Balance Sheet

Which statement below provides financial position information of a firm?

A) Income Statement

B) Statement of retained earnings

C) Statement of shareholders' equity

D) Balance Sheet

Relevance

Predictive value is an ingredient of which term...

Faithful Representation

Relevance

Both Faithful Representation and Relevance

AICPA

Which organization below is the professional organization for all CPAs in the United States?

A) FASB

B) PCAOB

C) AICPA

D) IASB

The Codification Databse of the FASB

The major sources of U.S. generally accepted accounting principles are 

A) general practice

B) SEC regulations

C) IFRS

D) The Codification Database of the FASB

$20 / $52

On 1/31/16, a company prepaid the $72 rental fee for a parking lot it leases. The rental fee covered a 3 year period beginning 3/1/16. What is the effect of this transaction on the 12/31/16 financial statements for each of the following, Current Expenses and Prepaid Expenses?

A) $0 / $72

B) $22 / $50

C $24 / $48

D) $20 / $52

An accrued expense

In reviewing a set of journal entries, you encounter an entry composed of a debit to interest expense and a credit to interest payable. The purpose of this journal entry is to record...

A) a deferred expense

B) an accrued expense

C) a contingent liability

D) an unexpired cost

Total assets less total liabilities

As generally used, the term "net assets" represents which of the following?

A) retained earnings of a coporation

B) current assets less current liabilities

C) working capital

D) total assets less total liabilities

E) none of the above

Relevance

According to the conceptual framework, "confirmatory value" is a charactersitic of...

A) understandability

B) faithful representation

C) relevance

D) both relevance and faithful representaiton

conversion of non-cash resources or rights into cash or rights to cash

Realization is the...

A) Process of earning revenue as economic utility is added to goods produced

B) recording of revenues in the accounting records

C) matching of expenses incurred in earning revenues of the period to those revenues

D) conversion of non-cash resources or rights into cash or rights to cash

Long-term Investment

Sinking funds, to be used for construction in 5 years is part of...

A) Current Asset

B) Long-term investment

C) PPE

D) Intangible Asset

E) None of the above

Monetary unit assumption

ABC Corporation records business transactions in dollars and disregards changes in the value of a dollar over time. Which of the following accounting assumptions does this represent?

A) Economic entity assumption

B) Going concern assumption

C) Accounting period assumption

D) Monetary unit assumption

Goodwill

Which of the following is not a temporary account?

A) Dividends distributed

B) Goodwill

C) Cost of Goods Sold

D) Depreciation Expense

E) Dividend revenue

Sales Discount

All of the following items would appear on the balance sheet except:

A) a patent obtained on a new maufacturing process

B) Accumulated depreciation

C) an investment in two-year certificates of deposit

D) current portion of the long-term debt

E) sales discount

Statement of Shareholders' Equity

Dividends distributed can be found in:

A) Income statement

B) Statement of Comprehensive Income

C) Balance Sheet

D) Statement of financial position

E) Statement of shareholders' equity

Posting, Adjusting, Closing, Reversing

The correct order of the following steps of the accounting cycle is:

A) Posting, closing, adjusting, reversing

B) Closing, adjusting, posting, reversing

C) Posting, adjusting, closing, reversing

D) Posting, reversing, adjusting, closing

Net income (loss) on the income statement

Adjusting entries are needed to correctly measure the:

A) Ending balance in the Cash account

B) Net income or loss on the income statement

C) Net income or loss on the balance sheet

D) beginning balance in the cash account

Credit balance

What is the normal balance of Retained Earnings?

A) Credit Balance

B) Debit Balance

C) None of the above

FASB

GAAP is currently formulated by the:

A) SEC

B) FASB

C) IMA

D) AICPA

E) PCAOB

Debit income summary and credit insurance expense

Which of the following entries will be necessary to close the insurance expense account at the end of the year?

A) debit insurance expense and credit income summary

B) debit insurance expense and credit common stock

C) debit retained earnings and credit insurance expense

D) debit income summary and credit insurance expense

Incurred but not received

An accrued revenue is revenue that is:

A) incurred but not paid

B) Incurred but not received

C) Incurred and received

D) received but not incurred

E) not resonably estimable

Accumulated depreciation

Which of the following is a permanent account?

A) Accumulated depreciation

B) dividends distributed

C) depreciation expenses

D) sales returns and allowances

E) none of the above

All of the above

Accounting is the information system that:

A) measures business activities

B) communicates the results to decision makers

C) processes information into reports

D) all of the above

Retained Earnings

Which of the following will not appear on the income statement?

A) Net loss

B) revenues

C) retained earnings

D) depreciation expense

E) sales discounts and allowances

Current Assets - Current Liabilities

What is the equation for obtaining working capital?

Current Assets / Current Liabilities