Business Accounting
Exam Solutions
Course Introduction
Business Accounting is a foundational course that introduces students to the principles and practices of financial and managerial accounting within a business context. The course covers essential topics such as the accounting cycle, preparation and analysis of financial statements, accounting for assets and liabilities, and the use of accounting information for decision making. Students will gain an understanding of how accounting supports business operations, enables effective financial management, and fulfills regulatory requirements. Through practical exercises and case studies, students learn to record transactions, interpret financial data, and communicate financial information to stakeholders.
Recommended Textbook
Survey of Accounting 5th Edition by Carl S. Warren
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15 Chapters
1711 Verified Questions 1711 Flashcards
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Chapter 1: The Role of Accounting in Business
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94 Verified Questions
94 Flashcards
Source URL: https://quizplus.com/quiz/74463
Sample Questions
Q1) The Balance Sheet represents the accounting equation.
A)True
B)False
Answer: True
Q2) Expressing financial data as if a business will continue operating for an indefinite period time refers to which concept?
A)Business entity concept
B)Going concern concept
C)Objectivity concept
D)Adequate disclosure concept Answer: B
Q3) Recording revenue when a sale is made most directly relates to which concept?
A)Going concern concept
B)Periodicity concept
C)Matching concept
D)Adequate disclosure concept Answer: C
Q4) Name the three different types of businesses that operate for profit and their respective characteristics.
Answer: 11ea8a6e_31e9_9a41_96ef_6594500b0c7f_TB6232_00
Page 3
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Chapter 2: Basic Accounting Concepts
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88 Verified Questions
88 Flashcards
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Sample Questions
Q1) The accounting equation "Assets = Liabilities + Stockholders' Equity" is affected by transactions.Is it possible to have a transaction that only impacts one financial element of the equation? Two elements? Give examples.
Answer: Yes to both questions.Examples include: (1)increase cash and decrease equipment; (2)increase cash and increase stockholders' equity.
Q2) Paying expenses affects which financial statement elements?
A)Assets only
B)Stockholders' equity only
C)Assets and stockholders' equity
D)Assets and liabilities
Answer: C
Q3) The basic financial statements do NOT include the A)income statement.
B)tax return.
C)balance sheet.
D)statement of cash flows.
Answer: B
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4
Chapter 3: Accrual Accounting Concepts
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110 Verified Questions
110 Flashcards
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Sample Questions
Q1) For a corporation,stockholders' equity consists of A)assets plus liabilities.
B)current assets plus long-term assets.
C)intangible assets.
D)capital stock and retained earnings.
Answer: D
Q2) UNI Co.received $1,000 from Newbie as rent for the use of a building owned by UNI.How does this transaction affect UNI's accounts if UNI recognizes a liability?
A)Cash is increased and revenue is increased.
B)Cash is increased and revenue is decreased.
C)Cash is increased and unearned revenue is increased.
D)It is not recorded.
Answer: C
Q3) Under the cash basis of accounting,a business records only transactions involving increases or decreases of its cash.
A)True
B)False
Answer: True
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Chapter 4: Accounting for Merchandising Businesses
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142 Verified Questions
142 Flashcards
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Sample Questions
Q1) Orange Co.sells merchandise on credit to Zea Co.in the amount of $9,000.The invoice is dated on September 15 with terms of 1/15,net 45.What is the amount of the discount,and up to what date must the invoice be paid in order for the buyer to take advantage of the discount?
A)$180,September 30
B)$180,September 25
C)$90,September 30
D)$90,September 25
Q2) Which term indicates that merchandise is free of transportation charges to the buyer?
A)FOB destination
B)Transportation out
C)FOB shipping point
D)Transportation in
Q3) When someone purchases merchandise and incurs the cost of transportation,these costs of purchasing inventory are added to the cost of the inventory.
A)True
B)False
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Chapter 5: Sarbanes-Oxley,internal Control,and Cash
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109 Verified Questions
109 Flashcards
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Sample Questions
Q1) The data needed to adjust the depositor's accounts based on the bank reconciliation are shown as adjustments to the depositor's records.
A)True
B)False
Q2) What is the purpose of the Sarbanes-Oxley Act of 2002,and why was it enacted?
Q3) For a strong internal control system over cash,it is important to have the duties related to cash receipts and cash payments divided among different employees.
A)True
B)False
Q4) The framework that has become widely accepted as the standard by which companies design,analyze,and evaluate internal controls is the
A)Internal Control Integrated Framework by the Committee of Sponsoring Organizations.
B)Internal Control Integrated Framework by the Congress of Special Offerings.
C)Internal Control Localized Structure by the Committee of Sponsoring Organizations.
D)Internal Control Localized Structure by the Congress of Special Offerings.
Q5) List and define each of the five elements of internal control.
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Chapter 6: Receivables and Inventories
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100 Verified Questions
100 Flashcards
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Sample Questions
Q1) One of the weaknesses of the direct write-off method is that it
A)understates accounts receivable on the balance sheet.
B)violates the matching principle.
C)is too difficult to use for many companies.
D)is based on estimates.
Q2) During inflationary periods,the use of the FIFO method of costing inventory will result in a greater amount of net income than would result from the use of the LIFO cost method.
A)True
B)False
Q3) Of the three widely used inventory costing methods (FIFO,LIFO,and average),the FIFO method of costing inventory is based on the assumption that costs are charged against revenues in the order in which they were incurred.
A)True
B)False
Q4) Under the direct write-off method,an attempt is made to match Bad Debt Expense to sales revenues in the same accounting period.
A)True
B)False
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Chapter 7: Fixed Assets and Intangible Assets
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86 Verified Questions
86 Flashcards
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Sample Questions
Q1) The exclusive right to use a certain name or symbol is called a A)franchise.
B)patent.
C)trademark.
D)copyright.
Q2) Salvage value has a similar meaning as A)residual value.
B)scrap value.
C)book value.
D)both residual value and scrap value.
Q3) Computer equipment was acquired at the beginning of the year at a cost of $56,000 with an estimated residual value of $5,000 and an estimated useful life of 5 years.Determine the second year's depreciation using straight-line depreciation.
A)$10,200
B)$22,400
C)$11,200
D)$12,200
Q4) An intangible asset is one that has a physical existence. A)True B)False
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Chapter 8: Liabilities and Stockholders Equity
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132 Verified Questions
132 Flashcards
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Sample Questions
Q1) For the year that just ended,a company reports net income of $1,500,000.There are 500,000 shares authorized,300,000 shares issued,and 250,000 shares of common stock outstanding.What is the earnings per share?
A)$5.00
B)$2.50
C)$6.00
D)$3.00
Q2) The total earnings of an employee for a payroll period are referred to as A)take-home pay.
B)pay net of taxes.
C)net pay.
D)gross pay.
Q3) If prior to the last weekly payroll period of the calendar year,the cumulative earnings for an employee are $75,200,earnings subject to social security tax are $106,800,and the tax rate is 7.5%,the employer's social security tax on the $800 gross earnings paid on the last day of the year is $60.
A)True
B)False
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Chapter 9: Financial Statement Analysis
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83 Verified Questions
83 Flashcards
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Sample Questions
Q1) The percent of fixed assets to total assets is an example of A)vertical analysis.
B)solvency analysis.
C)profitability analysis.
D)horizontal analysis.
Q2) The effects of differences in accounting methods are of little importance when analyzing comparable data from competing businesses.
A)True
B)False
Q3) Which one of the following is NOT a characteristic generally evaluated in ratio analysis?
A)Liquidity
B)Profitability
C)Solvency
D)Marketability
Q4) An increase in the ratio of stockholders' equity to liabilities indicates an improvement in the margin of safety for creditors.
A)True
B)False
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Chapter 10: Accounting Systems for Manufacturing
Businesses
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116 Verified Questions
116 Flashcards
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Sample Questions
Q1) For which of the following businesses would the job order cost system be appropriate?
A)Custom cabinet manufacturer
B)Automobile manufacturer
C)Lumber mill
D)Meat processor
Q2) When the goods are completed,their costs are transferred from Work in Process to Finished Goods.
A)True
B)False
Q3) For a construction contractor,the wages of carpenters would be classified as direct labor cost.
A)True
B)False
Q4) Factory overhead is applied to production using a predetermined overhead rate.
A)True
B)False
Q5) Depreciation expense on factory equipment is part of factory overhead cost.
A)True
B)False
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Chapter 11: Cost Behavior and Cost-Volume-Profit Analysis
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139 Verified Questions
139 Flashcards
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Sample Questions
Q1) Company M had fixed costs of $262,500,variable costs of $625,000,and actual sales of $1,000,000.If the company has a break-even point at $700,000 in sales revenue,determine (a)the margin of safety expressed in dollars, (b)the margin of safety expressed as a percentage of sales, (c)the contribution margin ratio,and (d)the operating income.
Q2) As production increases,what should happen to the variable costs per unit?
A)Stay the same
B)Increase
C)Decrease
D)Either increase or decrease,depending on the fixed costs
Q3) If fixed costs are $850,000 and variable costs are 70% of sales,what is the break-even point (in dollars)?
A)$1,214,286
B)$1,983,333
C)$2,833,333
D)$2,550,000
Q4) For purposes of analysis,mixed costs can generally be separated into their variable and fixed components.
A)True
B)False
Page 13
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Chapter 12: Differential Analysis and Product Pricing
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102 Verified Questions
102 Flashcards
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Sample Questions
Q1) The unit selling price for the company's product is
A)$17.00.
B)$13.94.
C)$20.06.
D)$20.96.
Q2) What is a bottleneck?
A)A narrow area in the plant layout often causing the production process to slow due to the inability of production workers to move the product from station to station
B)A manufacturing strategy used to control the production process by minimizing or eliminating excess inventory
C)The point in the manufacturing process where demand for the product exceeds the ability to produce the product
D)All of these describe a bottleneck in the production process.
Q3) What is the differential cost of producing Product D?
A)$7 per pound
B)$5.25 per pound
C)$14 per pound
D)$8.75 per pound
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14
Chapter 13: Budgeting and Standard Cost Systems
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170 Verified Questions
170 Flashcards
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Sample Questions
Q1) Standards are more widely used for nonmanufacturing expenses than for manufacturing costs.
A)True
B)False
Q2) Assuming that the standard fixed overhead rate is based on full capacity,the cost of available but unused productive capacity is indicated by the
A)factory overhead cost volume variance.
B)direct labor cost time variance.
C)direct labor cost rate variance.
D)factory overhead cost controllable variance.
Q3) Which of the following is NOT a reason for a direct materials quantity variance?
A)Malfunctioning equipment
B)Purchasing of inferior raw materials
C)Material requiring rework
D)Spoilage of materials
Q4) The difference between the standard cost of a product and its actual cost is called a variance.
A)True
B)False
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Chapter 14: Performance Evaluation for Decentralized Operations
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137 Verified Questions
137 Flashcards
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Sample Questions
Q1) If Division Q's income from operations was $60,000 on invested assets of $400,000,the rate of return on investment is 15%.
A)True
B)False
Q2) Division A of Purvis Company has a rate of return on investment of 15% and an investment turnover of 1.6.What is the profit margin?
A)10%
B)12.5%
C)9.4%
D)24%
Q3) The balanced scorecard evaluates managers on financial and nonfinancial measures of performance.
A)True
B)False
Q4) The balanced scorecard attempts to evaluate the underlying financial drivers of nonfinancial performance.
A)True
B)False
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Chapter 15: Capital Investment Analysis
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103 Verified Questions
103 Flashcards
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Sample Questions
Q1) When evaluating a proposal by use of the net present value method,if there is an excess of the present value of future cash inflows over the amount to be invested,the rate of return on the proposal is less than the rate used in the analysis.
A)True
B)False
Q2) The methods of evaluating capital investment proposals can be grouped into two general categories that can be referred to as (1)methods that ignore present value and (2)present values methods.
A)True
B)False
Q3) Average rate of return equals estimated average annual income divided by average investment.
A)True
B)False
Q4) A qualitative characteristic that may impact upon capital investment analysis is manufacturing productivity.
A)True
B)False
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