Accounting Fundamentals Exam Practice Tests
Course Introduction
Accounting Fundamentals introduces students to the basic principles and concepts of accounting, focusing on the accounting cycle, financial statements, and the role of accounting in business decision-making. The course covers topics such as recording and analyzing business transactions, managing ledgers and journals, preparing trial balances, and understanding income statements, balance sheets, and cash flow statements. Emphasis is placed on developing practical skills and a solid foundation for interpreting financial information, essential for further study in business and finance.
Recommended Textbook Financial Accounting 1st Canadian Edition by Jeffrey Waybright
Available Study Resources on Quizplus
12 Chapters
1471 Verified Questions
1471 Flashcards
Source URL: https://quizplus.com/study-set/1487
Page 2
Chapter 1: Business, Accounting, and You
Available Study Resources on Quizplus for this Chatper
120 Verified Questions
120 Flashcards
Source URL: https://quizplus.com/quiz/29536
Sample Questions
Q1) Cash and accounts receivable are both a part of: A) assets.
B) retained earnings. C) liabilities.
D) common shares.
E) preferred shares
Answer: A
Q2) In the accounting profession there are several areas of expertise. Name the four main areas of expertise.
Answer: Financial Accounting Managerial Accounting Taxation
Banking and Financial Services
Q3) How would the payment of expenses affect the accounting equation?
Answer: Decrease shareholders' equity and decrease assets.
Q4) Subway is famous for their subway sandwiches. At the end of 2013, Subway's total assets were $345,000, and total liabilities were $129,500. Calculate Subway's shareholders' equity.
Answer: $215,500
Calculation: $345,000-$129,500= $215,000
Page 3
To view all questions and flashcards with answers, click on the resource link above.
Chapter 2: Analyzing and Recording Business Transactions
Available Study Resources on Quizplus for this Chatper
133 Verified Questions
133 Flashcards
Source URL: https://quizplus.com/quiz/29537
Sample Questions
Q1) Dividends, accounts receivable, and buildings have normal balances of __________, __________, and __________, respectively.
Answer: debit, debit, and debit
Q2) The act of recording a transaction is called "journalizing".
A)True
B)False
Answer: True
Q3) The fact that each transaction has a dual effect on the accounting equation provides the basis for what is called:
A) single-entry accounting.
B) double-entry accounting.
C) compound-entry accounting.
D) multiple-entry accounting.
E) re-allocation of accounting.
Answer: B
Q4) Obligations owed by a company to banks, for instance, are called __________.
Answer: notes payable
Q5) The columns on a trial balance represent __________.
Answer: debits and credits.
To view all questions and flashcards with answers, click on the resource link above. Page 4
Chapter 3: Adjusting and Closing Entries
Available Study Resources on Quizplus for this Chatper
127 Verified Questions
127 Flashcards
Source URL: https://quizplus.com/quiz/29538
Sample Questions
Q1) The adjusted trial balance for the land account:
A) must be equal to the unadjusted trial balance total.
B) must be greater than the unadjusted trial balance total. C) must be less than the unadjusted trial balance total.
D) has no relationship to the unadjusted trial balance total.
E) must never be equal to the unadjusted trial balance total.
Answer: A
Q2) Accounts receivable would be an example of a(n) __________.
Answer: accrued revenue
Q3) Recording office supplies as an asset after paying for them would be considered a deferral.
A)True
B)False
Answer: True
Q4) The unadjusted trial balance for prepaid insurance shows a $1,350 balance. $500 of the balance was unexpired at year end. The adjusted trial balance for prepaid insurance is a __________.
Answer: $850 debit
Calculation:
1,350 - 500 = 850
Page 5
To view all questions and flashcards with answers, click on the resource link above.
Chapter 4: Ethics, Internal Control, and Cash
Available Study Resources on Quizplus for this Chatper
134 Verified Questions
134 Flashcards
Source URL: https://quizplus.com/quiz/29539
Sample Questions
Q1) Small companies' internal control is always inferior.
A)True
B)False
Q2) Establishing fake companies, then having the company pay for goods or services that will never be delivered, and then intercepting and cashing the cheques would be an example of a(n) __________.
Q3) A company may be limited in its internal control procedures because the cost of hiring enough people to implement the procedures:
A) outweighs the benefits of the system.
B) has nothing to do with the effectiveness of the internal control system.
C) can prevent collusion.
D) can limit employee distractions.
E) can make employees scared.
Q4) In order to get a handle on accounting fraud, the U. S. Congress in 2002 passed the
Q5) __________ embezzlement is a form of fraud committed against an organization.
Q6) The Pumpkin Party Company deposited $1,000 into its bank account, but the bank statement does not show the deposit. This $1,000 is an example of a(n) __________.
To view all questions and flashcards with answers, click on the resource link above. Page 6
Chapter 5: Accounting for a Merchandising Business
Available Study Resources on Quizplus for this Chatper
139 Verified Questions
139 Flashcards
Source URL: https://quizplus.com/quiz/29540
Sample Questions
Q1) Prepare the journal entries in Big's Books to record the following transactions using the perpetual inventory system:
October 1 Big Inc. purchased $5,400 of merchandise on account from Bargain Inc., terms 3/15, n/45, FOB shipping point. Bargain prepaid the $125 shipping cost and added the amount to the invoice.
October 4 Big sold $950 (cost, $250) of merchandise on account to Wills Corp., terms 2/10 n/45, FOB destination.
October 5 Big paid $25 freight charges to deliver goods to Wills.
October 8 Big returned $600 of the merchandise purchased on October 1 and received a credit.
October 11 Paid Bargain the amount due from the October 1 purchase in full.
October 12 Wills returned $175 (cost, $100) of merchandise from the October 4 sale.
October 13 Received payment in full from Wills for the October 4sale.
Q2) What type of liabilities are wages payable, income taxes payable, and accounts payable?
Q3) If an invoice reads n/15, what does this mean?
To view all questions and flashcards with answers, click on the resource link above.
Page 7
Chapter 6: Inventory
Available Study Resources on Quizplus for this Chatper
138 Verified Questions
138 Flashcards
Source URL: https://quizplus.com/quiz/29541
Sample Questions
Q1) Goods available for sale are $25,000; beginning inventory is $8,000; ending inventory is $12,000; and cost of goods sold is $10,000. What is the inventory turnover?
Q2) Manufacturers generally purchase large amounts of products from wholesalers and resell them to retailers.
A)True
B)False
Q3) 2012 ending inventory is $27,000; 2013 ending inventory is $19,000;2014 ending inventory is $21,000; and cost of goods sold is $63,500 for 2014 and $65,900 for 2013. What is the inventory turnover for 2013 and 2014? Has the inventory turnover improved?
Q4) If cost of goods sold was understated in Period 1, then what is the effect of cost of goods sold and gross profit in Period 2?
Q5) Other than the cost of purchasing the inventory, another large cost of inventory would be storage of the inventory.
A)True
B)False
Q6) A manufacturer uses __________ inventory to produce the goods it sells.
Q7) What does a manufacturer's goods available for sell represent?
Page 8
To view all questions and flashcards with answers, click on the resource link above.
Chapter 7: Sales and Receivables
Available Study Resources on Quizplus for this Chatper
86 Verified Questions
86 Flashcards
Source URL: https://quizplus.com/quiz/29542
Sample Questions
Q1) Isaiah Company converted a $4,000 account receivable from Mark to a 75-day, 8% note receivable. The maturity value (assume a 360-day year) that will be due from Mark in 75 days (round to nearest dollar) is:
A) $4,000.
B) $4,067.
C) $4,320.
D) $4,077.
E) some other number.
Q2) A retailer has 3% credit/debit card service fees deducted from the proceeds from each sale. The retailer has $1,700 in sales for the day. The journal entry to record these sales would be __________.
Q3) Journalize the following transactions for Allan Company using the allowance method:
April 21 Sold $560 of merchandise on account to Bill Smith.
June 30 Bill Smith filed bankruptcy and his account was written off.
August 1 Replaced Joe's $4,500 receivable balance with a 4%- 8month note.
Dec 31 Recorded Bad Debts Expense based on 6% of credit sales of $120,000
Dec 31 Recorded interest on the note.
Q4) What are the most desirable form of sales?
To view all questions and flashcards with answers, click on the resource link above. Page 9
Chapter 8: Long-Term Assets
Available Study Resources on Quizplus for this Chatper
161 Verified Questions
161 Flashcards
Source URL: https://quizplus.com/quiz/29543
Sample Questions
Q1) Malinda Enterprises purchases land for $245,000 by signing a note payable for the same amount. The company also pays for the following: $2,500 in realtor commission, $6,400 to remove an old building, $3,300 to have the land fenced, and $2,700 for outdoor lighting. They also purchased machinery for $40,000 cash. Prepare the journal entry required.
Q2) What is the definition of betterments such as an addition to an existing building?
Q3) Computing depletion expense is much like computing depreciation under the straight-line method.
A)True
B)False
Q4) Which of the following would NOT be considered as part of the cost of a constructed building?
A) Building permit fees
B) Contractor charges
C) Survey and legal fees
D) Architectural fees
E) Labour costs for construction of building
Q5) What are the three common ways that an asset can be disposed of?
Q6) Under Canadian ASPE when is it required that the impairment test occur?
Page 10
To view all questions and flashcards with answers, click on the resource link above.
Chapter 9: Current Liabilities and Long-Term Debt
Available Study Resources on Quizplus for this Chatper
90 Verified Questions
90 Flashcards
Source URL: https://quizplus.com/quiz/29544
Sample Questions
Q1) A $300,000 issue of bonds that sold at 105 will cost __________.
Q2) On June 30, Hanson Company purchased a building for $600,000. The company made a cash payment of $200,000 and signed a twenty-year, 8% mortgage note payable for the remainder. Payments of $40,000 are made every June 30 and December 31. The building has a useful life of twenty years and a residual value of $100,000. Hanson uses the straight-line depreciation method and prepares its adjusting entries on an annual basis. Journalize the June 30 transactions, any annual adjusting entries for December 31, and the mortgage payment on December 31.
Q3) Using the information below, write the journal entry to record the payment of the bond on the maturity date.
A $250,000 issue of bonds that sold for $275,000 matures on June 25, 2020.
Q4) There are times when contingent liabilities are never recorded.
A)True
B)False
Q5) A lessor is a person who gives/ grants a lease.
A)True
B)False
Q6) The rate of interest that is printed on the bond is called the __________ rate of interest.
Page 11
To view all questions and flashcards with answers, click on the resource link above.
Chapter 10: Corporations: Share Capital and Retained Earnings
Available Study Resources on Quizplus for this Chatper
119 Verified Questions
119 Flashcards
Source URL: https://quizplus.com/quiz/29545
Sample Questions
Q1) ABC Company declares a 2-for-1 stock split of its common shares. The company has 100,000 common shares authorized and 40,000 common shares issued and outstanding. How many shares are authorized and outstanding after the split?
Q2) Aztec Industries has 100,000 common shares outstanding and 10,000 $2 cumulative preferred shares. If the company declares a total dividend of $35,000, how much will be distributed to common shareholders?
Q3) A type of share that pays dividends in arrears is called a __________,
Q4) A corporation may issue shares for other than cash, requiring the recording of the assets at current market value.
A)True B)False
Q5) Explain how the recording of the purchase of treasury shares differs when cash paid is less than or greater than the average cost.
Q6) The liability "dividend payable" is recognized on the date of __________.
Q7) Treasury shares are recorded at __________.
Q8) Why are shares not referred as "no-par shares"?
Q10) What is an organization authorized to sell once it has become a corporation? Page 12
Q9) Explain the difference between cumulative and non-cumulative preferred shares.
To view all questions and flashcards with answers, click on the resource link above. Page 13
Chapter 11: The Cash Flow Statement
Available Study Resources on Quizplus for this Chatper
111 Verified Questions
111 Flashcards
Source URL: https://quizplus.com/quiz/29546
Sample Questions
Q1) The proceeds from the sale of equipment under the direct method would be reported:
A) in the investing section of the cash flow statement.
B) in the operating section of the cash flow statement.
C) in the financing section of the cash flow statement.
D) as a separate disclosure.
E) in the management section of the cash flow statement.
Q2) Of the following, which is NOT classified as an investing activity on the cash flow statement?
A) Sale of equipment for cash
B) Purchasing land
C) Collecting the principal on loans
D) Selling goods and services
E) Buying computer equipment
Q3) Identify the three business activities on the cash flow statement and which type of accounts are affected by the cash flows of each.
Q4) Making a loan to another company is an example of a cash outflow from __________ activities.
Q5) What type of accounts do investing cash flows affect?
Q6) How would depreciation of factory equipment be reported under the direct method?
Page 14
To view all questions and flashcards with answers, click on the resource link above.
Chapter 12: Financial Statement Analysis
Available Study Resources on Quizplus for this Chatper
112 Verified Questions
112 Flashcards
Source URL: https://quizplus.com/quiz/29547
Sample Questions
Q1) Which section of the income statement does NOT report net of income taxes or net of income tax savings?
Q2) Isaiah Company has net income of $720,000, beginning total assets of $2,100,000, and ending total assets of $2,300,000. Isaiah's return on total assets is __________.
Q3) Casey Company reported the following for 2011:
Net sales: $220,000
Net income: $37,000
Market price per common share: $35.50
Preferred dividends paid: $4,100
Number of common shares: 10,000
What are the earnings per share for Casey Company (to the nearest cent)?
Q4) Common-size statements use the same percentages that are computed during a __________ analysis, but no dollar amounts are shown.
Q5) The last section of an income statement report (before earnings per share data) is
Q6) Rick's has a cash balance of $80,000; short-term investments of $20,000; net receivables of $60,000; and inventory of $450,000. Current liabilities total $200,000. Ricks' acid test (quick ratio) is within __________.
To view all questions and flashcards with answers, click on the resource link above. Page 15