Question 1

What is the minimum number of ways that a transaction could effect the basic accounting equation?

Accepted Answer

A)  One.
B)  Two.
C)  Three.
D)  No minimum.E) B) and C)
F) A) and D)

Question 2

A company purchases $23,000 of supplies in the current month and promises to pay for them next month.How would the company record a liability for the supplies?

Accepted Answer

A)  This liability is not a recognized liability until the payment is due.
B)  $23,000 would be posted as a credit to Accounts Payable.
C)  $23,000 would be posted as a debit to Accounts Payable.
D)  $23,000 would be posted as a debit to Note Payable.E) B) and D)
F) B) and C)

Question 3

A company goes ahead and purchases inventory.The impact on the current ratio is:

Accepted Answer

A)  zero,if inventory was purchased using cash.
B)  positive,if CA 
C)  negative,if CA > CL to start with and inventory is purchased on credit.
D)  All of the choices are correct.E) A) and C)
F) None of the above

Question 4

The basic accounting equation must always balance for each transaction.

Accepted Answer

A) True 
 B)False

Question 5

Which concept should be applied when reporting a piece of land that was bought for $50,000 five years ago,and which would probably now sell for $80,000?

Accepted Answer

A)  The cost principle.
B)  The asset principle.
C)  The separate entity concept.
D)  The duality of effects.E) C) and D)
F) B) and D)

Question 6

In 2012,the Denim Company bought land that cost $15,000.In 2018,a similar piece of land was bought for $28,000 and the company's existing land was estimated to be worth $18,000.On the balance sheet at the end of 2018,the land that was purchased in 2012 would be reported at:

Accepted Answer

A)  $15,000.
B)  $28,000.
C)  $18,000.
D)  the average of the three prices.E) C) and D)
F) B) and C)

Question 7

Your company buys a $2 million warehouse paying $300,000 in cash and issuing $1.7 million in promissory notes.This will be posted as:

Accepted Answer

A)  $2 million credited and $300,000 debited to assets; $1.7 million debited to liabilities.
B)  $2 million debited to assets and $2 million credited to liabilities.
C)  $2 million debited and $300,000 credited to assets; $1.7 million credited to liabilities.
D)  $2 million credited to assets and $2 million debited to liabilities.E) B) and C)
F) A) and D)

Question 8

You are pleasantly surprised to discover that a popular actress appears on The Tonight Show wearing your company's jeans.As a result of that your company's sales increase by $500,000.When the actress appeared on TV,you would have recorded an asset because the TV appearance was expected to bring future economic benefits to your company.

Accepted Answer

A) True 
 B)False

Question 9

A company issues $20 million in new stock.It later uses this money to pay off promissory notes.How many different accounts and which account names are affected by these two transactions?

Accepted Answer

A)  3 accounts are affected: contributed capital,cash,and notes payable.
B)  4 accounts are affected: contributed capital,cash,liabilities,and accounts payable.
C)  3 accounts are affected: cash,assets,and accounts payable.
D)  3 accounts are affected: contributed capital,investments,and accounts payable.E) B) and D)
F) A) and B)

Question 10

The three basic steps of the systematic accounting process used to capture and report the financial effects of a company's activities are:

Accepted Answer

A)  Picture,Name,Analyze.
B)  Analyze,Record,Summarize.
C)  Analyze,Journalize,Report.
D)  Analyze,Capture,Report.E) C) and D)
F) None of the above

Question 11

The characteristic shared by all liabilities is that they:

Accepted Answer

A)  provide a future economic benefit.
B)  result in an inflow of resources to the company.
C)  always end in the word "payable."
D)  obligate the company to do something in the future.E) None of the above
F) A) and C)

Question 12

Across all accounts,the total value of all debits must equal the total value of all credits.

Accepted Answer

A) True 
 B)False

Question 13

Which of the following would be listed as a current liability?

Accepted Answer

A)  Cash in the bank.
B)  Notes payable due in two years.
C)  Bank loan due in 10 years.
D)  Accounts payable.E) B) and C)
F) A) and B)

Question 14

In computing the statement of financial position,some data was misplaced and they are attempting to reconstruct the missing data from that which is available.You know that total assets for the current year are $33,000.Non-current liabilities are $8,000 and Shareholders equity is $23,000.The current ratio is 2.50.Find the values for current assets,fixed assets and current liabilities.

Accepted Answer

$5000,$28000,$2000,respectively.33000 = ...

Question 15

Match between columns
                        Premises: Increase in Accounts Payable.
Increase in Cash.
Decrease in Accrued Liabilities.
Increase in Inventory.
Decrease in Wages Payable.
Decrease in Property and Equipment.
Decrease in Notes Payable.
Increase in Contributed Capital.

Accepted Answer

The Answer of credit (cr) and debit (dr) is...

Question 16

Which of the following is the financing that a business acquires through owners' contributions and reinvestment of profits?

Accepted Answer

A)  Debt.
B)  Equity.
C)  External Exchanges.
D)  Current Assets.E) None of the above
F) A) and B)

Question 17

The standard formatting for a journal entry:

Accepted Answer

A)  lists credits first and then debits,both aligned to the left.
B)  lists credits first and then debits,indented underneath.
C)  lists debits first and then credits,both aligned to the right.
D)  lists debits first and then credits,indented underneath.E) None of the above
F) A) and C)

Question 18

All of a company's business activities have a direct economic effect on the company.

Accepted Answer

A) True 
 B)False

Question 19

An exchange containing a promise is never considered an accounting transaction.

Accepted Answer

A) True 
 B)False

Question 20

On March 3,2018,your company pays $4,000 to acquire supplies.Should this be a recognized accounting transaction? If so,what accounts are affected and by how much each?

Accepted Answer

It should be a recognized tran...

Exam 2: The Balance Sheet

On March 3,2018,your company pays $4,000 to acquire supplies.Should this be a recognized accounting transaction? If so,what accounts are affected and by how much each?

Correct Answer
verified
It should be a recognized tran...
View Answer

In 2012,the Denim Company bought land that cost $15,000.In 2018,a similar piece of land was bought for $28,000 and the company's existing land was estimated to be worth $18,000.On the balance sheet at the end of 2018,the land that was purchased in 2012 would be reported at:

Correct Answer
verified

The three basic steps of the systematic accounting process used to capture and report the financial effects of a company's activities are:

Correct Answer
verified

A company purchases $23,000 of supplies in the current month and promises to pay for them next month.How would the company record a liability for the supplies?

Correct Answer
verified

What is the minimum number of ways that a transaction could effect the basic accounting equation?

Correct Answer
verified

The characteristic shared by all liabilities is that they:

Correct Answer
verified

Which of the following would be listed as a current liability?

Correct Answer
verified

A company issues $20 million in new stock.It later uses this money to pay off promissory notes.How many different accounts and which account names are affected by these two transactions?

Correct Answer
verified

The basic accounting equation must always balance for each transaction.

Correct Answer
verified

Match the transaction with the appropriate T-account entry

Which of the following is the financing that a business acquires through owners' contributions and reinvestment of profits?

Correct Answer
verified

Across all accounts,the total value of all debits must equal the total value of all credits.

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified
$5000,$28000,$2000,respectively.33000 = ...
View Answer

An exchange containing a promise is never considered an accounting transaction.

Correct Answer
verified

A company goes ahead and purchases inventory.The impact on the current ratio is:

Correct Answer
verified

The standard formatting for a journal entry:

Correct Answer
verified

Your company buys a $2 million warehouse paying $300,000 in cash and issuing $1.7 million in promissory notes.This will be posted as:

Correct Answer
verified

Which concept should be applied when reporting a piece of land that was bought for $50,000 five years ago,and which would probably now sell for $80,000?

Correct Answer
verified

All of a company's business activities have a direct economic effect on the company.

Correct Answer
verified

Exam 2: The Balance Sheet

On March 3,2018,your company pays $4,000 to acquire supplies.Should this be a recognized accounting transaction? If so,what accounts are affected and by how much each?

Correct AnswerverifiedIt should be a recognized tran...View AnswerShow Answer

In 2012,the Denim Company bought land that cost $15,000.In 2018,a similar piece of land was bought for $28,000 and the company's existing land was estimated to be worth $18,000.On the balance sheet at the end of 2018,the land that was purchased in 2012 would be reported at:

Correct AnswerverifiedShow Answer

The three basic steps of the systematic accounting process used to capture and report the financial effects of a company's activities are:

Correct AnswerverifiedShow Answer

A company purchases $23,000 of supplies in the current month and promises to pay for them next month.How would the company record a liability for the supplies?

Correct AnswerverifiedShow Answer

What is the minimum number of ways that a transaction could effect the basic accounting equation?

Correct AnswerverifiedShow Answer

The characteristic shared by all liabilities is that they:

Correct AnswerverifiedShow Answer

Which of the following would be listed as a current liability?

Correct AnswerverifiedShow Answer

A company issues $20 million in new stock.It later uses this money to pay off promissory notes.How many different accounts and which account names are affected by these two transactions?

Correct AnswerverifiedShow Answer

The basic accounting equation must always balance for each transaction.

Correct AnswerverifiedShow Answer

Match the transaction with the appropriate T-account entry

Which of the following is the financing that a business acquires through owners' contributions and reinvestment of profits?

Correct AnswerverifiedShow Answer

Across all accounts,the total value of all debits must equal the total value of all credits.

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Correct Answerverified$5000,$28000,$2000,respectively.33000 = ...View AnswerShow Answer

An exchange containing a promise is never considered an accounting transaction.

Correct AnswerverifiedShow Answer

A company goes ahead and purchases inventory.The impact on the current ratio is:

Correct AnswerverifiedShow Answer

The standard formatting for a journal entry:

Correct AnswerverifiedShow Answer

Your company buys a $2 million warehouse paying $300,000 in cash and issuing $1.7 million in promissory notes.This will be posted as:

Correct AnswerverifiedShow Answer

Which concept should be applied when reporting a piece of land that was bought for $50,000 five years ago,and which would probably now sell for $80,000?

Correct AnswerverifiedShow Answer

All of a company's business activities have a direct economic effect on the company.

Correct AnswerverifiedShow Answer

Correct Answer
verified
It should be a recognized tran...
View Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
verified

Correct Answer
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Correct Answer
verified

Correct Answer
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Correct Answer
verified

Correct Answer
verified

Correct Answer
verified
$5000,$28000,$2000,respectively.33000 = ...
View Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
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