WorksheetsFABM 2 Preliminary Exam
Total questions: 50
Worksheet time: 43mins
planning, recording, analyzing, and interpreting financial information
accounting equation
asset
accounting
balance sheet
an equation showing the relationship among assets, liabilities, and owner's equity.
accounting
asset
accounting equation
balance sheet
anything of value that is owned
asset
capital
expense
liability
a business that performs an activity for a fee
source document
service business
t account
income statment
Accounting Equation
Liabilities - Equity = Assets
Assets + Equity = Liabilities
Liabilities + Equity = Assets
Which of the following is a current asset?
Land
Equipment
Accounts receivable
Accounts payable
What is the formula for Costs of Good Sold?
Beginning Inventory + Purchases in Current Period - Ending Inventory
Direct Labor+ Direct Costs + Manufacturing Overhead
Predetermined
overhead rate x Amount of the allocation base incurred on the job
Total Cost of Production - Variable Cost per Unit No x No of Units Produced
Which of the following accounts appears on the Balance Sheet
Sales Revenue
Accounts Receivable
Dividends
All of these
Cost of Goods Sold is what type of account?
Asset
Liability
Owners' Equity
Expense
Revenue - expenses = _______________
Retained Earnings
Common Stock
Net Income
Dividends
Net income or net loss is calculated on which financial statement?
Income Statement
Balance Sheet
Statement of Retained Earnings
Trial Balance
What is the correct order for preparing the financial statements?
Balance Sheet, Statement of Retained Earnings, Income Statement
Trial Balance, Balance Sheet, Income Statement
Income Statement, Trial Balance, Statement of Retained Earnings
Income Statement, Statement of Retained Earnings, Balance Sheet
a financial statement showing the revenue and expenses for a fiscal period
chart of accounts
balance sheet
income statment
service business
a financial statement that reports assets, liabilities, and owner's equity on a specific date.
accounting equation
balance sheet
blank endorsement
chart of accounts
What is the purpose of the statement of cash flows?
To change cash basis financial statements to accrual basis reporting
To summarize the cash receipts and cash payments over a period of time.
to adjust the cash balance reported on the balance sheet
to explain cash controls operating in the corporation
Which of the following is an operating activity of a business?
Selling products for cash.
Purchasing land to build a factory
Repaying a loan from a bank.
paying dividends
Which of the following is not one of the three inventory accounts reported on the balance sheet?
Cost of goods sold
finished goods
work in process
raw materials
Business operation between two or more individuals who share management and profits.
Corporation
Partnership
Sole Proprietorship
Flexibility in reporting: Single, continuous statement of comprehensive income
Income statement
Statement of comprehensive income
Sections of statement of cash flows
Operating activities
Investing Activities
Financing Activities
Long-term activities
Short-Term Activities
Sales Discount
Contra-Revenue Account
Revenue Account
Sales Discount forfeited
Contra-Revenue Account
Revenue Account
Based bad debt expense on the appropriate carrying value of accounts receivable
Company estimates what the ending balance of the allowance for uncollectible accounts should be, and then record the amount of bad debt expense necessary to adjust the allowance to the desired balance
Balance Sheet Approach
Income Statement Approach
Current Expected Credit Loss
Estimate bad debt expense directly as a percentage of each period's net credit sales
Balance Sheet Approach
Income Statement Approach
Current Expected Credit Loss
Which of the following is considered a long-term liability?
Accounts Payable
Notes Payable
Accrued Expenses
Unearned Revenue
What is the primary purpose of the income statement?
To show the financial position at a specific date
To report revenues and expenses over a period of time
To summarize cash flows from operating activities
To provide a statement of changes in equity
Which of the following is an example of a non-cash expense?
Depreciation
Rent Expense
Utilities Expense
Salaries Expense
Which of the following is not a component of the accounting cycle?
Journalizing
Posting
Budgeting
Preparing financial statements
What type of account is 'Accumulated Depreciation'?
Asset
Contra-Asset
Liability
Equity
Which financial statement provides information about a company's profitability over a specific period?
Balance Sheet
Income Statement
Statement of Cash Flows
Statement of Changes in Equity
What is the main function of the balance sheet?
To show the company's profitability over a period
To report the financial position at a specific point in time
To summarize cash flows for the period
To detail the changes in equity
Which of the following is classified as a long-term asset?
Inventory
Accounts Receivable
Land
Cash
A) Cash Flow Statement is helpful in the formation of policies.
B) Cash Flow Statement is useful for external analysis
C) Cash Flow Statement is helpful in estimating future cash flow
The two elements of financial statements for SCI
(a)
TRUE or FALSE
The revenue earned by a service business for rendering services for a fee is commonly referred to as Service Income or Service Revenue.
TRUE
FALSE
An example to this is gains or losses on hedging derivatives
A. Comprehensive Income
B. Financial Position
C. Changes in Equity
The nature of business for a multi-step statement of a comprehensive income
(a)
This occurs when revenue is less than expenses.
(a)
Earnings from selling of
merchandize
(a)
It is equal to sales less contra sales account (sales returns and allowances and sales discount )
Income
Net Sales
Expense
Revenue = 1000
Cost of Goods Sold = 200
Expenses = 300
Net Profit = ?
800
500
700
300
Revenue = 1000
Cost of Goods Sold = 200
Expenses = 300
Gross Profit = ?
800
500
700
300
The statement of comprehensive income shows profit or loss only.
True
False
What are the 2 kinds of income?
Gains
Profit
Interest
Revenues
What are the 2 kinds of expenses?
Cost of Sales
Cost of Goods Sold
Expenses
Losses
Describe the relationship between Cost of Sales and Gross Profit.
Gross Profit = Revenue - Cost of Sales
Cost of Sales = Gross Profit + Revenue
Gross Profit = Cost of Sales - Revenue
Gross Profit = Cost of Sales + Revenue
