ACCT 2301 Exam 1- Part 1
ACCT 2301 Exam 1- Part 1 ACCT2301
Popular in Principle of Accounting I
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This 11 page Study Guide was uploaded by Laxman Bista on Thursday February 18, 2016. The Study Guide belongs to ACCT2301 at University of Texas at Arlington taught by Galen D. Carpenter in Spring 2016. Since its upload, it has received 99 views. For similar materials see Principle of Accounting I in Accounting at University of Texas at Arlington.
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Date Created: 02/18/16
1. Which of the following accounting principles would prescribe that all goods and services purchased is recorded at cost? A. Goingconcern principle B. Continuingconcern principle C. Cost principle D. Business entity principle E. Consideration principle 2. An Asset is: A. only acquired with cash B. something the company owns C. only contributed by stockholders D. a company's obligation to pay E. is also called contributed capital 3. A financial statement providing information that helps users understand a company's financial status and which lists the types and amounts of assets, liabilities and equity as of a specific date is called a(n): A. Balance sheet B. Income statement C. Statement of cash flows D. Statement of retained earnings E. Financial status statement 4. Marian Mosely is the owner of Mosely Accounting Services. Which accounting principle requires Marian to keep her personal financial information separate from the financial information of Mosely Accounting Services? A. Monetary unit principle B. Goingconcern principle C. Cost principle D. Business entity principle E. None of these. Since Marian is a sole proprietor, she is not required to separate her personal financial information from the financial information of Mosely Accounting Services 5. On December 15, 2008, Myers Legal Services signed a $50,000 contract with a client to provide legal services to the client in 2009. Which accounting principle would require Myers Legal Services to record the legal fees revenue in 2009 and not 2008? A. Monetary unit principle B. Goingconcern principle C. Cost principle D. Business entity principle E. Revenue recognition principle 6. To include the personal assets and transactions of a business's owner in the records and reports of the business would be in conflict with the: A. Objectivity principle B. Realization principle C. Business entity principle D. Goingconcern principle E. Revenue recognition principle 7. The accounting guideline prescribing that financial statement information be supported by independent, unbiased evidence other than someone's belief or opinion is the: A. Business entity principle B. Monetary unit principle C. Goingconcern principle D. Cost principle E. Objectivity principle 8. The income statement reports all of the following except: A. Revenues earned by a business B. Expenses incurred by a business C. Assets owned by a business D. Net income or loss earned by a business E. The time period over which the earnings occurred 9. Which of the following is the primary purpose of accounting? A. To establish a business B. To identify, record and communicate business transactions C. To deceive stockholders D. To keep from paying taxes E. To establish credit for a company 10. Which of the following statements is not true about assets? A. They are economic resources owned or controlled by the business B. They are expected to provide future benefits to the business C. They appear on the balance sheet D. They appear on the statement of retained earnings E. Claims on them are shared between creditors and owners 11. The accounting process begins with: A. Analysis of business transactions and events B. Preparation of financial statements and other reports C. Summarizing the recorded effects of business transactions D. Presentation of financial information to decisionmakers E. Preparation of the trial balance 12. Which of the following list of events properly reflects the early steps taken in the accounting process? A. Record relevant transactions, Post journal information to ledger accounts Analyze each transaction, Prepare and analyze the trial balance B. Post journal information to ledger accounts, Analyze each transaction, Post journal information to ledger accounts, Prepare and analyze the trial balance C. Prepare and analyze the trial balance, Analyze each transaction, Post journal information to ledger accounts, Record relevant transactions D. Analyze each transaction, Post journal information to ledger accounts, Record relevant transactions, Prepare and analyze the trial balance E. Analyze each transaction, Record relevant transactions, Post journal information to ledger accounts, Prepare and analyze the trial balance 13. Source documents include all of the following except: A. Sales tickets B. Ledgers C. Checks D. Purchase orders E. Bank statements 14. A record of the increases and decreases in a specific asset, liability, equity, revenue or expense is a(n): A. Journal B. Posting C. Trial balance D. Account E. Chart of accounts 15. Which of the following statements is correct? A. When a future expense is paid in advance, the payment is normally recorded in a liability account called Prepaid Expense B. Promises of future payment are called accounts payable C. Increases and decreases in cash are always recorded in the retained earnings account D. An account called Land is commonly used to record increases and decreases in both the land and buildings owned by a business E. Accrued liabilities include accounts receivable 16. Unearned revenues are: A. Revenues that have been earned and received in cash B. Revenues that have been earned but not yet collected in cash C. Liabilities created when a customer pays in advance for products or services before the revenue is earned D. Recorded as an asset in the accounting records E. Increases to retained earnings 17. Which of the following is the appropriate journal entry if a company performs a service and is paid immediately? A. Debit to Cash, Debit to Revenue B. Debit to Cash, Credit to Revenue C. Debit to Accounts Receivable, Credit to Cash D. Debit to Revenue, Credit to Accounts Receivable E. Debit to Accounts Receivable, Credit to Revenue 18. If the Debit and Credit column totals of a trial balance are equal, then: A. All transactions have been recorded correctly B. All entries from the journal have been posted to the ledger correctly C. All ledger account balances are correct D. The total debit entries and total credit entries are equal E. The balance sheet would be correct 19. Which of the following statements is true? A. If the trial balance is in balance, it proves that no errors have been made in recording and posting transactions B. The trial balance is a book of original entry C. Another name for trial balance is chart of accounts D. The trial balance is a list of all accounts from the ledger with their balances at a point in time E. The trial balance is another name for the balance sheet as long as debits balance with credits 20. A general journal is: A. A ledger in which amounts are posted from a balance column account B. Not required if Taccounts are used C. A complete record of each transaction in the place from which transaction amounts are posted to the ledger accounts D. Not necessary in electronic accounting systems E. A book of final entry because financial statements are prepared from it 21. Which of the following identifies the proper order of the accounting cycle? A. Analyze, Journalize, Unadjusted Trial Balance B. Analyze, Post, Unadjusted Trial Balance C. Journalize, Post, Adjusted Trial Balance D. Unadjusted Trial Balance, Adjusted Trial Balance, Close E. Adjusted Trial Balance, Adjustments, Financial Statements 22. A broad principle that requires identifying the activities of a business with specific time periods such as months, quarters or years is the: A. Operating cycle of a business B. Time period principle C. Goingconcern principle D. Matching principle E. Accrual basis of accounting 23. Adjusting entries: A. Affect only income statement accounts B. Affect only balance sheet accounts C. Affect both income statement and balance sheet accounts D. Affect only cash flow statement accounts E. Affect only equity accounts 24. The main purpose of adjusting entries is to: A. Record external transactions and events B. Record internal transactions and events C. Recognize assets purchased during the period D. Recognize debts paid during the period E. Correct errors 25. The broad principle that requires expenses to be reported in the same period as the revenues that were earned as a result of the expenses is the: A. Recognition principle B. Cost principle C. Cash basis of accounting D. Matching principle E. Time period principle 26. Which of the following accounts would not be impacted by adjusting journal entries? A. Accounts Receivable B. Consulting Fee Earned C. Unearned Consulting Fees D. Cash E. Wages Payable 27. A postclosing trial balance is prepared A. Immediately after all closing entries have been recorded and posted B. Immediately before all closing entries have been recorded and posted C. Immediately before a business ceases to exist D. Immediately before a business starts operations E. At different times in the accounting cycle depending on the nature of the business and the complexity of the accounting records 28. The Income Summary account is used: A. To adjust and update asset and liability accounts B. To close the revenue and expense accounts C. To determine the appropriate dividend amount D. In some situations to replace the income statement E. To replace the retained earnings account in some businesses 29. Financial statements are typically prepared in the following order: A. Balance sheet, statement of retained earnings, income statement B. Statement of retained earnings, balance sheet, income statement C. Income statement, balance sheet, statement of retained earnings D. Income statement, statement of retained earnings, balance sheet E. Balance sheet, income statement, statement of retained earnings 30. The adjusted trial balance contains information pertaining to: A. Asset accounts only B. Balance sheet accounts only C. Income statement accounts only D. All general ledger accounts E. Revenue accounts only 31. If a company records prepayment of expenses in an asset account, the adjusting entry would: A. Result in a debit to an expense and a credit to an asset account B. Cause an adjustment to prior expense to be overstated and assets to be understated C. Cause an accrued liability account to exist D. Result in a debit to a liability and a credit to an asset account E. Decrease cash 32. The adjusting entry to record the earned but unpaid salaries of employees at the end of an accounting period is: A. Debit Unpaid Salaries and credit Salaries Payable B. Debit Salaries Payable and credit Salaries Expense C. Debit Salaries Expense and credit Cash D. Debit Salaries Expense and credit Salaries Payable E. Debit Cash and credit Salaries Expense 33. Expenses incurred but unpaid that are recorded during the adjusting process with a debit to an expense and a credit to a liability are: A. Intangible expenses B. Prepaid expenses C. Unearned expenses D. Net expenses E. Accrued expenses 34. Kader Co. paid a total of $35,000 in dividends during the current year. The entry needed to close the dividends account is: A. Debit Income Summary and credit Cash for $35,000 B. Debit Dividends and credit Cash for $35,000 C. Debit Income Summary and credit Dividends for $35,000 D. Debit Retained Earnings and credit Dividends for $35,000 E. Debit Dividends and credit Retained earnings for $35,000 35. A company had revenues of $75,000 and expenses of $62,000 for the accounting period. Which of the following entries could not be a closing entry? A. B. C. D. E. All of the above are possible closing entries 36. A trial balance prepared before any adjustments have been recorded is: A. An adjusted trial balance B. Used to prepare financial statements C. An unadjusted trial balance D. Correct with respect to proper balance sheet and income statement amounts E. Only prepared once a year 37. Which of the following statements is incorrect? A. An income statement reports revenues earned less expenses incurred B. An unadjusted trial balance shows the account balances after they have been revised to reflect the effects of endofperiod adjustments C. Interim financial reports can be based on onemonth or threemonth accounting periods D. The fiscal year is any 12 consecutive months (or 52 weeks) used by a business as its annual accounting period E. Property, plant and equipment are referred to as plant assets 38. The difference between the cost of an asset and the accumulated depreciation for that asset is called A. Depreciation Expense B. Unearned Depreciation C. Prepaid Depreciation D. Depreciation Value E. Book Value 39. Which of the following does not require an adjusting entry at yearend? A. Accrued interest on notes payable B. Supplies used during the period C. Cash investments by stockholders D. Accrued wages E. Expired portion of prepaid insurance 40. Which of the following assets is not depreciated? A. Store fixtures B. Computers C. Land D. Buildings E. Vehicles
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