential investors
creditors
customers
company managers
Which of the following organizations is responsible for the creation and governance of accounting standards in the United States?
Financial Accounting Standards Board
Institute of Management Accountants
American Institute of Certified Public Accountants
Securities and Exchange Commission
Regarding generally accepted accounting principles (GAAP), which of the following statements is incorrect?
GAAP rests on a conceptual framework that identifies the objectives, characteristics, elements, and implementation of financial statements.
The primary objective of financial reporting is to provide information useful for making investment and lending decisions.
Relevant information is complete, neutral, and free from error.
GAAP is currently formulated by the Financial Accounting Standards Board.
Which of the following financial statements would be most useful if an analyst wants to know the likelihood of repayment of business debts?
income statement
balance sheet
statement of owner's equity
statement of cash flows
Which of the following is a liability account?
Prepaid Advertising
Cash
Building
Unearned Rent
A liability created when a business receives cash from customers in advance of providing services or delivering goods is called a(n) ________.
notes receivable
unearned revenue
accrued liability
service revenue
Which of the following accounts increases with a credit?
Owner, Withdrawals
Owner, Capital
Accounts Receivable
Prepaid Expenses
Which one of the following account groups will decrease with a debit?
assets and expenses
revenues and expenses
liabilities and revenues
assets and liabilities
Which of the following statements is TRUE of expenses?
Expenses increase equity, so an expense account's normal balance is a credit balance.
Expenses decrease equity, so an expense account's normal balance is a credit balance.
Expenses increase equity, so an expense account's normal balance is a debit balance.
Expenses decrease equity, so an expense account's normal balance is a debit balance.
Accounts Receivable is a(n) ________ account and has a normal ________ balance.
liability; debit
asset; debit
liability; credit
asset; credit
Posting a transaction means
calculating the balance in an account
transferring data from the journal to the ledger
preparing a summary of account balances
finding the account number in the chart of accounts
The accounting process of transferring data from the journal to the ledger is called
journalizing
posting
compounding
sourcing
A business purchases equipment in exchange for a note payable. This transaction results in ______________.
no journal entry because no cash has been paid
a debit to Notes Payable and a credit to Equipment
an increase in liabilities
a debit to Equipment and a credit to Accounts Payable
A business performs services for a customer for $26,000 on account. Which of the following accounts is debited?
Cash
Accounts Receivable
Service Revenue
Accounts Payable
Which of the following financial statements would be most useful if an analyst wants to know the profitability of a company?
income statement
balance sheet
statement of owner's equity
statement of cash flows
Which of the following is the correct order of preparation of financial statements?
Income statement → statement of owner's equity → balance sheet → statement of cash flows
Statement of owner's equity → balance sheet → income statement → statement of cash flows
Balance sheet → statement of owner's equity → income statement → statement of cash flows
Balance sheet → income statement → statement of owner's equity → statement of cash flows
Which of the following statements best defines financial statements?
Financial statements are the information systems that record monetary and nonmonetary business transactions.
Financial statements are the verbal statements made to business news organizations by chief financial officers.
Financial statements are business documents that report on a business in monetary terms, providing information to help users make informed business decisions.
Financial statements are plans and forecasts for future time periods based on information from past financial periods.
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