GB 518 Quiz 1\t\u00a0\tGB518 Financial Accounting Principles and Analysis\t\u00a0\tQuestion : \ufffd\u00a0\u00a0 If equity is $300,000 and liabilities are $192,000, then assets equal:\t\u00a0\t \ufffd \ufffd\u00a0\tQuestion 2. \ufffd Question : \ufffd\u00a0\u00a0 If assets are $99,000 and liabilities are $32,000, then equity equals:\t\u00a0\tQuestion 3. \ufffd Question : \ufffd\u00a0\u00a0 Reebok had income of $150 million and average assets of $1,800 million. Its return on assets is:\t\u00a0\t\u00a0Question 4.\u00a0\u00a0\u00a0\u00a0 Question : \ufffd\u00a0\u00a0 Unearned revenues are:\t\u00a0\t \ufffd \ufffd\u00a0 \u00a0\u00a0\u00a0\u00a0 \ufffd\u00a0 \u00a0Revenues that have been earned and received in cash\t\u00a0\t \ufffd \ufffd \ufffd \ufffd \ufffd \ufffd \ufffd \u00a0Revenues that have been earned but not yet collected in cash\t\u00a0\t \ufffd \ufffd \ufffd \ufffd\u00a0\u00a0\u00a0 \ufffd \ufffd\u00a0 \u00a0Liabilities created when a customer pays in advance for products or services before the revenue is earned\t \ufffd \ufffd \ufffd \ufffd \ufffd \ufffd \ufffd \u00a0Recorded as an asset in the accounting records\t\u00a0\t \ufffd \ufffd \ufffd \ufffd \ufffd \ufffd \ufffd \u00a0Increases to retained earnings\t\u00a0\t\u00a0\tQuestion 5. \ufffd Question : \ufffd\u00a0\u00a0 Technological advancement\t\u00a0\t \ufffd \ufffd\u00a0 \u00a0\u00a0\u00a0 \ufffd\u00a0\u00a0 \u00a0Has replaced accounting\t\u00a0\t \ufffd \ufffd \ufffd \ufffd \ufffd \ufffd \ufffd \u00a0Has not changed the work that accountants do\t\u00a0\t \ufffd \ufffd \ufffd \ufffd\u00a0\u00a0\u00a0 \ufffd \ufffd\u00a0 \u00a0Has freed accounting professionals to concentrate more on the analysis and interpretation of information\t \ufffd \ufffd \ufffd \ufffd \ufffd \ufffd \ufffd \u00a0In accounting has replaced the need for decision makers\t\u00a0\t \ufffd \ufffd \ufffd \ufffd \ufffd \ufffd \ufffd \u00a0In accounting is only available to large corporations\t\u00a0\t\u00a0\tQuestion 6. \ufffd Question : \ufffd\u00a0\u00a0 Of the following accounts, the one that normally has a credit balance is:\t\u00a0\t \ufffd \ufffd \ufffd \ufffd \ufffd \ufffd \ufffd \u00a0Cash\t\u00a0\t \ufffd \ufffd \ufffd \ufffd \ufffd \ufffd \ufffd \u00a0Office Equipment\t\u00a0\t \ufffd \ufffd \ufffd \ufffd\u00a0\u00a0\u00a0 \ufffd \ufffd\u00a0 \u00a0Sales Salaries Payable\t\u00a0\t \ufffd \ufffd \ufffd \ufffd \ufffd \ufffd \ufffd \u00a0Dividends\t\u00a0\t \ufffd \ufffd \ufffd \ufffd \ufffd \ufffd \ufffd \u00a0Sales Salaries Expense\t\u00a0\t\u00a0\tQuestion 7. \ufffd Question : \ufffd\u00a0\u00a0 Net Income:\t\u00a0\t \ufffd\u00a0\u00a0 \u00a0\u00a0\u00a0 \u00a0Decreases equity\t\u00a0\t \ufffd \ufffd \ufffd \ufffd \ufffd \ufffd \ufffd \u00a0Represents the amount of assets owners put into a business\t\u00a0\t \ufffd \ufffd \ufffd \ufffd \ufffd \ufffd \ufffd \u00a0Equals assets minus liabilities\t\u00a0\t \ufffd \ufffd \ufffd \ufffd\u00a0\u00a0\u00a0 \ufffd \ufffd\u00a0 \u00a0Is the excess of revenues over expenses\t\u00a0\t \ufffd \ufffd \ufffd \ufffd\u00a0\u00a0\u00a0 \ufffd \ufffd\u00a0 \u00a0Represents the owners’ claims against assets\t\u00a0\t\u00a0\tQuestion 8. \ufffd Question : \ufffd\u00a0\u00a0 Internal users of accounting information include:\t\u00a0\t\u00a0\u00a0\u00a0 \ufffd \ufffd \ufffd\u00a0\u00a0\u00a0\u00a0 \u00a0Shareholders\t\u00a0\t \ufffd \ufffd \ufffd \ufffd \ufffd \ufffd \ufffd \u00a0Customers\t\u00a0\t \ufffd \ufffd \ufffd \ufffd \ufffd \ufffd \ufffd \u00a0Creditors\t\u00a0\t \ufffd \ufffd \ufffd \ufffd \ufffd \ufffd \ufffd \u00a0Government regulators\t\u00a0\t \ufffd \ufffd \ufffd \ufffd\u00a0\u00a0\u00a0 \ufffd \ufffd\u00a0 \u00a0Line Supervisor\t\u00a0\t\u00a0\t\u00a0\tQuestion 9. \ufffd Question : \ufffd\u00a0\u00a0 A company has twice as much owner’s equity as it does liabilities. If total liabilities are $50,000, what amounts of assets are owned by the company?\t\u00a0\t \ufffd \ufffd \ufffd \ufffd \ufffd \ufffd \ufffd \u00a0$50,000\t\u00a0\t \ufffd \ufffd \ufffd \ufffd \ufffd \ufffd \ufffd \u00a0$100,000\t\u00a0\t \ufffd \ufffd \ufffd \ufffd\u00a0\u00a0\u00a0 \ufffd \ufffd\u00a0 \u00a0$150,000\t\u00a0\t \ufffd \ufffd \ufffd \ufffd \ufffd \ufffd \ufffd \u00a0$200,000\t\u00a0\t\u00a0\tQuestion 10.\u00a0\u00a0\u00a0 Question : \ufffd\u00a0\u00a0 A credit is used to record:\t\u00a0\t \ufffd \ufffd\u00a0 \u00a0\u00a0\u00a0\u00a0 \ufffd\u00a0 \u00a0An increase in an expense account\t\u00a0\t \ufffd \ufffd \ufffd \ufffd \ufffd \ufffd \ufffd \u00a0An increase in an asset account\t\u00a0\t \ufffd \ufffd \ufffd \ufffd\u00a0\u00a0\u00a0 \ufffd \ufffd\u00a0 \u00a0An increase in an unearned revenue account\t\u00a0\t \ufffd \ufffd \ufffd \ufffd \ufffd \ufffd \ufffd \u00a0A decrease in a revenue account\t\u00a0\t \ufffd \ufffd \ufffd \ufffd \ufffd \ufffd \ufffd \u00a0A decrease to retained earnings\t\u00a0\t\u00a0\t\u00a0\tQuestion 11.\u00a0\u00a0\u00a0 Question : \ufffd\u00a0\u00a0 Apatha Company has assets of $600,000, liabilities of $250,000 and equity of $350,000. It buys office equipment on credit for $75,000. The effects of this transaction include:\t\u00a0\t \ufffd \ufffd \ufffd \ufffd \ufffd \ufffd \ufffd \u00a0Assets increase by $75,000 and expenses increase by $75,000\t\u00a0\t \ufffd \ufffd \ufffd \ufffd \ufffd \ufffd \ufffd \u00a0Assets increase by $75,000 and expenses decrease by $75,000\t\u00a0\t \ufffd \ufffd \ufffd \ufffd \ufffd \ufffd \ufffd \u00a0Liabilities increase by $75,000 and expenses decrease by $75,000\t \ufffd \ufffd \ufffd \ufffd \ufffd \ufffd \ufffd \u00a0Assets decrease by $75,000 and expenses decrease by $75,000\t\u00a0\t \ufffd \ufffd \ufffd \ufffd\u00a0\u00a0\u00a0 \ufffd \ufffd\u00a0 \u00a0Assets increase by $75,000 and liabilities increase by $75,000\t\u00a0\t\u00a0\tQuestion 12.\u00a0\u00a0\u00a0 Question : \ufffd\u00a0\u00a0 The principle that (1) requires revenue to be recognized at the time it is earned, (2) allows the inflow of assets associated with revenue to be in a form other than cash and (3) measures the amount of revenue as the cash plus the cash equivalent value of any non-cash assets received from customers in exchange for goods or services is called the:\t\u00a0\t \ufffd \ufffd \ufffd \ufffd \ufffd \ufffd \ufffd \u00a0Going-concern principle\t\u00a0\t \ufffd \ufffd \ufffd \ufffd \ufffd \ufffd \ufffd \u00a0Cost principle\t\u00a0\t \ufffd \ufffd \ufffd \ufffd\u00a0\u00a0\u00a0 \ufffd \ufffd\u00a0 \u00a0Revenue recognition principle\t\u00a0\t \ufffd \ufffd \ufffd \ufffd \ufffd \ufffd \ufffd \u00a0Objectivity principle\t\u00a0\t \ufffd \ufffd \ufffd \ufffd \ufffd \ufffd \ufffd \u00a0Business entity principle\t\u00a0\t\u00a0\tQuestion 13.\u00a0\u00a0\u00a0 Question : \ufffd\u00a0\u00a0 Which of the following is the primary purpose of accounting?\t\u00a0\t \ufffd\u00a0\u00a0 \u00a0\u00a0\u00a0 \u00a0To establish a business\t\u00a0\t \ufffd \ufffd \ufffd \ufffd\u00a0\u00a0\u00a0 \ufffd \ufffd\u00a0 \u00a0To identify, record and communicate business transactions\t\u00a0\t \ufffd \ufffd \ufffd \ufffd \ufffd \ufffd \ufffd \u00a0To deceive stockholders\t\u00a0\t \ufffd \ufffd \ufffd \ufffd \ufffd \ufffd \ufffd \u00a0To keep from paying taxes\t\u00a0\t \ufffd \ufffd \ufffd \ufffd \ufffd \ufffd \ufffd \u00a0To establish credit for a company\t\u00a0\t\u00a0\t\u00a0\tQuestion 14.\u00a0\u00a0\u00a0 Question : \ufffd\u00a0\u00a0 Assets created by selling goods and services on credit are:\t\u00a0\t \ufffd\u00a0\u00a0 \u00a0\u00a0\u00a0 \u00a0Accounts payable\t\u00a0\t \ufffd \ufffd \ufffd \ufffd\u00a0\u00a0\u00a0 \ufffd \ufffd\u00a0 \u00a0Accounts receivable\t\u00a0\t \ufffd \ufffd \ufffd \ufffd \ufffd \ufffd \ufffd \u00a0Liabilities\t\u00a0\t \ufffd \ufffd \ufffd \ufffd \ufffd \ufffd \ufffd \u00a0Expenses\t\u00a0\t\u00a0\tQuestion 15.\u00a0\u00a0\u00a0 Question : \ufffd\u00a0\u00a0 Double-entry accounting is an accounting system:\t\u00a0\t \ufffd \ufffd\u00a0 \u00a0\u00a0\u00a0 \ufffd\u00a0\u00a0 \u00a0That records each transaction twice\t\u00a0\t \ufffd \ufffd \ufffd \ufffd\u00a0\u00a0\u00a0 \ufffd \ufffd\u00a0 \u00a0That records the effects of transactions and other events in at least two accounts with equal debits and credits\t \ufffd \ufffd \ufffd \ufffd \ufffd \ufffd \ufffd \u00a0In which the impact of each transaction is recorded in two or more accounts but that could include two debits and no credits\t \ufffd \ufffd \ufffd \ufffd \ufffd \ufffd \ufffd \u00a0That may only be used if T-accounts are used\t\u00a0\t \ufffd \ufffd \ufffd \ufffd \ufffd \ufffd \ufffd \u00a0That insures that errors never occur\t\u00a0\t\u00a0\t\u00a0\tQuestion 16.\u00a0\u00a0\u00a0 Question : \ufffd\u00a0\u00a0 An example of a financing activity is:\t\u00a0\t \ufffd \ufffd\u00a0 \u00a0\u00a0\u00a0\u00a0 \ufffd\u00a0 \u00a0Buying office supplies\t\u00a0\t \ufffd \ufffd \ufffd \ufffd\u00a0\u00a0\u00a0 \ufffd \ufffd\u00a0 \u00a0Obtaining a long-term loan\t\u00a0\t \ufffd \ufffd \ufffd \ufffd \ufffd \ufffd \ufffd \u00a0Buying office equipment\t\u00a0\t \ufffd \ufffd \ufffd \ufffd \ufffd \ufffd \ufffd \u00a0Selling inventory\t\u00a0\t \ufffd \ufffd \ufffd \ufffd \ufffd \ufffd \ufffd \u00a0Buying land\t\u00a0\t\u00a0\tQuestion 17.\u00a0\u00a0\u00a0 Question : \ufffd\u00a0\u00a0 A debit is:\t\u00a0\t \ufffd\u00a0\u00a0 \u00a0\u00a0\u00a0 \u00a0An increase in an account\t\u00a0\t \ufffd \ufffd \ufffd \ufffd \ufffd \ufffd \ufffd \u00a0The right-hand side of a T-account\t\u00a0\t \ufffd \ufffd \ufffd \ufffd \ufffd \ufffd \ufffd \u00a0A decrease in an account\t\u00a0\t \ufffd \ufffd \ufffd \ufffd\u00a0\u00a0\u00a0 \ufffd \ufffd\u00a0 \u00a0The left-hand side of a T-account\t\u00a0\t \ufffd \ufffd \ufffd \ufffd \ufffd \ufffd \ufffd \u00a0An increase to a liability account\t\u00a0\t\u00a0\tQuestion 18.\u00a0\u00a0\u00a0 Question : \ufffd\u00a0\u00a0 Risk is:\t\u00a0\t \ufffd \ufffd\u00a0 \u00a0\u00a0\u00a0 \ufffd\u00a0\u00a0 \u00a0Net income divided by average total assets\t\u00a0\t \ufffd \ufffd \ufffd \ufffd \ufffd \ufffd \ufffd \u00a0The reward for investment\t\u00a0\t \ufffd \ufffd \ufffd \ufffd\u00a0\u00a0\u00a0 \ufffd \ufffd\u00a0 \u00a0The uncertainty about the expected return that will be earned from an investment\t \ufffd \ufffd \ufffd \ufffd \ufffd \ufffd \ufffd \u00a0Unrelated to expected return\t\u00a0\t\u00a0\t\u00a0\tQuestion 19.\u00a0\u00a0\u00a0 Question : \ufffd\u00a0\u00a0 Which of the following statements best describes the relationship of U.S. GAAP and IFRS?\t\u00a0\t \ufffd \ufffd\u00a0 \u00a0\u00a0\u00a0\u00a0 \ufffd\u00a0 \u00a0They are identical\t\u00a0\t \ufffd \ufffd \ufffd \ufffd \ufffd \ufffd \ufffd \u00a0They are entirely different conceptual frameworks\t\u00a0\t \ufffd \ufffd \ufffd \ufffd\u00a0\u00a0\u00a0 \ufffd \ufffd\u00a0 \u00a0They are similar but not identical\t\u00a0\t \ufffd \ufffd \ufffd \ufffd \ufffd \ufffd \ufffd \u00a0Neither has anything to do with accounting\t\u00a0\t \ufffd \ufffd \ufffd \ufffd \ufffd \ufffd \ufffd \u00a0They both relate only to publicly traded companies\t\u00a0\t\u00a0\t\u00a0\tQuestion 20.\u00a0\u00a0\u00a0 Question : \ufffd\u00a0\u00a0 Source documents include all of the following except:\t\u00a0\t \ufffd \ufffd \ufffd \ufffd \ufffd \ufffd \ufffd \u00a0Sales tickets\t\u00a0\t \ufffd \ufffd \ufffd \ufffd\u00a0\u00a0\u00a0 \ufffd \ufffd\u00a0 \u00a0Ledgers\t\u00a0\t \ufffd \ufffd \ufffd \ufffd \ufffd \ufffd \ufffd \u00a0Checks\t\u00a0\t \ufffd \ufffd \ufffd \ufffd \ufffd \ufffd \ufffd \u00a0Purchase orders\t\u00a0\t \ufffd \ufffd \ufffd \ufffd \ufffd \ufffd \ufffd \u00a0Bank statements\t\u00a0\t\u00a0\tQuestion 21.\u00a0\u00a0\u00a0 Question : \ufffd\u00a0\u00a0 Stride Rite has total assets of $425 million. Its total liabilities are $110 million. Its equity is $315 million. Calculate the debt ratio.\t \ufffd\u00a0\u00a0 \u00a0\u00a0\u00a0 \u00a038.6%\t\u00a0\t \ufffd \ufffd \ufffd \ufffd \ufffd \ufffd \ufffd \u00a013.4%\t\u00a0\t \ufffd \ufffd \ufffd \ufffd \ufffd \ufffd \ufffd \u00a034.9%\t\u00a0\t \ufffd \ufffd \ufffd \ufffd\u00a0\u00a0\u00a0 \ufffd \ufffd\u00a0 \u00a025.9%\t\u00a0\t \ufffd \ufffd \ufffd \ufffd \ufffd \ufffd \ufffd \u00a014.9%\t\u00a0\t\u00a0\tQuestion 22.\u00a0\u00a0\u00a0 Question : \ufffd\u00a0\u00a0 An asset created by prepayment of an expense is:\t\u00a0\t \ufffd \ufffd \ufffd \ufffd \ufffd \ufffd \ufffd \u00a0Recorded as a debit to an unearned revenue account\t\u00a0\t \ufffd \ufffd \ufffd \ufffd\u00a0\u00a0\u00a0 \ufffd \ufffd\u00a0 \u00a0Recorded as a debit to a prepaid expense account\t\u00a0\t \ufffd \ufffd \ufffd \ufffd \ufffd \ufffd \ufffd \u00a0Recorded as a credit to an unearned revenue account\t\u00a0\t \ufffd \ufffd \ufffd \ufffd \ufffd \ufffd \ufffd \u00a0Recorded as a credit to a prepaid expense account\t\u00a0\t \ufffd \ufffd \ufffd \ufffd \ufffd \ufffd \ufffd \u00a0Not recorded in the accounting records until the earnings process is complete\t\u00a0\t\u00a0\tQuestion 23.\u00a0\u00a0\u00a0 Question : \ufffd\u00a0\u00a0 Increases in retained earnings from a company’s earnings activities are:\t \ufffd \ufffd\u00a0\u00a0 Assets\t\u00a0\t \ufffd \ufffd \ufffd \ufffd\u00a0\u00a0\u00a0 \ufffd \ufffd\u00a0 \u00a0Revenues\t\u00a0\t \ufffd \ufffd \ufffd \ufffd \ufffd \ufffd \ufffd \u00a0Liabilities\t\u00a0\t \ufffd \ufffd \ufffd \ufffd \ufffd \ufffd \ufffd \u00a0Stockholder’s Equity\t\u00a0\t \ufffd \ufffd \ufffd \ufffd \ufffd \ufffd \ufffd \u00a0Expenses\t\u00a0\tQuestion 24.\u00a0\u00a0\u00a0 Question : \ufffd\u00a0\u00a0 Which of the following accounting principles dictates when expenses are recognized?\t \ufffd\u00a0\u00a0 \u00a0\u00a0\u00a0 \u00a0Revenue recognition principle\t\u00a0\t \ufffd \ufffd \ufffd \ufffd \ufffd \ufffd \ufffd \u00a0Monetary unit principle\t\u00a0\t \ufffd \ufffd \ufffd \ufffd \ufffd \ufffd \ufffd \u00a0Business entity principle\t\u00a0\t \ufffd \ufffd \ufffd \ufffd\u00a0\u00a0\u00a0 \ufffd \ufffd\u00a0 \u00a0Matching principle\t\u00a0\t \ufffd \ufffd \ufffd \ufffd \ufffd \ufffd \ufffd \u00a0Full disclosure principle\t\u00a0\t\u00a0\t\u00a0\tQuestion 25.\u00a0\u00a0\u00a0 Question : \ufffd\u00a0\u00a0 Prepaid expenses are:\t\u00a0\t \ufffd\u00a0\u00a0\u00a0\u00a0 Payments made for products and services that do not ever expire\t \ufffd \ufffd \ufffd \ufffd \ufffd \ufffd \ufffd \u00a0Classified as liabilities on the balance sheet\t\u00a0\t \ufffd \ufffd \ufffd \ufffd \ufffd \ufffd \ufffd \u00a0Decreases in retained earnings\t\u00a0\t \ufffd \ufffd \ufffd \ufffd\u00a0\u00a0\u00a0 \ufffd \ufffd\u00a0 \u00a0Assets that represent prepayments of future expenses\t\u00a0\t \ufffd \ufffd \ufffd \ufffd \ufffd \ufffd \ufffd \u00a0Promises of payments by customers<\/p>\n","protected":false},"excerpt":{"rendered":"
GB 518 Quiz 1 \u00a0 GB518 Financial Accounting Principles and Analysis \u00a0 Question : \ufffd\u00a0\u00a0 If equity is $300,000 and liabilities are $192,000, then assets equal: \u00a0 \ufffd \ufffd\u00a0 Question 2. \ufffd Question : \ufffd\u00a0\u00a0 If assets are $99,000 and Read More …<\/a><\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[],"tags":[],"class_list":["post-217240","post","type-post","status-publish","format-standard","hentry"],"_links":{"self":[{"href":"https:\/\/www.benedictsol.com\/blogs\/wp-json\/wp\/v2\/posts\/217240","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.benedictsol.com\/blogs\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.benedictsol.com\/blogs\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.benedictsol.com\/blogs\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.benedictsol.com\/blogs\/wp-json\/wp\/v2\/comments?post=217240"}],"version-history":[{"count":0,"href":"https:\/\/www.benedictsol.com\/blogs\/wp-json\/wp\/v2\/posts\/217240\/revisions"}],"wp:attachment":[{"href":"https:\/\/www.benedictsol.com\/blogs\/wp-json\/wp\/v2\/media?parent=217240"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.benedictsol.com\/blogs\/wp-json\/wp\/v2\/categories?post=217240"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.benedictsol.com\/blogs\/wp-json\/wp\/v2\/tags?post=217240"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}