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WorksheetsAccounting Quiz
Total questions: 76
Worksheet time: 38mins
Accountants refer to an economic event as a
purchase.
sale.
transaction.
change in ownership.
The accounting process includes each of the following except
communication.
convergence.
identification.
recording.
Communication of economic events is the part of the accounting process that involves
identifying economic events.
quantifying transactions into dollars and cents.
preparing accounting reports.
recording and classifying information.
Which of the following events cannot be quantified into dollars and cents and recorded as an accounting transaction?
The appointment of a new accounting firm to perform an audit.
The purchase of a new computer.
The sale of store equipment.
Payment of income taxes.
Recording of economic events involves
keeping a systematic, chronological diary of events.
analyzing reported information.
explaining the meaning of reported data.
preparing accounting reports.
The accounting process involves all of the following except
identifying economic events that are relevant to the business.
communicating financial information to users by preparing financial reports.
recording nonquantifiable economic events.
analyzing and interpreting financial reports.
The accounting process is correctly sequenced as
identification, communication, recording.
recording, communication, identification.
identification, recording, communication.
communication, recording, identification.
Which of the following techniques is not used by accountants to interpret and report financial information?
Graphs.
Special memos for each class of external users.
Charts.
Ratios.
Bookkeeping primarily involves which of the following parts of the accounting process?
Identification.
Communication.
Recording.
Analysis.
Which of the following would not be considered an external user of accounting data for the GHI Company?
Taxing authority representative.
Management.
Creditors.
Customers.
Which of the following would not be considered internal users of accounting data for a company?
The president of a company.
The controller of a company.
Creditors of a company.
Salesmen of a company.
Which of the following is an external user of accounting information?
Labor unions.
Finance directors.
Company officers.
Managers.
Which one of the following is not an external user of accounting information?
Regulatory agencies.
Customers.
Investors.
All of these answer choices are correct.
Which of the following would not be considered an internal user of accounting data for GHI Company?
President of the company.
Production manager.
Merchandise inventory clerk.
President of the employees' labor union.
Internal users of accounting information include all of following except the
CEO of Sony.
Human Resources department at Hyundai.
Marketing department at Braun.
Shareholders of Airbus.
Internal users of accounting information include
the shareholders of Royal Dutch Shell.
the State Administration of Taxation of China.
the Chief Financial officer of Credit Suisse.
the International Accounting Standards Board.
External users of accounting information include all of following except
the shareholders of Air Italy.
the management of Pirelli.
a potential customers of Olivetti.
All of these answer choices are correct.
External users of accounting information include the
lnternational Accounting Standards Board.
shareholders of Ferragamo.
Marketing department at Olivetti.
CEO of Air Italy.
The origins of accounting are generally attributed to the work of
Christopher Columbus.
Abner Doubleday.
Luca Pacioli.
Leonardo da Vinci.
Financial accounting provides economic and financial information for each of the following except
creditors.
investors.
managers.
other external users.
The final step in solving an ethical dilemma is to
identify and analyze the principal elements in the situation.
recognize an ethical situation.
identify the alternatives and weigh the impact of each alternative on stakeholders.
recognize the ethical issues involved.
The first step in solving an ethical dilemma is to
identify and analyze the principal elements in the situation.
identify the alternatives.
recognize an ethical situation and the ethical issues involved.
weigh the impact of each alternative on various stakeholders.
Ethics are the standards of conduct by which one's actions are judged as
right or wrong.
honest or dishonest.
fair or unfair.
All of these answer choices are correct.
The historical cost principle requires that companies record assets at their
appraisal value.
cost.
market price.
list price.
IFRS are determined by the
Internal Accounting Standards Body.
International Accounting Studies Board.
International Accounting Standards Board.
International Auditors' Standards Body.
GAAP stands for
Generally Accepted Auditing Procedures.
Generally Accepted Accounting Principles.
Generally Accepted Auditing Principles.
Generally Accepted Accounting Procedures.
The Duce Company has five plants nationwide that cost $300 million. The current fair value of the plants is $500 million. The plants will be recorded and reported as assets at
$300 million.
$800 million.
$200 million.
$500 million.
Convergence refers to
using the same accounting principles from one period to the next.
use of the same accounting principles by all companies.
the elimination of all accounting standard-setting bodies except the International Accounting Standards Board.
the process of reducing the differences between IFRS and GAAP.
The body that has the power to prescribe the accounting practices and standards used by most US companies is the
FASB.
IASB.
GAAP.
IFRS.
The fair value principle
is one of the two costing principles followed by the IASB.
is more useful than the historical cost principle for valuing some assets.
dictates that an asset should be valued at the price at which it could be sold.
All of these answer choices are correct.
Most assets should be valued at cost because fair values
are not useful for decision-making.
may not be representationally faithful.
are not relevant.
may be higher or lower than historical cost.
Harrod's Inc. purchased land for ₤50,000 in 2007. At December 31, 2017, an appraisal determined the fair value of the land is ₤65,000. If Harrod's follows the historical cost principle, in the 2017 financial statements, the land will be reported at
₤50,000 on the statement of financial position.
₤65,000 on the statement of financial position.
₤50,000 on the income statement.
₤65,000 on the income statement.
Hyundai Inc. purchased land for W118,000,000 in 2005. At December 31, 2014, an appraisal determined the fair value of the land is W136,000,0000. If Hyundai follows the cost principle, the land will be reported on the statement of financial position at
W100,000,000.
W118,000,000.
W136,000,000.
W154,000,000.
If the company follows the fair value principle, the investment will be reported in the 2014 financial statement at
Rp250,000,000 on the statement of financial position.
Rp268,000,000 on the statement of financial position.
Rp250,000,000 on the retained earnings statement.
Rp268,000,000 on the retained earnings statement.
The land and investment will be reported on the December 31, 2017 statement of financial position at
W92,000,000 and W49,000,000, respectively.
W92,000,000 and W63,000,000, respectively.
W106,000,000 and W49,000,000, respectively.
W106,000,000 and W63,000,000, respectively.
The proprietorship form of business organization
must have at least three owners in most states.
requires that the owner be personally liable for all debts of the business.
combines the records of the business with the personal records of the owner.
is characterized by a legal distinction between the business as an economic unit and the owner.
The economic entity assumption requires that the activities
of different entities can be combined if all the entities are corporations.
must be reported to the Securities and Exchange Commission.
of a sole proprietorship cannot be distinguished from the personal economic events of its owners.
of an entity be kept separate from the activities of its owner.
A business organized as a corporation
is not a separate legal entity in most countries.
requires that shareholders be personally liable for the debts of the business.
is owned by its shareholders.
terminates when one of its original shareholders dies.
The partnership form of business organization
is a separate legal entity.
is a common form of organization for service-type businesses.
enjoys an unlimited life.
has limited liability.
Which of the following is not an advantage of the corporate form of business organization?
Limited liability of shareholders
Transferability of ownership
Unlimited personal liability for shareholders
Unlimited life
A small neighborhood barber shop that is operated by its owner would likely be organized as a
joint venture.
partnership.
corporation.
proprietorship.
John and Sam met at law school and decide to start a small law practice after graduation. They agree to split revenues and expenses evenly. The most common form of business organization for a business such as this would be a
joint venture.
partnership.
corporation.
proprietorship.
Which of the following is true regarding the corporate form of business organization?
Corporations are the most prevalent form of business organization.
Corporate businesses are generally smaller in size than partnerships and proprietorships.
The revenues of corporations are greater than the combined revenues of partnerships and proprietorships.
Corporations are separate legal entities organized exclusively under federal law.
A basic assumption of accounting that requires activities of an entity be kept separate from the activities of its owner is referred to as the
stand alone concept.
monetary unit assumption.
corporate form of ownership.
economic entity assumption.
The assumption that enables accounting to quantify (measure) economic events is the
economic entity assumption.
cost principle.
historical cost principle.
monetary unit assumption.
A business whose owners enjoy limited liability is a
proprietorship.
partnership.
corporation.
sole proprietorship.
The common characteristic possessed by all assets is
long life.
great monetary value.
tangible nature.
future economic benefit.
Equity is best depicted by the following:
Assets = Liabilities.
Liabilities + Assets.
Residual equity + Assets.
Assets – Liabilities.
The basic accounting equation may be expressed as
Assets − Equity = Liabilities.
Assets – Liabilities = Equity.
Assets = Liabilities + Equity.
All of these answer choices are correct.
Liabilities
are future economic benefits.
are existing debts and obligations.
possess service potential.
are things of value used by the business in its operation.
Liabilities of a company would not include
notes payable.
accounts payable.
wages payable.
cash.
Liabilities of a company are owed to
debtors.
benefactors.
creditors.
underwriters.
Equity can be described as
creditorship claim on total assets.
ownership claim on total assets.
benefactor's claim on total assets.
debtor claim on total assets.
Equity is often referred to as
residual equity.
leftovers.
spoils.
second equity.
When assets are distributed to the shareholders of a corporation, these distributions are termed
depletions.
consumptions.
dividends.
a credit line.
hareholders of a corporation, these distributions are termed
depletions.
consumptions.
dividends.
a credit line.
A dividend is
a distribution of the company's earnings to its shareholders.
equal to liabilities minus equity.
equal to assets minus equity.
equal to revenues less expenses.
Revenues would not result from
sale of merchandise.
issuance of ordinary shares.
performance of services.
rental of property.
Sources of increases to equity are
issuance of shares.
purchases of merchandise.
dividends.
expenses.
The basic accounting equation cannot be restated as
Assets – Liabilities = Equity.
Assets – Equity = Liabilities.
Equity + Liabilities = Assets.
Assets + Liabilities = Equity.
Equity is decreased by all of the following except
issuance of shares.
dividends.
expenses.
net losses.
If total liabilities increased by ¥45,000 and equity increased by ¥10,000 during a period of time, then total assets must change by what amount and direction during that same period?
¥55,000 decrease
¥55,000 increase
¥35,000 increase
¥35,000 decrease
If total liabilities decreased by ¥45,000 and equity increased by ¥10,000 during a period of time, then total assets must change by what amount and direction during that same period?
¥55,000 increase
¥35,000 decrease
¥35,000 increase
¥45,000 decrease
If total liabilities decreased by ¥35,000 and equity increased by ¥5,000 during a period of time, then total assets must change by what amount and direction during that same period?
¥30,000 decrease
¥30,000 increase
¥35,000 increase
¥40,000 increase
If total liabilities decreased by ¥45,000 and equity decreased by ¥10,000 during a period of time, then total assets must change by what amount and direction during that same period?
¥55,000 increase
¥35,000 increase
¥55,000 decrease
¥35,000 decrease
If total liabilities increased by ¥31,000 during a period of time and equity decreased by ¥9,000 during the same period, then the amount and direction of the period’s change in total assets is a(n)
¥31,000 increase.
¥40,000 increase.
¥22,000 decrease.
¥22,000 increase.
The equity section of a statement of financial position has two components:
share capital and liablities.
assets and liablities.
share capital and retained earnings.
share capital and assets.
A company increases its share capital by
selling ordinary shares to its investors.
performing services for cash.
selling goods on account.
paying dividends to its shareholders.
The retained earnings section of the statement of financial position is determined by
assets,liabilities and share capital.
revenues, expenses and share capital.
share capital, dividends and residual equity.
revenues, expenses and dividends.
All of the following transactions increase revenue except the
sale of additional ordinary shares by British Airways.
sale of clothing by the French Connection.
performance of acccounting services by PricewaterhouseCoopers.
sale of pertroleum by Royal Dutch Shell.
As of December 31, 2017, Dolce & Gabanna Inc. had assets of €9,500,000, share capital of €3,500,000 and retained earnings of €4,000,000. Total liabilities as of that date are
€0.
€2,000,000.
€6,000,000.
€5,500,000.
On its December 31, 2017 statement of financial position, Adaro Corporation reported liabilities of Rp7,698,000,000, share capital of Rp3,993,000,000 and retained earnings of Rp6,303,000,000. Total assets as of December 31, 2017 are
Rp14,001,000,000.
Rp11,691,000,000.
Rp10,296,000,000.
Rp17,994,000,000.
As of December 31, 2017, Oxford-Welsh Inc. had assets of ₤9,780,000, liabilities of ₤2,970,000, and share capital of ₤4,230,000. Retained earnings as of that date are
₤2,580,000.
₤5,550,000.
₤6,810,000.
₤7,200,000.
As of December 31, 2017, Thames Company reported assets of ₤8,640,000, liabilities of ₤2,560,000 and retained earnings of ₤4,420,000. Share capital reported on the December 31, 2017 statement of financial position is
₤1,660,000.
₤1,860,000.
₤6,980,000.
₤6,080,000.
As of December 31, 2017, Deitrich Inc. had assets of €17,400,000, liabilities of €6,200,000, share capital of ₤4,400,000 and retained earnings of €6,800,000. Total equity as of that date is
€4,400,000.
€3,750,000.
€11,200,000.
€4,400,000.
As of December 31, 2017, Lojas Company reported assets of R$9,250,000, liabilities of R$2,750,000, share capital of R$2,475,000 and retained earnings of R$4,025,000. Total equity reported on the statement of financial position as of that date is
R$1,550,000.
R$6,500 000.
R$4,025 000.
R$2,475.000.
