Principles of Accounting
Solved Exam Questions
Course Introduction
Principles of Accounting introduces the foundational concepts and practices of financial and managerial accounting. The course covers the accounting cycle, including the recording, classification, and summarization of business transactions, preparation of financial statements, and interpretation of financial information for decision-making purposes. Students will learn about generally accepted accounting principles (GAAP), the role of ethics in accounting, and basic analyses used in business planning and control. This course provides essential skills for understanding the financial landscape of an organization and serves as a basis for advanced accounting studies.
Recommended Textbook
Corporate Financial Accounting 15th Edition by Carl S. Warren
Available Study Resources on Quizplus
15 Chapters
3080 Verified Questions
3080 Flashcards
Source URL: https://quizplus.com/study-set/3516
Page 2
Chapter 1: Accounting and Business
Available Study Resources on Quizplus for this Chatper
244 Verified Questions
244 Flashcards
Source URL: https://quizplus.com/quiz/69844
Sample Questions
Q1) Which of the following is not a business transaction?
A) make a sales offer
B) sell goods for cash
C) receive cash for services to be rendered later
D) pay for supplies
Answer: A
Q2) An account receivable is a claim against a customer resulting from a sale on account.
A)True
B)False
Answer: True
Q3) Receiving a bill or otherwise being notified that an amount is owed is not recorded until the amount is paid.
A)True
B)False
Answer: False
Q4) What information does the income statement give to business users?
Answer: The income statement reports the revenues and expenses for a period of time. The result is either a net income or a net loss.
To view all questions and flashcards with answers, click on the resource link above. Page 3
Chapter 2: Double-Entry Accounting
Available Study Resources on Quizplus for this Chatper
216 Verified Questions
216 Flashcards
Source URL: https://quizplus.com/quiz/69843
Sample Questions
Q1) Which of the following entries records the acquisition of office supplies on account?
A) Office Supplies, debit; Cash, credit
B) Cash, debit; Office Supplies, credit
C) Office Supplies, debit; Accounts Payable, credit
D) Accounts Receivable, debit; Office Supplies, credit Answer: C
Q2) If the two totals of a trial balance are not equal, it could be due to
A) failure to record a transaction
B) recording the same erroneous amount for both the debit and the credit parts of a transaction
C) an error in determining the account balances, such as a balance being incorrectly computed
D) recording the same transaction more than once Answer: C
Q3) Accounts payable are accounts that you expect will be paid to you.
A)True
B)False
Answer: False
To view all questions and flashcards with answers, click on the resource link above.
4
Chapter 3: Adjustments: Accruals and Deferrals
Available Study Resources on Quizplus for this Chatper
204 Verified Questions
204 Flashcards
Source URL: https://quizplus.com/quiz/69842
Sample Questions
Q1) Accrued revenues would appear on the balance sheet as A) assets
B) liabilities
C) common stock
D) prepaid expenses
Answer: A
Q2) Accrued expenses are ordinarily reported on the balance sheet as A) assets
B) liabilities
C) fixed assets
D) prepaid expenses
Answer: B
Q3) When is the adjusted trial balance prepared?
A) before adjusting journal entries are posted
B) after adjusting journal entries are posted
C) after the adjusting journal entries are journalized
D) before the adjusting journal entries are journalized
Answer: B
To view all questions and flashcards with answers, click on the resource link above. Page 5
Chapter 4: The Accounting Cycle
Available Study Resources on Quizplus for this Chatper
212 Verified Questions
212 Flashcards
Source URL: https://quizplus.com/quiz/69841
Sample Questions
Q1) Which of the following accounts will be closed to the retained earnings account at the end of the fiscal year?
A) Rent Expense
B) Fees Earned
C) Income Summary
D) Depreciation Expense
Q2) Which of the accounts below would be closed by posting a debit to the account?
A) Unearned Revenue
B) Fees Earned
C) Dividends
D) Miscellaneous Expense
Q3) Cross-referencing is useful in assuring that the debits and credits are in balance.
A)True
B)False
Q4) An end-of-period spreadsheet heading is dated for a period of time.
A)True
B)False
Q5) List and describe the purpose of the four closing entries.
Q6) Describe a classified balance sheet.
Page 6
To view all questions and flashcards with answers, click on the resource link above.
Chapter 5: Accounting for Retail Businesses
Available Study Resources on Quizplus for this Chatper
272 Verified Questions
272 Flashcards
Source URL: https://quizplus.com/quiz/69840
Sample Questions
Q1) If payment is due by the end of the month in which the sale is made, the invoice terms are expressed as n/30.
A)True
B)False
Q2) During the current year, merchandise is sold for $137,500 cash and $425,600 on account. The cost of the goods sold is $322,325. What is the amount of the gross profit?
Q3) A physical inventory at the end of June was $882,000. Estimated Returns Inventory is expected to increase to $16,500. What is the amount of cost of goods sold for Cerelat Co. for the year? Use the list of accounts and their current balances given above for Cerelat Co.
A) $886,000
B) $832,500
C) $822,000
D) $825,000
Q4) Other revenue and expenses are items that are not related to the primary operating activity.
A)True
B)False
To view all questions and flashcards with answers, click on the resource link above. Page 7
Chapter 6: Inventories
Available Study Resources on Quizplus for this Chatper
204 Verified Questions
204 Flashcards
Source URL: https://quizplus.com/quiz/69839
Sample Questions
Q1) Use the information in the table to answer this question. If Addison uses the weighted average cost method, calculate the inventory balance at the end of September?
Q2) Cost flow is in the order in which costs were incurred when using
A) average cost
B) last-in, first-out
C) first-in, first-out
D) weighted average
Q3) Which of the following will be the same amount regardless of the cost flow assumption adopted?
A) number of items ordered
B) gross profit
C) cost of goods sold
D) ending inventory
Q4) Under a perpetual inventory system, the amount of each type of merchandise on hand is available in the
A) customer's ledger
B) creditor's ledger
C) inventory ledger
D) purchase ledger
To view all questions and flashcards with answers, click on the resource link above. Page 8
Chapter 7: Internal Control and Cash
Available Study Resources on Quizplus for this Chatper
197 Verified Questions
197 Flashcards
Source URL: https://quizplus.com/quiz/69838
Sample Questions
Q1) In preparing a bank reconciliation, the amount indicated by a credit memo for a note receivable collected by the bank is added to the balance per company's records.
A)True
B)False
Q2) Which is the better choice for evaluating across companies: Days' Cash on Hand or the amount in the company's Cash account?
A) The amount in the Cash account, because the company with the largest amount of cash is the most liquid.
B) Days' Cash on Hand, because it is calculated as a ratio, which expresses cash relative to the cash requirements of the business.
C) Days' Cash on Hand, because a daily cash amount is more accurate.
D) The amount in the Cash account, because companies with a lower cash balance are considered a greater credit risk.
Q3) An example of good internal controls over cash payments is the taking of all cash discounts offered.
A)True B)False
To view all questions and flashcards with answers, click on the resource link above.
9
Chapter 8: Receivables
Available Study Resources on Quizplus for this Chatper
183 Verified Questions
183 Flashcards
Source URL: https://quizplus.com/quiz/69837
Sample Questions
Q1) Allowance for Doubtful Accounts is a liability account.
A)True
B)False
Q2) On the basis of the following data related to assets due within one year for Webb Co., prepare a partial balance sheet in good form at December 31. Show total current assets. \[\begin{array} { l r }
\text { Cash } & \$ 96,000 \\
\text { Notes receivable } & 50,000 \\
\text { Accounts receivable } & 275,000 \\
\text { Allowance for doubtful accounts } & 40,000 \\
\text { Interest receivable } & 1,000 \end{array}\]
Q3) The direct write-off method records bad debt expense in the year the specific account receivable is determined to be uncollectible.
A)True
B)False
Q4) If a note receivable is dishonored, what is the effect on the accounting equation?
To view all questions and flashcards with answers, click on the resource link above. Page 10
Chapter 9: Long-Term Assets: Fixed and Intangible
Available Study Resources on Quizplus for this Chatper
240 Verified Questions
240 Flashcards
Source URL: https://quizplus.com/quiz/69836
Sample Questions
Q1) For income tax purposes, most companies use an accelerated deprecation method called double declining balance.
A)True
B)False
Q2) Which of the following statements is true?
A) A larger fixed asset turnover ratio is associated with firms that are more labor intensive and require smaller fixed asset investments.
B) The fixed asset ratio cannot be compared across time for an individual company.
C) A smaller fixed asset turnover ratio is associated with firms that are more labor intensive and require smaller fixed asset investments.
D) The fixed asset ratio is not useful for comparing different companies.
Q3) The ratio measuring the number of dollars of sales earned per dollar of fixed assets is the
A) fixed asset turnover ratio
B) days' in assets ratio
C) current asset turnover ratio
D) intangible asset ratio
To view all questions and flashcards with answers, click on the resource link above. Page 11
Chapter 10: Liabilities: Current, Installment Notes, and Contingencies
Available Study Resources on Quizplus for this Chatper
179 Verified Questions
179 Flashcards
Source URL: https://quizplus.com/quiz/69835
Sample Questions
Q1) Mobile Sales has five sales employees which receive weekly paychecks. Each earns $11.50 per hour and each has worked 40 hours in the pay period. Each employee pays 12% of gross in federal income tax, 3% of gross in state income tax, 6% of gross in social security tax, 1.5% of gross in Medicare tax, and 0.5% of gross in state disability insurance. Journalize the pay period ending January 19 which will be paid to the employees January 26.
Q2) On July 8, Jones Inc. issued an $80,000, 6%, 120-day note payable to Miller Company.
Assume that the fiscal year of Jones ends July 31. Using a 360-day year, what is the amount of interest expense recognized by Jones in the current fiscal year? When required, round your answer to the nearest dollar.
A) $700
B) $4,200
C) $307
D) $1,400
Q3) Payroll taxes levied against employees become liabilities
A) the first of the following month
B) when the payroll is paid to employees
C) when data are entered in a payroll register
D) at the end of an accounting period
Page 12
To view all questions and flashcards with answers, click on the resource link above.
Chapter 11: Liabilities: Bonds Payable
Available Study Resources on Quizplus for this Chatper
172 Verified Questions
172 Flashcards
Source URL: https://quizplus.com/quiz/69834
Sample Questions
Q1) A company issued $1,000,000 of 30-year, 8% callable bonds on April 1, with interest payable on April 1 and October 1. The fiscal year of the company is the calendar year. What is the journal entry needed when the bonds are issued at face value?
A) debit Bonds Payable, credit Cash
B) debit Cash and Discount on Bonds Payable, credit Bonds Payable
C) debit Cash, credit Premium on Bonds Payable and Bonds Payable
D) debit Cash, credit Bonds Payable
Q2) Only callable bonds can be purchased by the issuing corporation before maturity. A)True
B)False
Q3) Brubeck Co. issued $10,000,000 of 30-year, 8% callable bonds on May 1 of Year 1, with interest payable on May 1 and November 1. The fiscal year of the company is the calendar year. Journalize the entries to record the following selected transactions:
(a) Issued the bonds for cash at their face amount.
(b) Paid the interest on the bonds on November 1 of Year 3.
(c) Called one-fourth of the bonds at 104, the rate provided in the bond indenture, on May 1 of Year 10. (Omit entry for payment of interest.)
To view all questions and flashcards with answers, click on the resource link above. Page 13
Chapter 12: Corporations: Organization, Stock Transactions, and Dividends
Available Study Resources on Quizplus for this Chatper
190 Verified Questions
190 Flashcards
Source URL: https://quizplus.com/quiz/69833
Sample Questions
Q1) Carmen Company is a corporation that has issued both preferred and common stock. As of January 1, it had 50,000 shares of 2.75% $100 par, preferred stock outstanding and 250,000 shares of $10 par common stock outstanding. Journalize the following transactions.
(a) On January 31, the board of directors issues a requirement to purchase 5,000 shares of its common stock at market price. The shares are purchased at a market price of $22 per share.
(b) On March 15, Carmen declares a dividend on preferred stock of $2.75 per share. The date of record is March 25 and the date of payment is March 31.
(c) On December 1, Carmen declares a cash dividend on common stock of $0.12 per share. The date of record is December 15 and the date of payment is December 21.
(d) On December 27, the board orders that 2,500 shares of the treasury stock purchased in (a) be sold. The sale price is $25 per share.
To view all questions and flashcards with answers, click on the resource link above.
Page 14
Chapter 13: Statement of Cash Flows
Available Study Resources on Quizplus for this Chatper
186 Verified Questions
186 Flashcards
Source URL: https://quizplus.com/quiz/69832
Sample Questions
Q1) Sale of land
A)Increase cash from operating activities
B)Decrease cash from operating activities
C)Increase cash from investing activities
D)Decrease cash from investing activities
E)Increase cash from financing activities
F)Decrease cash from financing activities
G)Noncash investing and financing activity
Q2) On the statement of cash flows, the cash flows from operating activities section would include
A) receipts from the issuance of common stock
B) payment for interest on short-term notes payable
C) payments for the purchase of investments
D) payments for cash dividends
Q3) Cash flows from investing activities, as part of the statement of cash flows, include payments for the acquisition of fixed assets.
A)True
B)False
To view all questions and flashcards with answers, click on the resource link above. Page 15
Chapter 14: Financial Statement Analysis
Available Study Resources on Quizplus for this Chatper
206 Verified Questions
206 Flashcards
Source URL: https://quizplus.com/quiz/69831
Sample Questions
Q1) useful for comparing one company to another or to industry averages
A)solvency
B)leverage
C)times interest earned
D)horizontal analysis
E)vertical analysis
F)common-sized financial statements
G)current position analysis
H)profitability analysis
Q2) Cash and accounts receivable for Ashfall Co. are provided below: \(\begin{array}{lrr}
& \text { Current Year } & \text { Prior Year } \\
\text { Cash } & \$ 62,400 & \$ 58,000 \\
\text { Accounts receivable (net) } & 42,000 & 50,000 \end{array}\)
Based on this information, what is the amount and percentage of increase or decrease that would be shown on a balance sheet with horizontal analysis? Round percentages to one decimal place.
Q3) What is a major advantage of using percentages rather than dollar changes in doing horizontal and vertical analysis?
To view all questions and flashcards with answers, click on the resource link above. Page 16
Chapter 15:Investments
Available Study Resources on Quizplus for this Chatper
119 Verified Questions
119 Flashcards
Source URL: https://quizplus.com/quiz/69845
Sample Questions
Q1) Investments in stocks that are expected to be held for the long term are listed in the stockholder's equity section of the balance sheet.
A)True
B)False
Q2) Ramiro Company purchased 40% of the outstanding stock of Marco Company on January 1. Marco reported net income of $95,000 and declared dividends of $35,000 during the year. How much would Ramiro adjust its investment in Marco Company under the equity method?
Q3) Pepito Company purchased 40% of the outstanding stock of Reyes Company on January 1. Reyes reported net income of $75,000 and declared dividends of $15,000 during the current year. How much would Pepito adjust its investment in Reyes Company under the equity method?
Q4) An investor purchased 500 shares of common stock, $25 par, for $21,750. Subsequently, 100 shares were sold for $49.50 per share. What is the amount of gain or loss on the sale?
A) $12,750 gain
B) $600 gain
C) $600 loss
D) $9,250 loss
To view all questions and flashcards with answers, click on the resource link above. Page 17