Financial Accounting Quiz 1-4 – Flashcards

The organization(s) primarily responsible for establishing generally accepted accounting principles is(are) the FASB SEC no yes no no yes yes yes no

Which one of the following represents the expanded basic accounting equation? a. Assets = Liabilities + Common stock + Retained Earnings + Dividends - Revenues - Expenses. b. Assets + Dividends + Expenses = Liabilities + Common stock + Retained Earnings + Revenues. c. Assets - Liabilities - Dividends = Common stock + Retained Earnings + Revenues - Expenses. d. Assets = Revenues + Expenses - Liabilities.

TransAm Mail Service purchased equipment for $2,500. TransAm paid $400 in cash and signed a note for the balance. TransAm debited the Equipment account, credited Cash and a. nothing further must be done. b. credited another asset account for $400. c. credited a liability account for $2,100. d. debited the retained earnings account for $2,100.

The first step in the recording process is to a. post to a journal. b. analyze each transaction for its effect on the accounts. c. prepare a trial balance. d. prepare financial statements.

The ledger should be arranged in a. financial statement order. b. dollar amount order. c. alphabetical order. d. chronological order.

The steps in preparing a trial balance include all of the following except a. listing the account titles and their balances. b. totaling the debit and credit columns. c. proving the equality of the two columns. d. transferring journal amounts to ledger accounts.

An accounting time period that is one year in length, but does not begin on January 1, is referred to as a. a reporting period. b. an interim period. c. a fiscal year. d. the time period assumption.

If a resource has been consumed but a bill has not been received at the end of the accounting period, then a. an expense should be recorded when the bill is received. b. an adjusting entry should be made recognizing the expense. c. it is optional whether to record the expense before the bill is received. d. an expense should be recorded when the cash is paid out.

The difference between the cost of a depreciable asset and its related accumulated depreciation is referred to as the a. depreciated difference of the asset. b. market value of the asset. c. blue book value of the asset. d. book value of the asset.

NWA Air Charter signed a four-month note payable in the amount of $20,000 on September 1. The note requires interest at an annual rate of 9%. The amount of interest to be accrued at the end of September is a. $200. b. $150. c. $1,800. d. $600.

The time period assumption states that the economic life of a business can be divided into a. equal time periods. b. cyclical time periods. c. artificial time periods. d. perpetual time periods.

The information for preparing a trial balance on a worksheet is obtained from a. business documents. b. general journal entries. c. financial statements. d. general ledger accounts.

The final closing entry to be journalized is typically the entry that closes the a. expense accounts. b. retained earnings account. c. revenue accounts. d. dividends account.

Which of the following would not be classified a long-term liability? a. Current maturities of long-term debt b. Bonds payable c. Mortgage payable d. Lease liabilities

Correcting entries are made a. at the beginning of an accounting period. b. at the end of an accounting period. c. whenever an error is discovered. d. after closing entries.

The final step in the accounting cycle is to prepare a. a post-closing trial balance. b. adjusting entries. c. closing entries. d. financial statements.