General Financial Accounting Test
________________
is the financial obligation of a company in regards to a loan that accrues with
the passage of time.
a. Interest
Payable
b. Income
Tax Payable
c. Income
Tax Expense
d. Accounts
Payable
Which
of the following accounts represents distributions of earnings to shareholders
of the firm?
a. Dividends
b. Retained
Earnings
c. Rent
Expense
d. Payroll
Expense
Which
of the following accounts is NOT a temporary account that should be closed
during the closing process?
a. Prepaid
Insurance
b. Cost
of Goods Sold
c. Sales
Revenue
d. Depreciation
The
cumulative amount of net income in excess of dividends declared that has been
earned by a business since its inception is called ___________________.
a. Premium
on Preferred Stock
b. Common
Stock
c. Retained
Earnings
d. Cash
Which
of the following is a permanent account?
a. Accumulated
Depreciation
b. Advances
from Customers
c. Both
a and b
d. Neither
a nor b
The
amount of income tax postponed for payments to future years is called
________________.
a. Deferred
Income Taxes
b. Deferred
Income
c. Unearned
Revenue
d. Advances
to Suppliers
In
preparing its year-end adjusting entries, XYZ Company neglected to adjust
prepaid insurance for the amount of insurance expired during Year 1. Which of
the following reflects the result of this error?
a. Year
1 net income is understated, the balance in retained earnings is understated,
and assets are understated.
b. Year
1 net income is overstated, the balance in retained earnings is overstated, and
assets are correctly stated.
c. Year
1 net income is overstated, the balance in retained earnings is overstated, and
assets are overstated.
d. None
of the above
______________
refers to shares originally issued and outstanding that have been reacquired
from the owners.
a. Treasury
Stock
b. Common
Stock
c. Preferred
Stock
d. Retained
Earnings
Amounts
received for the par value of a firm's voting stock are called ___________.
a. Common
Stock
b. Accounts
Receivable
c. Preferred
Stock
d. Retained
Earnings
XYZ
Company purchased some equipment for $120,000 on July 1 of Year 1. The
equipment has an estimated useful life of 10 years and an estimated salvage
value of $7,500. XYZ Company computes depreciation on a straight-line basis.
How much depreciation should be recorded for Year 1?
a. $12,000
b. $11,250
c. $6,000
d. $5,625
The
balance in the _________________ account reflects the cumulative depreciation
of an asset since its acquisition.
a. Depreciation
Expense
b. Income
Tax Liability
c. Rent
Expense
d. Accumulated
Depreciation
A
trial balance that shows revenue and expense accounts with zero balances and
balance sheet accounts at the end of the period is called a __________________.
a. Balance
Sheet
b. Pre-Closing
Trial Balance
c. Post-Closing
Trial Balance
d. Income
Statement
The
process of recording transactions in the general journal or in a special
journal is called ________________.
a. journalizing
b. posting
c. financial
reporting
d. cash
reporting
Which
of the following liabilities would be accounted for at the present value of
future cash payments?
a. Accounts
Payable
b. Bonds
Payable
c. Income
Taxes Payable
d. Advances
from Customers
Temporary
revenue and expense accounts may be closed _________________.
a. individually
by separate entries to Retained Earnings
b. in a
single entry to Retained Earnings
c. to
a temporary "Income Summary" account
d. Any
of the above methods is acceptable.
The
Accumulated Depreciation account reflects _____________________.
a. depreciation
for the current accounting period only
b. cumulative
depreciation on the asset since acquisition
c. the
amount of depreciation that can be taken in future periods
d. None
of the above
The
Balance Sheet reflects the application of various valuation methods. Which of
the following methods may be used on a Balance Sheet that follows generally
accepted accounting principles?
a. Acquisition
cost
b. Current
cash equivalent value
c. Present
value of future cash flows
d. All
of the above
A
____________ is the right to use property owned by someone else.
a. purchase
b. lease
c. prepaid
asset
d. deferred
revenue
Payments
made in advance for goods or services a firm will receive at a later date are
called ______________.
a. Deferred
Income
b. Deferred
Tax liability
c. Advances
to Suppliers
d. Unearned
Revenue
Amounts
owed for goods or services acquired under an informal credit agreement are
called ___________________.
a. Accounts
Payable
b. Notes
Payable
c. Money
Market Funds
d. Common
Stock
Stocks
and bonds that can be readily converted into cash are called _____________.
a. Current
Assets
b. Current
Liabilities
c. Marketable
Securities
d. Treasury
Stock
The
normal balances in Depreciation Expense and its related Accumulated Depreciation
accounts are ______________________.
a. debit
and credit respectively
b. credit
and debit respectively
c. Both
are debit
d. Both
are credit
The
charge made to the current operations for the portion of cost of long-lived
assets consumed during the current period is called _________________.
a. accumulated
depreciation
b. rent
expense
c. indirect
labor
d. depreciation
Which
of the following is a type of liquid asset, such as a demand deposit?
a. Cash
b. Notes
Receivable
c. Accounts
Receivable
d. Fixed
Assets
Which
of the following is NOT an account title for liabilities?
a. Advances
to suppliers
b. Advances
from tenants
c. Rent
received in advance
d. Advances
from customers
XYZ
Company reported a balance in Accounts Receivable of $40,500 on January 1 of
year 2. During Year 2, the company collected $127,500 from its
customers who had purchased on account. On December 31 of Year 2, the company
reported a balance in Accounts Receivable of $21,250. How much were XYZ
Company's credit sales for Year 2?
a. $108,250
b. $129,500
c. $146,750
d. $148,750
A
residual claim of owners having certain preferences relative to other owners'
claims is called __________________.
a. Treasury
Stock
b. Retained
Earnings
c. Preferred
Stock
d. Common
Stock
At
the beginning of the year, XYZ Company reported Accounts Receivable of $39,000.
During the year, the company had credit sales totaling $288,000. At year end,
the Accounts Receivable balance was $8,000 higher than the beginning balance.
How much cash was collected on the accounts during the year?
a. $296,000
b. $288,000
c. $280,000
d. $272,000
Goods
on hand that have been purchased for resale are called ______________.
a. cash
b. COGS
c. assets
d. inventory
________________
is/are a measure of the inflow of net assets from selling goods and providing
services.
a. Revenues
b. Liabilities
c. Assets
d. Equity
Which
of the following operations is NOT considered part of the accounting process
leading to financial statement preparation?
a. Journalizing
transactions
b. Posting
to the general ledger
c. Adjusting
accounts
d. Auditing
statements
Unused
materials for manufacturing products are called ______________.
a. COGS
b. Accounts
Receivable
c. depreciation
d. inventory
Amounts
borrowed by a business for a relatively long period of time under a formal
written contract or indenture are called _________________.
a. Unsecured
Loans
b. Current
Liabilities
c. Bonds
Payable
d. Cash
At
the beginning of the year, XYZ Company owed $14,500 to its creditors for
inventory purchases. At year end, the company owed $9,150. During the year, the
company made payments totaling $48,500 to its creditors for inventory
purchases. What was the cost of the additional inventory that was purchased
during the year?
a. $7,650
b. $43,150
c. $53,650
d. $39,350
On
December 26 of Year 1, XYZ Company hired three sales associates to begin work
immediately on an after-Christmas sale. The associates were paid on January 9
of Year 2. Disregarding amounts, what entry should have been made on December
31 of Year 1?
a. Dr:
Salary Expense, Cr: Salary Payable
b. Dr:
Salary Expense, Cr: Cash
c. Dr:
Salary Payable, Cr: Cash
d. Dr:
Salary Payable, Cr: Salary Expense
The
process of transferring entries in the general journal to the accounts in the
general ledger is called ________________.
a. posting
b. journalizing
c. financial
reporting
d. taxation
XYZ
Company failed to record the purchase of inventory on account at the end of
2008. In which of the following ways is the Balance Sheet misstated?
a. Assets
and liabilities are both understated.
b. Assets
are understated and liabilities are overstated.
c. Assets
and shareholders' equity are both understated.
d. Assets,
liabilities, and shareholders' equity are all correctly stated.
Which
of the following options would NOT be classified as a current liability
account?
a. Accounts
Payable
b. Interest
Payable
c. Rent
Received in Advance
d. All
of the above are current liability accounts
XYZ
Company purchased a 1-year insurance policy for $3,000 on April 1 of Year 1.
The amount of prepaid insurance reported on the Balance Sheet and the amount of
insurance expense reported on the Income Statement on December 31 of Year 1
are, respectively:
a. $750
and $2,250
b. $2,250
and $750
c. $1,000
and $2,000
d. $2,000
and $1,000
Amounts
due from customers, for which the claim is in the form of a written promise to
pay, are called ________________.
a. Trade
Payables
b. Accounts
Receivable
c. Equity
d. Notes
Receivable