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WorksheetsFinal Exam Review-Accounting
Total questions: 100
Worksheet time: 58mins
Name
Class
Date
1.
What are the three basic types of businesses?
a)
Service, Profit, Non-Profit
b)
Service, Merchandising, Manufacturing
c)
Profit, Manufacturing, Merchandising
d)
Service, Merchandising, Sales
2.
What type of accounting document will show if a business is profitable?
a)
Income Statement
b)
Balance Sheet
c)
Statement of Cash Flows
d)
Profit/Loss Statement
3.
What type of accounting document will show the value of a business (what they own and what they owe)?
a)
Income Statement
b)
Balance Sheet
c)
Statement of Cash Flows
d)
Profit/Loss Statement
4.
What type of accounting document will show exactly what happened to the most important asset...Cash?
a)
Income Statement
b)
Balance Sheet
c)
Statement of Cash Flows
d)
Profit/Loss Statement
5.
_______________________ _______________________ is generally governed by the GAAP due to their external reporting (public)
a)
Managerial Accounting
b)
Personal Accounting
c)
Financial Accounting
d)
No Fault Accounting
6.
_______________________ _______________________ is uses both historical data and future estimates due to its disaggregated (detailed) nature?
a)
Managerial Accounting
b)
Personal Accounting
c)
Financial Accounting
d)
No Fault Accounting
7.
An _____________________ ____________________ system is the company’s policies and procedures that assure the reliability of its accounting information.
a)
managerial accounting
b)
internal control
c)
bicameral legislature
d)
external auditing
8.
What two organizations are particularly important in establishing the GAAP? (Select all that apply)
a)
Financial Accounting Standard Board (FASB)
b)
American Accounting Association (AAA)
c)
Securities and Exchange Commission (SEC)
d)
Institute of Management Accountants (IMA)
9.
Net income= ________________ - ____________________
a)
Profit - Loss
b)
Expenses - Revenues
c)
Loss - Profit
d)
Revenues - Expenses
10.
This financial statement provides information on a business entity’s sale or purchase of its own stock during a period.
a)
Income Statement
b)
Balance Sheet
c)
Statement of Cash Flows
d)
Statement of Stockholder's Equity
11.
This financial statement shows the assets, liabilities, and stockholders’ (owner’s) equity of a business entity at a specific date
a)
Income Statement
b)
Balance Sheet
c)
Statement of Cash Flows
d)
Statement of Stockholder's Equity
12.
What are the three basic parts to the balance sheet? (Select all that apply)
a)
Profits
b)
Assets
c)
Liabilities
d)
Losses
e)
Stockholder's (Owner's) Equity
13.
In the Stockholder's (Owner's) Equity statement what are profits paid out to stockholder's called (usually in cash)?
a)
retained earnings
b)
dividends
c)
balances
d)
Cash Flow
14.
The basic accounting equation is ____________________ = Liabilities + Stockholder's Equity.
a)
Dividends
b)
Earnings
c)
Assets
d)
Cash
15.
An assumption that a business will continue to operate in the foreseeable future unless specific evidence suggests that this is not a reasonable assumption.
a)
Business Entity Concept
b)
Historical Cost Concept
c)
Going Concern Concept
d)
Revenue Recognition Concept
16.
Assets of a company are recorded and reported in the financial statements at their acquisition cost.
a)
Business Entity Concept
b)
Historical Cost Concept
c)
Going Concern Concept
d)
Revenue Recognition Concept
17.
Separates from the personal affairs of its owner.
a)
Business Entity Concept
b)
Historical Cost Concept
c)
Going Concern Concept
d)
Revenue Recognition Concept
18.
Amounts of cash to be received in the future from credit sales to customers.
a)
Accounts payable
b)
Inventory
c)
Accounts receivable
d)
Marketable Securities
19.
Amounts owed that have accumulated but are not yet due at the end of the period. Examples include: salaries, insurance, interest, income taxes, property taxes, and payroll taxes.
a)
accounts payable
b)
notes payable
c)
accrued liabilities
20.
Liabilities evidenced by a formal written promise to pay with interest at a definite future time. (AKA a loan)
a)
accounts payable
b)
notes payable
c)
accrued liabilities
21.
Liabilities to a supplier for goods or services purchased on credit.
a)
accounts payable
b)
notes payable
c)
accrued liabilities
22.
Located on the Balance Sheet, this is often known as "common stock"
a)
Retained earnings
b)
Capital Stock
c)
Dividends
23.
The accumulated net income retained in a corporation less dividends distributed. (AKA company sales)
a)
Retained earnings
b)
Capital Stock
c)
Dividends
24.
Data captured on __________________ ___________________ provides evidence of a transaction.
a)
Retained Earnings
b)
Source Documents
c)
Trial Balance
d)
Dividends Payable
25.
____________________ is the process of transferring information from the General Journal to the General Ledger.
a)
Posting
b)
Balancing
c)
Adjusting
d)
Sourcing
26.
Revenues and Expenses are recorded as incurred (as they happen) without regard to the date that cash is paid or received; this method of recording transactions is called
a)
Cash Basis Accounting
b)
Accrual Basis Accounting
c)
General Ledger Basis Accounting
d)
French Basis Accounting
27.
What are the two determining factors when to record revenue? (Select all that apply)
a)
When the customer pays
b)
When the services occur
c)
When goods are delivered
d)
The month in which the account is created
28.
A systematic method of accounting by which every transaction affects at least two accounts.
a)
Cash Basis Accounting
b)
Double-Entry Bookkeeping
c)
Accrual Basis Accounting
d)
Simply Stated Accounting
29.
Which of the following is the first place where a transaction is recorded using debits and credits in a company’s accounting system?
a)
General journal
b)
General ledger
c)
T account
d)
Source documents
e)
Balance sheet
30.
Which of the following transactions would be recorded as revenue in the month of June?
a)
A company sold 5,000 shares of capital stock in June and received $20,000 cash.
b)
A company borrowed $5,000 from a local bank and signed a 3-month note payable at 5% interest.
c)
A company received an advance payment in June of $300 for services to be provided in July.
d)
A company provided services in the month of June for $800. The fee for these services is billed to the customer in June but will not be collected until August.
e)
Both (c) and (d)
31.
Which of the following transactions would be recorded as an expense in the month of June?
a)
A company purchased equipment in June paying $20,000 cash.
b)
A company paid $1,500 in salaries to employees in June for time worked during June.
c)
A company declared and paid a $5,000 cash dividend to stockholders on June 20.
d)
A company paid a $500 electric bill in June for electricity used during the month of May.
e)
Both (b) and (c)
32.
Entries made on a company’s books at the end of a period to take care of changes occurring in accounts are called:
a)
Monetary entries
b)
Adjusting entries
c)
Reversing entries
d)
Correcting entries
e)
Closing entries
33.
The Accumulated Depreciation account should be shown in the financial statements as:
a)
An expense
b)
An extraordinary loss
c)
A liability
d)
Stockholders’ equity
e)
A (contra) deduction from an asset account
34.
An accrued expense results in:
a)
An accrued liability
b)
An accrued revenue
c)
A prepaid expense
d)
An unearned revenue
e)
A contra owners’ equity account
35.
What two concepts are crucial in accrual basis accounting to keeping consistency when adjusting entries? (Select all that apply)
a)
Business Entity Concept
b)
Matching Concept
c)
Halo Concept
d)
Revenue Recognition Concept
36.
When are adjusting entries entered in the general journal?
a)
The first day of the accounting period
b)
The first day of the next accounting period
c)
The last day of the accounting period
d)
The last day of civilization prior to reaching the point of singularity.
37.
Which of the following inventory systems provides better control over inventories since the inventory records show the quantity of goods that should be on hand at any time?
a)
FIFO inventory system
b)
Average cost inventory system
c)
Perpetual inventory system
d)
Periodic inventory system
38.
Current assets do not include:
a)
Cash
b)
Accounts receivable
c)
Prepaid insurance
d)
Unearned revenue
e)
All of the above are current assets
39.
Net income earned on each share of common stock. = net income divided by the average number of shares of common stock outstanding during the year.
a)
Current Ratio
b)
Debt Ratio
c)
Gross Margin
d)
Earnings Per Share
40.
A customer’s check that was deposited in a company’s bank account but returned by the bank because of a lack of funds in the customer’s account from which the check was drawn.
a)
Accountable Check
b)
Cashier's Check
c)
NSF Check
d)
Blank Check
41.
Cash and assets convertible directly into known amounts of cash (such as marketable securities and receivables).
a)
Principal
b)
Short Term Financial Assets
c)
Defaults
d)
Long Term Assets
42.
The value of a note at the end of its term, consisting of principal plus interest.
a)
Maturity Value
b)
Default
c)
True Value
d)
NSF Check
43.
An unconditional promise to pay a definite sum of money on demand or at some future date.
a)
Promissory Note
b)
Outstanding Check
c)
Aging Accounts Receivable
d)
Pinky Swear
44.
The amount owed on a promissory note.
a)
Default
b)
Interest
c)
True Value
d)
Principal
45.
A guideline which chooses between acceptable accounting alternatives for recording transactions so that the least favorable immediate effect on assets, income, and stockholders’ equity is reported.
a)
Market Value
b)
Liberalism
c)
Conservatism
d)
Communism
46.
The person who signs a promissory the note and promises to pay the amount of the note.
a)
Payee
b)
Maker
c)
Principal Investor
d)
Yoda
47.
A contra-asset account showing the portion of accounts receivable that is estimated to be uncollectible.
a)
net relizable value
b)
discounting notes receivable
c)
allowance for uncollectible accounts
d)
Maturity Value
48.
Highly liquid investments, primarily in stocks and bonds of publicly owned companies, that can be sold at quoted market prices in organized securities exchanges.
a)
interest
b)
Principal
c)
Marketable Securities
d)
Cash Equivalents
49.
The charge for the use of money commonly expressed as an annual percentage of the amount owed (principal).
a)
Interest
b)
Promissory Note
c)
True Value
d)
Asset value
50.
A schedule prepared monthly to explain the difference between the balance per bank and the balance per books.
a)
Bank Statement
b)
Per Books Statement
c)
Bank Reconciliation
d)
Net Realizable Value
51.
Failure to pay interest or principal of a promissory note at the due date
a)
Interest
b)
Bank Recall
c)
Debt
d)
Default
52.
The holder of a promissory note; the person to whom payment is to be made
a)
Maker
b)
Payee
c)
Defaulter
d)
Promisor
53.
What is the danger of having high levels of inventory? (Select Two that apply)
a)
Ties up cash
b)
Shows that your product is in demand
c)
Safeguards Cash
d)
Doesn't show good turn/sales of product
e)
Creates long term notes
54.
______________________ ___________________ are required for any adjustments to the balance per company’s books.
a)
Accounts Payable
b)
Journal Entries
c)
True Values
d)
Marketable Securities
55.
What are the advantages of marketable securities? (Select all that apply)
a)
Hold Cash Value
b)
Highly liquid
c)
Can be sold and/or purchased quickly
d)
Don't count as assets
56.
What is the formula for calculating interest?
a)
Principal * Rate
b)
Principal * Rate * Time
c)
Principal + Time/Rate
d)
Principal + Rate + Time
57.
What is the formula for calculating Maturity Value?
a)
Principal + Interest
b)
Principal * Interest
c)
Time * Principal/Interst
d)
Principal/Interest
58.
In a period of rising prices, which of the following inventory methods results in the highest net income?
a)
FIFO
b)
LIFO
c)
Average cost
d)
Periodic inventory
e)
Perpetual inventory
59.
An inventory valuation method affects:
a)
The cost of goods sold but not the balance sheet
b)
The balance sheet but not the cost of goods sold
c)
Both the income statement and balance sheet
d)
Neither the income statement nor balance sheet
e)
The cost of goods sold but not the income statement
60.
An inventory costing method where the cost of ending inventory is computed by identifying the cost of each item in ending inventory from specific purchase invoices
a)
LIFO
b)
FIFO
c)
Specific Identification Method
d)
Retail Method
61.
An inventory costing method in which the inventory is priced based on an average of all prices paid for inventory during the period.
a)
Average Cost Method
b)
FIFO
c)
LIFO
d)
Moving-Average Method
62.
An actual count of all inventory items on hand which is usually performed annually by companies to ensure that that the actual quantity of goods on hand matches the quantity in the accounting records.
a)
Inventory Layer
b)
Goods Flow
c)
Cost Flow
d)
Physical Inventory
63.
An inventory costing method based on the assumption that the cost of the most recently acquired merchandise should be assigned to the first items sold
a)
FIFO
b)
Retail Method
c)
LIFO
d)
Moving Average Method
64.
An inventory costing method based on the assumption that the first merchandise acquired is the first merchandise sold and that the ending inventory consists of the most recently acquired goods
a)
LIFO
b)
FIFO
c)
Retail Method
d)
Moving Average Method
65.
A method of inventory pricing in which goods are valued at original cost or replacement cost, whichever is lower
a)
Retail method
b)
Replacement Method
c)
lower-of-cost-or-market (LCM)
d)
Moving Average Method
66.
The actual physical movement of goods in the operations of a company
a)
Goods Flow
b)
Merchandise Inventory
c)
Physical Inventory
d)
Market Movement
67.
All goods owned and held for sale to customers in the regular course of business.
a)
Market Value
b)
Merchandise Inventory
c)
Cost Flow
d)
Assets
68.
The amount a company would currently pay to purchase merchandise (goods) from their usual suppliers and in their usual quantities
a)
Physical Inventory
b)
Replacement Cost
c)
Cost Flow
d)
Market Value
69.
Land held for future use by a company and not intended for operations should be classified as:
a)
(a) Property, plant, and equipment
b)
(b) An intangible asset
c)
(c) Inventory
d)
(d) An Investment
e)
(e) A current asset
70.
The systematic allocation of the cost of an intangible asset to expense over the periods it benefits.
a)
Depreciation
b)
Estimated Useful Life
c)
Amortization
d)
Depletion
71.
Allocating the cost of a natural resource to the units removed as the resource is mined, pumped, cut, or otherwise consumed.
a)
Depletion
b)
Depreciation
c)
Amortization
d)
Salvage Value
72.
The systematic allocation of the cost of a property, plant, and equipment asset to expense over its estimated useful life
a)
Depletion
b)
Amortization
c)
Franchising
d)
Depreciation
73.
Long-Term Assets purchased for the purpose of extracting and removing some valuable resource such as oil, gas, lumber, or minerals.
a)
Patents
b)
Trademarks
c)
Natural Resources
d)
Book Values
74.
A depreciation method that allocates the cost of a depreciable asset less residual value to depreciation expense based on the units of output that the asset is expected to produce.
a)
Relative Sales Value Method
b)
Units of Production Method
c)
Straight Line Method
d)
Double Declining Method
75.
A repair to a fixed asset that increases its estimated useful life and/or residual value.
a)
Salvage Value
b)
Capital Expenditure
c)
Amortization
d)
Extraordinary Repair
76.
An accelerated depreciation method that allocates a larger portion of an asset’s cost to depreciation expense in the early years of an asset’s life and a smaller portion of an asset’s cost to depreciation expense toward the end of an asset’s life.
a)
Double Declining Method
b)
Straight Line Method
c)
Units of Production Method
d)
Half Year Convention
77.
A practice where companies take six months’ depreciation in the year of acquisition and also in the year of disposition, rather than computing depreciation for partial periods to the nearest month.
a)
Units of Production Method
b)
Amortization
c)
half year convention
d)
relative sales value method
78.
Long-Term Assets that have no physical substance but have a value based on the rights or benefits accruing to the owner.
a)
Natural Resources
b)
lump sum purchases
c)
intangible assets
d)
tangible assets
79.
An exclusive right granted by the federal government to reproduce and sell literary or artistic materials and computer programs.
a)
Copyrights
b)
Patents
c)
Research and Development
d)
Franchise
80.
Any material expenditure by a company that will benefit several accounting periods.
a)
Capital Expenditures
b)
Revenue Expenditures
c)
Natural Resources
d)
Tangible Assets
81.
The length of service expected from the asset.
a)
Residual Value
b)
Salvage Value
c)
Useful Life
d)
Book Value
82.
Plant assets that have physical substance including land, buildings, and equipment.
a)
Intangible Assets
b)
Trademark
c)
Tangible Assets
d)
Depreciation
83.
Expenditures that will benefit only the current accounting period and are recorded as expenses in the current year.
a)
Revenue Expenditures
b)
Capital Expenditures
c)
Book Values
d)
Salvage Values
84.
A depreciation method that records equal amounts of depreciation expense over the useful life of an asset.
a)
Double Declining Method
b)
Straight Line Method
c)
Relative Sales Value Method
d)
Lump Sum Method
85.
The cost of a fixed asset less its residual (salvage) value.
a)
Depreciable Cost of an Asset
b)
Book Value
c)
Salvage Value
d)
Not the correct answer
86.
.A financial statement that reports assets, liabilities, and owner’s equity on a specific date.
a)
profit and loss statement
b)
cash flow
c)
balance sheet
d)
income statement
87.
Kathy wants to know whether her boutique made or lost money this month. The financial document she should view is her:
a)
balance sheet
b)
income statement
c)
cash flow statement
d)
statement of owner’s equity
88.
Functional depreciation should be considered in estimating the useful life of computer equipment.
a)
True
b)
False
89.
In which of the following two methods the amount of depreciation remains the same throughout
a)
Straight line method
b)
Diminishing balance method
90.
An asset was purchased for Rs. 12,500 and was depreciated under Reducing Balance Method at the rate of 20% p.a. What is the value of the asset at the end of three years?
a)
8000
b)
10000
c)
6400
d)
1600
91.
Allocating a plant asset’s cost over its useful life.
a)
Amortization
b)
Appreciation
c)
Depreciation
d)
Liquidation
92.
Which of the following is NOT an example of intangible assets?
a)
Patent
b)
Bonds
c)
Trademark
d)
Copyright
93.
The Balance Sheet must (a) balance
Choose from the below words
ALWAYS
Sometimes
not necessarily
RARELY
94.
If Company A has:
$2,300 in Cash
$400 in Accounts Payable
$500 in Accounts Receivable
$1,100 in Bank Loans
What is Company A's Owners Equity?
95.
What is this?
a)
Balance Sheet
b)
Income Statement
c)
ProForma
d)
Profit and Loss Statement
96.
Deferred revenue is revenue that is ________.
a)
earned but the cash has not been received
b)
not earned but the cash has been received
c)
not earned and the cash has not been received
d)
earned and the cash has been received
97.
What is the purpose of adjusting entries in the context of accrued expenses?
a)
To ensure that expenses are recorded in the period they are incurred
b)
To correct errors made during the accounting period
c)
To prepare the trial balance
d)
To increase cash flow
98.
Which of the following is not a typical accrued expense?
a)
Accrued rent
b)
Accrued salaries
c)
Prepaid insurance
d)
Accrued utilities
99.
Match the following
a)
Promises of payment from customers to sellers.
1.
Accounts Receivable
b)
Resources a company owns or controls.
2.
Assets
c)
Creditors' claims on assets.
3.
Liabilities
d)
Owner's claim on assets.
4.
Equity
e)
Increases equity from sales of products and services.
5.
Revenue
100.
Amount owed by a business
a)
liability
b)
asset
c)
capital
d)
account
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