Embry BUSW500 Module 4.6 Accounting Quiz 2016 25/25 a++

Embry BUSW500 Module 4.6 Accounting Quiz 2016

Q1. - When a company borrows cash from a bank, which of the following will occur?

A.    An increase to cash

B.    A decrease to accounts receivable

C.    A decrease to notes payable

D.    An increase to owners' capital

Q2. - Which of the following assets is assumed to have an unlimited useful life?

A.    Furniture

B.    Land

C.    Machinery

D.    Building

Q3. - The primary responsibility for setting the rules of accounting rests with the:

A.    Financial Accounting Standards Board (FASB).

B.    American Institute of CPAs (AICPA)

C.    Generally Accepted Accounting Principles (GAAP)

D.    Security and Exchange Commission (SEC)

Q4. - Which financial statement includes only those activities that result in cash changing hands during the period?

A.    Statement of cash flows

B.    Income statement

C.    Balance sheet

D.    Statement of owner's equity

Q5. - The income statement reports:

A.    Only sales amounts paid in cash

B.    The financial position on a particular date

C.    Net income or loss for the period

D.    Revenues, assets and expenses

Q6. - Expenses are:

A.    Incurred only when cash is paid

B.    Costs incurred to generate revenues

C.    Increases to owner's equity

D.    Recorded as credits in journal entries.

Q7. - Which of the four basic financial statements provides a snapshot of the business on a particular day?

A.    Balance sheet

B.    Statement of owner's equity

C.    Income statement

D.    Statement of cash Flows

Q8. - For external financial reporting GAAP requires use of:

A.    Either cash basis or accrual basis accounting

B.    Accrual basis accounting

C.    Cash basis accounting

D.    Credit basis accounting

Q9. - The statements of financial accounting standards and other authoritative pronouncements that define what constitutes acceptable accounting practice for financial reporting are collectively referred to as:

A.    SEC

B.    GAAP

C.    FASB

D.    SFAS

Q10. - Which depreciation method produces an equal amount of depreciation each period?

A.    Declining-balance

B.    Straight-line

C.    Units-of-production

D.    Weighted Average

Q11. - Financial information that is __________ ensures that it is unbiased and verifiable.

A.    relevant

B.    comparable

C.    consistent

D.    reliable

Q12. - Amortization:

A.    Is another term for depreciation of fixed assets

B.    Can be used to expense the cost of intangible assets with unlimited lives.

C.    Is an accelerated depreciation method

D.    Is a method used to allocate the cost of an intangible asset over its limited useful life

Q13. - Terms for the left and right side of an account are known as:

A.    Positive/Negative

B.    Up/Down

C.    Debit/Credit

D.    Increase/Decrease

Q14. - Activities involving the purchase and sale of long-term assets as well as other major items used in a business's operation are referred to as:

A.    Financing activities

B.    Planning activities

C.    Operating activities

D.    Investing activities

Q15. - A debit is:

A.    A decrease in an account.

B.    The left side of a T-account

C.    An increase in an account

D.    The right side of a T-account

Q16. - Which inventory costing method assigns the earliest units received to cost of goods sold?

A.    Weighted average

B.    Specific identification

C.    LIFO

D.    FIFO

Q17. - Which of the following statements is true?

A.    Double-entry accounting systems have existed for at least 2,000 years

B.    Before the advent of a money economy, the double-entry accounting system was not feasible

C.    The double-entry accounting system came about as a result of the Great Depression

D.    Accounting systems developed in the 18thcentury because, by then, most people were literate

Q18. - The organization responsible for setting U.S. external financial reporting practice is the:

A.    Financial Accounting Standards Board

B.    American Institute of Certified Public Accountants

C.    Federal Government

D.    Securities and Exchange Commission

Q19. - When sales are made on account, which of the following will occur?

A.    Accounts receivable will increase

B.    Cash will increase

C.    Accounts payable will decrease

D.    Revenues will decrease

Q20. - Which of the following is not one of the four basic financial statements?

A.    Balance sheet

B.    Accounting equation

C.    Statement of cash flows

D.    Income statement

Q21. - When expenses are incurred, what is the effect on the accounting equation?

A.    Assets will increase

B.    Owner's equity will increase

C.    Liabilities will decrease

D.    Owner's equity will decrease

Q22. - When faced with uncertainty about the amount at which assets and liabilities should be recorded, accountants should follow which principle, in order to avoid misleading users of financial statements?

A.    Consistency

B.    Conservatism

C.    Comparability

D.    Continuity

Q23. - Resources a business owns are called:

A.    Liabilities

B.    Assets

C.    Revenues

D.    Owner's equity

Q24. - An account with the word "prepaid" in the title is a(n):

A.    Expense

B.    Liability

C.    Liability

D.    Asset

Q25. -  Which of the following is an example of a liability account?

A.    Prepaid Rent

B.    Unearned Revenue

C.    Equipment

D.    Inventory