Financial Accounting Quiz
1. The accounting process involves all of the following except
a. identifying economic transactions that are relevant to the business.
b. communicating financial information to users by preparing financial reports.
c. recording nonquantifiable economic events.
d. analyzing and interpreting financial reports.
2. Financial accounting provides economic and financial information for all of the following except
a. creditors.
b. investors.
c. managers.
d. other external users.
3. Generally accepted accounting principles are
a. income tax regulations of the Internal Revenue Service.
b. standards that indicate how to report economic events.
c. theories that are based on physical laws of the universe.
d. principles that have …show more content…
an expense account.
b. a stockholders' equity account.
c. a liability account.
d. a contra asset account.
12. Sue Smiley has performed $500 of CPA services for a client but has not billed the client as of the end of the accounting period. What adjusting entry must Sue make?
a. Debit Cash and credit Unearned Revenue
b. Debit Accounts Receivable and credit Unearned Revenue
c. Debit Accounts Receivable and credit Service Revenue
d. Debit Unearned Revenue and credit Service Revenue
13. After the adjusting entries are journalized and posted to the accounts in the general ledger, the balance of each account should agree with the balance shown on the
a. adjusted trial balance.
b. post-closing trial balance.
c. the general journal.
d. adjustments columns of the worksheet.
14. The net income (or loss) for the period
a. is found by computing the difference between the income statement credit column and the balance sheet credit column on the worksheet.
b. cannot be found on the worksheet.
c. is found by computing the difference between the income statement columns of the worksheet.
d. is found by computing the difference between the trial balance totals and the adjusted trial balance …show more content…
$48,000 income.
b. $10,000 income.
c. $10,000 loss.
d. not determinable.
16. Earnings per share is a. net income divided by the number of common shares outstanding. b. the market price of the stock divided by the number of shares outstanding. c. gross profit divided by the number of common shares outstanding d. reported on the balance sheet.
17. All of the following are measures of profitability except a. working capital. b. profit margin. c. return on common stockholders’ equity. d. return on assets.
18. The principle that requires circumstances and events that make a difference to financial statement users be reported is the a. cost principle. b. full disclosure principle. c. matching principle. d. revenue recognition principle.
19. Companies that are subject to, but fail to comply with, the Sarbanes-Oxley Act of 2002
a. may do so legally by obtaining an exemption.
b. will be automatically dissolved.
c. may be subject to fines and officer imprisonment.
d. may be forced to sell their foreign subsidiaries.
20. An example of poor internal control is
a. The accountant should not have physical custody of the asset nor access to
a. identifying economic transactions that are relevant to the business.
b. communicating financial information to users by preparing financial reports.
c. recording nonquantifiable economic events.
d. analyzing and interpreting financial reports.
2. Financial accounting provides economic and financial information for all of the following except
a. creditors.
b. investors.
c. managers.
d. other external users.
3. Generally accepted accounting principles are
a. income tax regulations of the Internal Revenue Service.
b. standards that indicate how to report economic events.
c. theories that are based on physical laws of the universe.
d. principles that have …show more content…
an expense account.
b. a stockholders' equity account.
c. a liability account.
d. a contra asset account.
12. Sue Smiley has performed $500 of CPA services for a client but has not billed the client as of the end of the accounting period. What adjusting entry must Sue make?
a. Debit Cash and credit Unearned Revenue
b. Debit Accounts Receivable and credit Unearned Revenue
c. Debit Accounts Receivable and credit Service Revenue
d. Debit Unearned Revenue and credit Service Revenue
13. After the adjusting entries are journalized and posted to the accounts in the general ledger, the balance of each account should agree with the balance shown on the
a. adjusted trial balance.
b. post-closing trial balance.
c. the general journal.
d. adjustments columns of the worksheet.
14. The net income (or loss) for the period
a. is found by computing the difference between the income statement credit column and the balance sheet credit column on the worksheet.
b. cannot be found on the worksheet.
c. is found by computing the difference between the income statement columns of the worksheet.
d. is found by computing the difference between the trial balance totals and the adjusted trial balance …show more content…
$48,000 income.
b. $10,000 income.
c. $10,000 loss.
d. not determinable.
16. Earnings per share is a. net income divided by the number of common shares outstanding. b. the market price of the stock divided by the number of shares outstanding. c. gross profit divided by the number of common shares outstanding d. reported on the balance sheet.
17. All of the following are measures of profitability except a. working capital. b. profit margin. c. return on common stockholders’ equity. d. return on assets.
18. The principle that requires circumstances and events that make a difference to financial statement users be reported is the a. cost principle. b. full disclosure principle. c. matching principle. d. revenue recognition principle.
19. Companies that are subject to, but fail to comply with, the Sarbanes-Oxley Act of 2002
a. may do so legally by obtaining an exemption.
b. will be automatically dissolved.
c. may be subject to fines and officer imprisonment.
d. may be forced to sell their foreign subsidiaries.
20. An example of poor internal control is
a. The accountant should not have physical custody of the asset nor access to