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Accounting Unit- Practice Quiz Answers

These are answers to an accounting quiz for business orientation class...

Course

Graduate Business Orientation (BADM 401)

University

Roosevelt University

Academic year: 2020/2021

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Zayna Alsaid

Roosevelt University

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Business Orientation

Accounting

Module 1: Intro to Accounting and Business

 Question 1

4 out of 4 points

Which of the following is a manufacturing business?

Selected Answer:

General Motors

 Question 2

4 out of 4 points

Which of the following would not normally operate as a service business?

Selected Answer:

grocer

 Question 3

4 out of 4 points

Which of the following is not a business transaction?

Selected Answer:

Erin pays her monthly personal credit card bill.

 Question 4

0 out of 4 points

Donner Company is selling a piece of land adjacent to its business premises. An appraisal reported

the market value of the land to be $220,000. The Focus Company initially offered to buy the land for

$177,000. The companies settled on a purchase price of $212,000. On the same day, another piece of

land on the same block sold for $232,000. Under the cost principle, at what amount should the land

be recorded in the accounting records of Focus Company?

Selected Answer:

$177,

 Question 5

0 out of 4 points

Which of the following are guidelines for behaving ethically?

I. Identify the consequences of a decision and its effect on others.

II. Consider your obligations and responsibilities to those affected by

the decision.

III. Identify your decision based on personal standards of honesty and

fairness.

Selected Answer:

I and II.

 Question 6

4 out of 4 points

Some of the major fraudulent acts by senior executives started as what they considered to be small

ethical lapses which grew out of control.

Selected Tru

Answer: e

 Question 7

4 out of 4 points

Two factors that typically lead to ethical violations are relevance and timeliness of accounting

information.

Selected Answer:

Fals e

 Question 8

4 out of 4 points

Which of the following financial statements reports information as of a specific date?

Selected Answer:

balance sheet

 Question 9

0 out of 4 points

If total assets decreased by $88,000 during a period of time and stockholders' equity increased by

$71,000 during the same period, then the amount and direction (increase or decrease) of the period's

change in total liabilities is

Selected Answer:

a $17,000 increase

 Question 10

4 out of 4 points

Receiving payments on an account receivable increases both equity and assets.

Selected Answer:

Fals e

 Question 11

4 out of 4 points

Financial accounting provides information to all users, while the main focus for managerial

accounting is to provide information to the management.

Selected Answer:

Tru e

 Question 12

4 out of 4 points

About 90% of the businesses in the United States are organized as corporations.

Selected Answer:

Fals e

 Question 13

4 out of 4 points

Two common areas of accounting that respectively provide information to internal and external users

are

Selected Answer:

managerial accounting and financial

accounting

 Question 14

4 out of 4 points

Goods purchased on account for future use in the business, such as supplies, are called

Answer: e

 Question 23

4 out of 4 points

Which of the items below is not a business entity?

Selected Answer:

entrepreneurship

 Question 24

4 out of 4 points

The financial statement that presents a summary of the revenues and expenses of a business for a

specific period of time, such as a month or year, is called a(n)

Selected Answer:

income statement

 Question 25

4 out of 4 points

Proprietorships are owned by one owner and provide only services to their customers.

Selected Answer:

Fals e

Module 2: Analyzing Transactions

 Question 1

4 out of 4 points

A debit is abbreviated as Db. and a credit is abbreviated as Cr.

Selected Answer:

Fals e

 Question 2

4 out of 4 points

Dividends decrease stockholders' equity and are listed on the income statement as a deduction from

revenue.

Selected Answer:

Fals e

 Question 3

4 out of 4 points

Postings made to standard account forms show a new balance after each entry.

Selected Answer:

Tru e

 Question 4

0 out of 4 points

A transaction that is recorded in the journal is called a journal entry.

Selected Answer:

Fals e

 Question 5

4 out of 4 points

The post reference notation used in the journal is the page number.

Selected Answer:

Fals e

 Question 6

4 out of 4 points

The chart of accounts for the Miguel Company includes the following:

Account Name Account Number

Cash

11 Accounts Receivable

13 Prepaid Insurance

15 Accounts Payable

21 Unearned Revenue

24 Common Stock

31 Dividends

32 Fees Earned

41 Salaries Expense

54 Rent Expense

56 Page 3 of the journal contains the following transaction:

Cash

640 Fees Earned

640 What posting references will be found in the journal entry?

Selected Answer:

11, 41

 Question 7

4 out of 4 points

The trial balance is out of balance and the accountant suspects that a transposition or slide error has

occurred. What will the accountant do to confirm this suspicion?

Selected Answer:

Determine the amount of the error and divide by nine. If the result is evenly divided,

then this type of error is likely.

Answer: e

 Question 17

4 out of 4 points

A debit may signify a(n)

Selected Answer:

decrease in liability accounts

 Question 18

0 out of 4 points

Which of the following entries records the payment of insurance for the current month?

Selected Answer:

Prepaid Insurance, debit; Cash, credit

 Question 19

4 out of 4 points

In which of the following types of accounts are increases recorded by credits?

Selected Answer:

revenues and liabilities

 Question 20

4 out of 4 points

Assets are increased with debits and decreased with credits.

Selected Answer:

Tru e

 Question 21

4 out of 4 points

Which of the following accounts is a stockholders' equity account?

Selected Answer:

Common Stock

 Question 22

4 out of 4 points

Accounts

Selected Answer:

are records of increases and decreases in individual accounting equation

elements

 Question 23

4 out of 4 points

Proof that the dollar amount of the debits equals the dollar amount of the credits in the ledger means

Selected Answer:

only that the debit dollar amounts equal the credit dollar

amounts

 Question 24

4 out of 4 points

The accounts payable account is listed in the chart of accounts as an asset.

Selected Answer:

Fals e

 Question 25

4 out of 4 points

The process of recording a transaction in the journal is called

Selected Answer:

journalizing

Module 3: The Adjusting Process

 Question 1

4 out of 4 points

Prior to the adjusting process, accrued revenue has

Selected Answer:

been earned and not recorded as revenue

 Question 2

4 out of 4 points

Buster Industries pays weekly salaries of $30,000 on Friday for a five-day week ending on that

day. The adjusting entry necessary at the end of the fiscal period ending on Tuesday is

Selected Answer:

debit Salary Expense, $12,000; credit Salaries Payable, $12,

 Question 3

4 out of 4 points

Which of the following is an example of a prepaid expense?

Selected Answer:

Supplies

 Question 4

4 out of 4 points

A business pays biweekly salaries of $20,000 every other Friday for a ten-day period ending on that

day. The last payday of December is Friday, December 27. Assume the next pay period begins on

Monday, December 30, and the proper adjusting entry is journalized at the end of the fiscal period

(December 31). The entry for the payment of the payroll on Friday, January 10, includes a

Selected Answer:

debit to Salary Expense of $16,

 Question 5

4 out of 4 points

The cash basis of accounting records revenues and expenses when the cash is exchanged while the

accrual basis of accounting

Selected a.

Answer: e

 Question 14

4 out of 4 points

For the year ending December 31, Orion, Inc. mistakenly omitted adjusting entries for $1,500 of

supplies that were used, (2) unearned revenue of $4,200 that was earned, and (3) insurance of $5,

that expired. For the year ending December 31, what is the effect of these errors on revenues,

expenses, and net income?

Selected Answer:

net income is overstated by $2,

 Question 15

4 out of 4 points

The revenue recognition principle states that revenue should be recorded in the same period as the

cash is received.

Selected Answer:

Fals e

 Question 16

4 out of 4 points

The supplies account had a balance of $4,400 at the beginning of the year and was debited during the

year for $2,400, representing the total of supplies purchased during the year. If $400 of supplies are

on hand at the end of the year, the supplies expense to be reported on the income statement for the

year is

Selected Answer:

$6,

 Question 17

4 out of 4 points

A company pays an employee $3,000 for a five-day work week, Monday–Friday. The adjusting entry

on December 31, which is a Wednesday, is a debit to Wages Expense, $1,800, and a credit to Wages

Payable, $1,800.

Selected Answer:

Tru e

 Question 18

4 out of 4 points

The matching principle requires expenses be recorded in the same period that the related revenue is

recorded.

Selected Answer:

Tru e

 Question 19

4 out of 4 points

The account type and normal balance of Prepaid Expense is

Selected Answer:

asset, debit

 Question 20

4 out of 4 points

An adjusting entry would adjust an expense account so the expense is reported when incurred.

Selected Answer:

Tru e

 Question 21

4 out of 4 points

Using accrual accounting, expenses are recorded and reported only

Selected Answer:

when they are incurred, whether or not cash is paid

 Question 22

4 out of 4 points

Which of the accounting steps in the accounting process below would be completed last?

Selected Answer:

preparing the financial

statements

 Question 23

4 out of 4 points

A company realizes that the last two days' revenue for the month was billed but not recorded. The

adjusting entry on December 31 is a debit to Accounts Receivable and a credit to Fees Earned.

Selected Answer:

Tru e

 Question 24

4 out of 4 points

The net income reported on the income statement is $58,000. However, adjusting entries have not

been made at the end of the period for supplies expense of $2,200 and accrued salaries of $1,300. Net

income, as corrected, is

Selected Answer:

$54,

 Question 25

4 out of 4 points

The unexpired insurance at the end of the fiscal period represents

Selected Answer:

a deferred expense

Module 4: Completing the Accounting Cycle

 Question 1

0 out of 4 points

After all of the account balances have been extended to the Balance Sheet columns of the end-of-

period spreadsheet, the totals of the Debit and Credit columns are $36,755 and $32,735, respectively.

What is the amount of net income or net loss for the period?

Selected Answer:

$32,735 net income

 Question 2

 Question 11

4 out of 4 points

Diane's Designs purchased a one-year liability insurance policy on March 1 of a year for $8,400 and

recorded it as a prepaid expense. Which of the following amounts would be recorded as insurance

expense during the adjusting process at the end of Diane’s first month of operations on March 31?

Selected Answer:

$

 Question 12

4 out of 4 points

Accounts reported on the balance sheet that are carried forward from year to year are known as

permanent accounts.

Selected Answer:

Tru e

 Question 13

4 out of 4 points

Cash and other assets that may reasonably be expected to be realized in cash, sold, or consumed

through the normal operations of a business, usually longer than one year, are called current assets.

Selected Answer:

Fals e

 Question 14

0 out of 4 points

Working capital is the ratio of the current assets of a business to its current liabilities.

Selected Answer:

Tru e

 Question 15

4 out of 4 points

After analyzing transactions, the next step would be to post the transactions in the ledger.

Selected Answer:

Fals e

 Question 16

4 out of 4 points

Which of the accounts below would not appear in the balance sheet columns of the end-of-period

spreadsheet?

Selected Answer:

Service Revenue

 Question 17

4 out of 4 points

Accumulated Depreciation is a permanent account.

Selected Answer:

Tru e

 Question 18

4 out of 4 points

Closing entries are entered directly on the end-of-period spreadsheet.

Selected Answer:

Fals e

 Question 19

4 out of 4 points

During the end-of-period processing, which of the following best describes the logical order of steps?

Selected Answer:

preparation of adjustments, adjusted trial balance, financial

statements

 Question 20

4 out of 4 points

Which of the following account groups are nominal accounts?

Selected Answer:

Rent Revenue, Fees Earned, Miscellaneous Expense

 Question 21

4 out of 4 points

Which of the following has steps of the accounting cycle in proper sequence (some steps may be

missing)?

Selected Answer:

analyze and record transactions, post transactions to the ledger, prepare a trial balance,

analyze adjustment data, prepare adjusting entries, prepare financial statements,

journalize closing entries and post to the ledger, and prepare a post-closing trial balance

 Question 22

4 out of 4 points

All companies must use a calendar year as their fiscal year.

Selected Answer:

Fals e

 Question 23

4 out of 4 points

Accumulated Depreciation appears on the

Selected Answer:

balance sheet in the property, plant, and equipment section

 Question 24

4 out of 4 points

When accounts do not appear on the unadjusted trial balance but are needed to post adjustments,

they are simply added to the account title column.

Selected Answer:

Tru e

 Question 25

4 out of 4 points

Assets, liabilities, and stockholders' equity accounts are real accounts and do not get closed at the

end of the period.

Selected Answer:

Tru e

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