Introductory Accounting Exam Review
Course Introduction
Introductory Accounting provides students with a foundational understanding of basic accounting principles and practices. This course covers key concepts such as the accounting cycle, double-entry bookkeeping, preparation and analysis of financial statements, and the measurement of business transactions. Students will learn how to record, classify, and summarize financial data, and develop the skills necessary to analyze and interpret financial information for decision-making purposes. Emphasis is placed on the ethical considerations in accounting and the role of accountants in todays business environment.
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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Page 2
Chapter 1: Accounting and the Business Environment
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161 Verified Questions
161 Flashcards
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Sample Questions
Q1) Businesses can be organized in a variety of forms.The types of businesses commonly found in the U.S.include all of the following EXCEPT:
A) corporations.
B) state government-run companies.
C) partnerships.
D) proprietorships.
Answer: B
Q2) A business owner starts a new business and invests $6,000 of capital.This transaction results in an increase in the business's liabilities.
A)True
B)False
Answer: False
Q3) A U.S.publicly traded company does not come under SEC regulations as long as it follows the rules of GAAP.
A)True
B)False
Answer: False
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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) The following are the ending month's balances for Toys Galore. \(\begin{array}{|l|r|}
\hline \text { Accounts payable } & \$ 6,790 \\
\hline \text { Revenues } & 8,680 \\
\hline \text { Cash } & 4,500 \\
\hline \text { Expenses } & 1,050\\
\hline \text { Furniture } & 8,370 \\
\hline \text { Accounts receivable } & 7,710 \\
\hline \text { Capital } & 930 \\
\hline \text { Notes payable } & 5,230\\\hline
\end{array}\) What would be the last account listed on the trial balance for Toys Galore?
A) Revenue
B) Expenses
C) Cash
D) Accounts payable
Answer: B
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4
Chapter 3: The Adjusting Process
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160 Verified Questions
160 Flashcards
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Sample Questions
Q1) The accountant for Wilson Consulting Company failed to make an adjusting entry to record $3,000 of unearned service revenue that has now been earned.Which of the following is TRUE?
A) Total revenue is overstated.
B) Total revenue is understated.
C) Total expenses are overstated.
D) Total expenses are understated.
Answer: B
Q2) The financial statements should be prepared in this order: 1)income statement,2)balance sheet,and 3)owner's equity.
A)True
B)False Answer: False
Q3) A contra account has two characteristics: (1)a contra account is paired with a companion account,and (2)a contra account's normal balance is the same as that of the companion account.
A)True
B)False Answer: False
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Chapter 4: Completing the Accounting Cycle
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165 Flashcards
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Sample Questions
Q1) Under which of the following categories would Land appear?
A) Long-term assets
B) Current assets
C) Long-term liabilities
D) Current liabilities
Q2) Below is a list of various balance sheet accounts and their balances. Debit Credit \(\begin{array}{|l|r|r|}
\hline \text { Notes payable-short term } & & \$ 800 \\
\hline \text { Salary payable } & & 3,600 \\
\hline \text { Notes payable-long term } & & 20,000 \\
\hline \text { Accounts payable } & & 2,200 \\
\hline \text { Unearned revenue } & & 1,000 \\
\hline \text { Interest payable } & & 2,200\\\hline
\end{array}\) What are the total long-term liabilities that would be shown on the balance sheet?
A) $29,800
B) $9,000
C) $9,800
D) $20,000
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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) Merchandising consists of:
A) manufacturing products.
B) providing a service.
C) buying and selling products.
D) purchasing raw materials.
Q2) Sales revenues were $20,000,Sales returns and allowances were $300,Sales discounts were $700,Cost of goods sold were $12,000,and all other expenses totaled $4,500.The first closing entry would include which of the following line items?
A) Credit to Income summary of $19,000
B) Credit to Income summary of $20,000
C) Debit to Income summary of $2,500
D) Debit to Income summary of $16,500
Q3) Which of the following are the normal balances of Sales,Sales discounts,and Sales returns and allowances,respectively?
A) Debit, credit, and credit
B) Debit, debit, and credit
C) Credit, debit, and debit
D) Credit, credit, and debit
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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 requires that financial statements should report the LEAST favorable figures?
A) Accounting conservatism
B) Materiality concept
C) Disclosure principle
D) Consistency principle
Q2) A company purchased 100 units for $20 each on January 31.It purchased 100 units for $30 on February 28.It sold 150 units for $45 each from March 1 through December 31.If the company uses the average-cost inventory costing method,what is the amount of ending inventory on December 31?
A) $1,000
B) $1,250
C) $2,250
D) $1,500
Q3) Revenue is $400,000 and Cost of goods sold is $100,000.How much is the gross profit percent?
A) 75%
B) 25%
C) 60%
D) 40%
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Chapter 7: Internal Control and Cash
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161 Flashcards
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Sample Questions
Q1) Hofstra Services hired a new accounting manager.He signed a contract for a new accounting information system,but his position did not specify whether he was authorized to do so or not.
A) Assignment of responsibilities
B) Competent, reliable, and ethical personnel
C) Separation of duties
D) Documents
Q2) Check Number 367 for $33.52 was incorrectly entered as $33.25.Which adjustment needs to be made?
A) Decrease the book balance.
B) Decrease the bank statement balance.
C) Increase the book balance.
D) Increase the bank statement balance.
Q3) Cash in the bank is more liquid than a petty cash fund.
A)True
B)False
Q4) Cash is the most liquid of all company assets.
A)True
B)False
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Chapter 8: Receivables
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166 Flashcards
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Sample Questions
Q1) A credit card processing company generally uses one of two methods of payment-the net and the gross method.
A)True
B)False
Q2) A company uses the direct write-off method to account for uncollectible receivables.Which of the following is included in the entry to write off an uncollectible account?
A) A credit to the Allowance for uncollectible accounts
B) A credit to the customer's Account receivable
C) A debit to Allowance for uncollectible-accounts
D) No entry is made to write off uncollectible accounts.
Q3) A company has Net sales of $1,700,000,Beginning net receivables of $240,000 and Ending net receivables of $180,000.What is Days' sales in accounts receivable? (Please round to the nearest whole dollar.)
A) 50 days
B) 48 days
C) 45 days
D) 41 days
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Chapter 9: Plant Assets and Intangibles
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170 Flashcards
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Sample Questions
Q1) Goodwill is amortized each year,similar to other intangible assets.
A)True
B)False
Q2) Albatross Services scrapped a van.The van originally cost $40,000,had an estimated salvage value of zero,and an estimated life of 10 years.At the time it was scrapped,it had accumulated depreciation of $40,000.What was the effect of scrapping the van?
A) Gain of $2,000
B) No gain or loss
C) Loss of $1,000
D) Loss of $2,000
Q3) Azimuth Company purchases a small business for $450,000.The market value of the business's assets are $850,000,and the market value of the liabilities are $400,000.How much goodwill should Azimuth record?
A) None
B) $500,000
C) $450,000
D) $50,000
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Chapter 10: Current Liabilities and Payroll
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159 Verified Questions
159 Flashcards
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Sample Questions
Q1) Amounts owed for products or services purchased on account are contingent liabilities.
A)True
B)False
Q2) Booker Company reported sales revenue for 2013 of $800,000.The products were sold with a six-month warranty.Members of Booker's management estimate the cost of the warranty will be equal to 3% of sales revenue.Which of the following is included in the entry to record the actual amounts paid out as a result of warranty claims?
A) A debit to Estimated warranty payable for the actual amount of payments
B) A credit to Estimated warranty payable for $24,000
C) A debit to Estimated warranty payable for $24,000
D) A debit to Warranty expense for the actual amount of payments
Q3) Federal unemployment tax is a tax expense that is borne by the employer alone,and is not deducted from the employee's pay.
A)True
B)False
Q4) Unearned revenue is an obligation to provide goods or services to the customer.
A)True
B)False
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Chapter 11: Long-Term Liabilities, bonds Payable, and
Classification of Liabilities on the Balance Sheet
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Sample Questions
Q1) On July 1,2013,Avery Services issued a long-term note payable for $10,000.It is payable over a 5-year term in $2,000 installments on July 1 of each succeeding year.When the note was issued,the principal amount was recorded in Long-term notes payable and a second entry was made to reclassify the current portion.How will this information be shown on the balance sheet dated December 31,2013?
A) $10,000 shown as current liability only
B) $2,000 shown as current liability; $10,000 shown as long-term liability
C) $2,000 shown as current liability; $8,000 shown as long-term liability
D) The entire $10,000 shown as long-term liability
Q2) Installment payments for mortgages typically contain both an amount for principal repayment and an amount for interest.
A)True
B)False
Q3) Which of the following describes a term bond?
A) A bond that repays principal in installments
B) A bond that gives the bondholder a claim for specific assets if the issuer fails to pay
C) A bond that matures at one specified time
D) A bond that is not backed by specific assets
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