WorksheetsA304 Module 1 Review
Total questions: 32
Worksheet time: 32mins
Name
Class
Date
1.
Financial vs. managerial accounting differs primarily in that financial accounting:
a)
Is for internal use and unconstrained by GAAP
b)
Is future-oriented and product-specific
c)
Serves external users and follows GAAP/SEC rules
d)
Focuses on day-to-day operations
2.
Which is NOT one of the three primary business activities measured by accounting?
a)
Operating
b)
Investing
c)
Hedging
d)
Financing
3.
The 1934 Securities Exchange Act most directly:
a)
Created the FASB
b)
Created the SEC and periodic reporting
c)
Mandated integrated audit for all private firms
d)
Required sustainability reports
4.
Which filing contains audited annual statements, notes, MD&A, and auditor’s report?
a)
10-Q
b)
8-K
c)
10-K
d)
S-1
5.
An unqualified audit opinion states that the financial statements are:
a)
In conformity with GAAP and free of material misstatement
b)
Misstated overall
c)
Mostly correct but with pervasive scope limitation
d)
Correct but auditor declines to opine
6.
The Conceptual Framework’s fundamental qualitative characteristics are:
a)
Comparability and Verifiability
b)
Relevance and Faithful Representation
c)
Timeliness and Understandability
d)
Materiality and Cost Constraint
7.
Which is an enhancing qualitative characteristic (not fundamental)?
a)
Relevance
b)
Faithful Representation
c)
Comparability
d)
Neutrality
8.
Which is a basic assumption underlying GAAP?
a)
Conservatism
b)
Periodicity (time-period)
c)
Full disclosure
d)
Matching
9.
Which best describes the agency problem?
a)
Bank competition raises deposit rates
b)
Managers (agents) may not act in owners’ interests due to information asymmetry
c)
Auditors set GAAP to control firms
d)
Investors disagree on returns
10.
Typical ESG/sustainability disclosures include:
a)
LIFO layers
b)
Greenhouse gas emissions and safety metrics
c)
EPS computations
d)
Derivatives fair-value hierarchy only
11.
Hoosier Co. began RE $55,000; dividends $15,000; ended RE $92,200. Net Income = ?
a)
$22,200
b)
$37,200
c)
$52,200
d)
$67,200
12.
Beginning A=$480 and L=$300. During period A increases by $18 and L decreases by $5. No stock issued; no dividends. Change in Retained Earnings = ?
a)
+$13
b)
+ $18
c)
+ $23
d)
−$5
13.
Revenues $420, Expenses $355, Gains $10, Losses $5. Pretax income = ?
a)
$65
b)
$70
c)
$75
d)
$80
14.
Which statement reports financial position at a point in time?
a)
Income Statement
b)
Statement of Cash Flows
c)
Balance Sheet
d)
Statement of Stockholders’ Equity
15.
The SSE typically rolls forward which components?
a)
Common Stock, APIC, Retained Earnings, AOCI (plus PS/TS if applicable)
b)
Cash, Inventory, Retained Earnings
c)
Revenues, Expenses, Dividends
d)
Assets, Liabilities, Equity subtotals only
16.
Items in Other Comprehensive Income (OCI) are generally:
a)
Owner transactions
b)
Non-owner, non-core, outside management control (e.g., certain unrealized gains/losses)
c)
Only cash flows
d)
Only revenue items
17.
Under U.S. GAAP, cash paid to acquire equipment is classified as:
a)
Operating
b)
Investing
c)
Financing
d)
Non-cash
18.
Which is a transaction that affects the equation today?
a)
Place a purchase order
b)
Sign a non-binding LOI
c)
Issue common stock for cash
d)
Interview a job candidate
19.
Normal balances are:
a)
Assets (credit), Liabilities (debit), Expenses (credit)
b)
Assets (debit), Liabilities (credit), Revenues (credit)
c)
Assets (debit), Liabilities (debit), Revenues (credit)
d)
Assets (credit), Dividends (credit), Expenses (credit)
20.
On Oct 1, pay $1,800 for a 12-month insurance policy (Prepaid). What is the Dec 31 adjustment?
a)
Dr Insurance Expense 1,800; Cr Cash 1,800
b)
Dr Insurance Expense 450; Cr Prepaid Insurance 450
c)
Dr Prepaid Insurance 1,350; Cr Insurance Expense 1,350
d)
Dr Prepaid Insurance 450; Cr Insurance Expense 450
21.
Supplies: Beg $2,000; Purchases $5,000; Ending count $1,200. Supplies Expense = ?
a)
$1,200
b)
$3,800
c)
$5,000
d)
$5,800
22.
Nov 1, loan $10,000 at 9% annual interest. Accrue interest revenue at Dec 31. Amount = ?
a)
$90
b)
$150
c)
$225
d)
$900
23.
Weekly salaries $5,400 for a 5-day week; year-end is Wednesday. Salaries accrual = ?
a)
$2,160
b)
$3,240
c)
$5,400
d)
$0
24.
Failure to adjust Unearned Revenue for services performed causes:
a)
Assets overstated; Revenues understated
b)
Liabilities overstated; Revenues understated
c)
Liabilities understated; Expenses overstated
d)
Revenues overstated; Liabilities overstated
25.
Which accounts could appear together in one adjusting entry?
a)
Cash and Revenue
b)
Dividends and Retained Earnings
c)
Interest Receivable and Interest Revenue
d)
Common Stock and Cash
26.
Which accounts are closed at period-end?
a)
Revenues, Expenses, Dividends
b)
Assets, Liabilities, Retained Earnings
c)
Common Stock, Accumulated Depreciation, Revenues
d)
Assets, Revenues, Retained Earnings
27.
The adjusted trial balance is used primarily to:
a)
Reconcile cash to bank
b)
Prepare the financial statements
c)
Post journal entries
d)
Close temporary accounts
28.
After closing, the post-closing trial balance includes:
a)
Only temporary accounts
b)
Only permanent accounts
c)
Temporary and permanent accounts
d)
Only equity accounts
29.
Revenues $375,000; Expenses $330,000; Dividends $14,000. Net income closed to Retained Earnings = ?
a)
$31,000
b)
$45,000
c)
$61,000
d)
$375,000
30.
Which sequence is correct?
a)
Unadjusted TB → Adjusting → Adjusted TB → Financials → Closing → Post-Close TB
b)
Adjusted TB → Unadjusted TB → Closing → Financials
c)
Financials → Adjusting → Adjusted TB → Closing
d)
Closing → Adjusting → Adjusted TB → Financials
31.
Under U.S. GAAP, cash interest paid is classified as:
a)
Operating outflow
b)
Investing outflow
c)
Financing outflow
d)
Non-cash
32.
Even when the adjusted trial balance balances, errors may remain because:
a)
Trial balances always detect all errors
b)
Misclassifications/omissions can still exist
c)
The bank reconciliation fixes them automatically
d)
It proves every account is correct
100 %
