Accounting Concepts and Principles
Solved Exam Questions
Course Introduction
Accounting Concepts and Principles introduces the foundational theories and practices that form the basis of accounting. The course explores essential concepts such as the accounting equation, double-entry bookkeeping, accruals and cash accounting, and the key qualitative characteristics of financial information. Students will gain an understanding of how transactions are recorded, how financial statements are prepared, and the regulatory environment underpinning accounting standards. Emphasis is placed on the role of accounting in decision-making, ethical considerations, and the importance of transparency and accuracy in financial reporting. This course sets the groundwork for more advanced study in accounting and finance.
Recommended Textbook
Accounting 9th Canadian Edition Volume I by Charles T. Horngren
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11 Chapters
1790 Verified Questions
1790 Flashcards
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Chapter 1: Accounting and the Business Environment
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161 Verified Questions
161 Flashcards
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Sample Questions
Q1) By definition,which of the following represents the owners of a corporation?
A) Customers
B) Creditors
C) Stockholders
D) Employees
Answer: C
Q2) The balance sheet of a business represents the account balances as of a particular date in time.
A)True
B)False
Answer: True
Q3) A business settles a liability by making a payment with cash.How does paying this liability affect the accounting equation?
A) Assets decrease; liabilities decrease.
B) Liabilities decrease; owner's equity increases.
C) Assets increase; liabilities increase.
D) Assets increase; liabilities decrease.
Answer: A
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Chapter 2: Recording Business Transactions
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163 Verified Questions
163 Flashcards
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Sample Questions
Q1) ABC Services reported the following transactions for September,2013.
A.The owner opened the business with a capital contribution of $23,500 cash.It was credited to Capital.
B.The business purchased office equipment for $11,500.The business paid cash of $2,500 down and put the balance on a note payable.
C.The business purchased $1,350 of supplies on account.
D.The business paid a utility bill for $980 cash.
E.The business paid $2,000 cash for September rent.
F.The business had sales of $20,000 in September.Of these sales,60% were cash sales,and the balance was credit sales.
G.The business paid $9,700 cash for office furniture. What is the total amount in the Cash account at the end of September,2013?
A)$15,520
B)$20,320
C)$28,320
D)$18,970
Answer: B
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Chapter 3: The Adjusting Process
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160 Verified Questions
160 Flashcards
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Sample Questions
Q1) The company uses the accrual method of accounting.What adjusting entry is needed at June 30?
\[\begin{array} { | l | r | r | }
\hline \quad\quad\quad&\quad&\quad \\
\hline \\ \hline \end{array}\]
Answer: \[\begin{array} { | l | r | r | }
\hline \text { Unearned revenue } & 30,000 & \\
\hline \text { Subscription revenue } & & 30,000 \\ \hline \end{array}\]
Q2) The revenue principle guides accountants in which of the following ways?
A) Ensures that information is reported at regular intervals
B) Determines when to record expenses
C) Determines when to record revenue
D) Dictates that expenses be deducted from revenues
Answer: C
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5
Chapter 4: Completing the Accounting Cycle
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165 Flashcards
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Sample Questions
Q1) Which of the following accounts will still show a balance after the closing process is completed?
A) Withdrawal account
B) Expense accounts
C) Accumulated depreciation account
D) Service revenue account
Q2) The ________ is the time span during which cash is paid for goods and services,which are then sold to customers from whom the business collects cash.
A) operating cycle
B) accounting period
C) calendar year
D) calendar quarter
Q3) Withdrawals is a permanent account.
A)True
B)False
Q4) The post-closing trial balance shows the updated Capital balance.
A)True
B)False
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Page 6
Chapter 5: Merchandising Operations
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168 Verified Questions
168 Flashcards
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Sample Questions
Q1) Net sales revenue is equal to Sales revenue less Cost of goods sold.
A)True
B)False
Q2) With a periodic inventory method,it is necessary to conduct a physical count of inventory to determine cost of goods sold.
A)True
B)False
Q3) If a company,using a perpetual inventory system,purchases inventory on account,and later returns $200 of goods to the vendor,what entry would be made to record the return of goods to the vendor?
A) $200 debit to Purchases and a $200 credit to Accounts payable
B) $200 debit to Accounts payable and a $200 credit to Inventory
C) $200 debit to Inventory and a $200 credit to Accounts payable
D) $200 debit to Accounts payable and a $200 credit to Purchases
Q4) Under a perpetual inventory system,which of the following would NOT be required?
A) Record cost of goods sold with each sale
B) Updating the inventory balance with each sale
C) Detailed inventory records
D) A weekly count of the inventory
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Chapter 6: Merchandising Inventory
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156 Verified Questions
156 Flashcards
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Sample Questions
Q1) Which of the following assets must be reported at the lower-of-cost-or-market?
A) Accounts receivable
B) Inventory
C) Prepaid insurance
D) Cash
Q2) The Cost of goods available for sale is equal to the:
A) Cost of goods sold minus the Ending inventory.
B) Sales revenue minus the Cost of goods sold.
C) Cost of goods sold plus the Ending inventory.
D) Ending inventory plus the Sales revenues.
Q3) When a company uses FIFO,the Cost of goods sold correlates to the most recently purchased goods,and the ending inventory correlates to the oldest goods in stock.
A)True
B)False
Q4) How much is Cost of goods sold for the month?
A) $180
B) $170
C) $150
D) $110
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Chapter 7: Internal Control and Cash
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161 Flashcards
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Sample Questions
Q1) Risk assessment is the "tone at the top" of a business,starting with the owner and the top managers.
A)True
B)False
Q2) A key to strong control over petty cash is to ensure that several persons serve as custodian at one time.
A)True
B)False
Q3) Internal and external auditors are part of which of the following components of internal control?
A) Monitoring controls
B) Information systems
C) Control procedures
D) Control environment
Q4) For good controls over cash payments,the person who orders goods from a supplier should always be different from the person who approves the payment.
A)True
B)False
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Page 9
Chapter 8: Receivables
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166 Flashcards
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Sample Questions
Q1) Which of the following are the two methods of estimating uncollectible receivables?
A) The allowance method and the amortization method
B) The aging-of-accounts-receivable method and the percent-of-sales method
C) The gross-up method and the direct write-off method
D) The direct write-off method and the percent-of-completion method
Q2) Which of the following are the two methods of accounting for uncollectible receivables?
A) The direct write-off method and the liability method
B) The asset method and the sales method
C) The allowance method and the liability method
D) The allowance method and the direct write-off method
Q3) At the end of the year,what is the ending balance in Uncollectible account expense?
A) $150
B) $800
C) $200
D) $850
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Chapter 9: Plant Assets and Intangibles
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Sample Questions
Q1) After the depreciation was updated,Barnhart's then recorded the sale transaction.The effect of the sale on the income of the company was a:
A) gain of $250.
B) loss of $1,650.
C) loss of $1,000.
D) loss of $2,900.
Q2) At the end of 2012,the truck had driven 30,000 miles.If the company uses units-of-production depreciation,please show the journal entry for the first year depreciation.
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\hline \quad\quad\quad&\quad&\quad \\
\hline \\
\hline
\end{array}\]
Q3) A plant asset is fully depreciated when the book value is:
A) greater than the salvage value.
B) greater than the market value.
C) equal to the salvage value.
D) equal to the market value.
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Page 11
Chapter 10: Current Liabilities and Payroll
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159 Flashcards
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Sample Questions
Q1) Sales revenue for a sporting goods store amounted to $215,000 for the current period.All sales are on account and are subject to a sales tax of 7%.Which of the following would be included in the journal entry to record these sales?
A) A debit to Sales revenue for $215,000
B) A credit to Accounts receivable for $215,000
C) A debit to Sales tax payable for $15,050
D) A debit to Accounts receivable for $230,050
Q2) FICA tax is a tax which is paid by the employer only and is not deducted from the employee's pay.
A)True
B)False
Q3) FICA tax is paid by the employer only and is not deducted from gross pay.
A)True
B)False
Q4) FUTA (federal unemployment compensation)tax is paid by the employer only and is not deducted from gross pay.
A)True
B)False
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Page 12
Chapter 11: Long-Term Liabilities, bonds Payable, and
Classification of Liabilities on the Balance Sheet
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Sample Questions
Q1) On January 2,2014,Mahoney Sales issued $10,000 in bonds for $9,400.They were 5-year bonds with a stated rate of 4%,and pay semiannual interest payments.Mahoney Sales uses the straight-line method to amortize the bond discount.After the second interest payment on December 31,2014,what was the bond carrying amount?
A) $9,520
B) $9,400
C) $9,460
D) $9,880
Q2) A mortgage payable is a debt that is backed with a security interest in property.
A)True
B)False
Q3) The issue price of a bond-whether it is sold at par,premium,or discount-has no effect on the required principal repayment at maturity.
A)True
B)False
Q4) The company will repay the principal amount of the bond on the maturity date. A)True B)False
Page 13
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