1. Which of the following is not true of a worksheet?
- The worksheet is included as a part of the published financial statements
2. An adjusting entry to accrue wages incurred but not yet paid is an example
- Reflecting unrecorded expenses incurred during an accounting period
3. Which description of a transaction is not possible?
- Increase assets; decrease liability
4. To post in accounting means to:
- Copy the information about account changes from the journal, and place it into the ledger.
5. Which of the following phrases describes the effects of the purchase of an asset on account?
- Increase in assets and increase in liabilities
6. When special journals are used, which of the following is true?
- All cash receipts should be recorded in the cash receipts journal
7. Which statement is correct concerning the recognition of income and expense?
- Both I and II
8. Which one of these is not among the criteria to consider an event as accountable?
- It must be classified as external event rather than an internal event
9. Based on a standard 10-column worksheet, net income exists when
- The income statement credit total exceeds the income statement debit total
10. These are qualities or attributes that make financial accounting information useful to others. (not sure)
- Qualitative Characteristics
11. The accrual of employee wages shall be recorded in the
- General Journal
12. All of the following statements are true, except
- Adjusting entries are required for a business that uses the cash basis
13. Economic data on the transactions and other accountable events of an entity are collected by means of
- Source documents
14. In a double-entry accounting system
- A debit entry is recorded on the left side of a T-account
15. Rent received in advance shall be treated as
- A liability
16. When special journals are used, the most likely source of a credit posting to an expense account in the general ledger is
the
- General Journal
17. The allowance for doubtful accounts which appears as a deduction from accounts receivable on a balance sheets an
application of the
- Matching principle
18. Adjusting entries that should be reversed include prepaid items that
- Create an asset account when adjusted
19. These statement users need information that will assist them in general trends and recent developments in the prosperity
of the enterprise and the range of its activities.
- General public
20. The matching concept
- Refers to process of associating expenses with revenues
21. What is the correct order of the following events in the accounting process?
- II, I, III
22. The area within the accounting field that has the main purpose of serving information needs of parties outside the
reporting organization.
- Financial accounting
23. Which of the following best states the purpose of general-purpose financial statements?
- To help users make decisions
24. Which of the following types of accounts measure economic flows over a period of time?
- Nominal (temporary) accounts
25. Which of the following is not an enhancing qualitative characteristic of financial statement according to the Framework?
- Relevance
26. The debit and credit analysis of a transaction normally takes place
- Before an entry is recorded in a journal
27. Accounting information is considered to be relevant when it
- Is capable of making a difference in a decision
28. Sales discounts should appear in the financial statements
- As a deductions from sales
29. Reversing entries are used:
- Primarily to simplify the bookkeeping during the next accounting period.
30. Which is the correct sequence for recording transactions and preparing financial statements?
- Journal, ledger, trial balance, financial statements
31. The receipt of advance rental fee is recorded by debiting cash and crediting unearned rent, this approach of recording is
known as
- Liability method
32. When should an item that meets the definition of an element be recognized, according to the Conceptual Framework?
- When it is probable that any future economic benefit associated with the item will flow to or from the entity and the
item has a cost or value that can be measured with reliability.
33. Which is false concerning use of special journals?
- Only sales of merchandise on account are recorded in the sales journal. Cash sales are recoded in the cash receipts
journal
34. The accounting equation cab be expresses as
- Assets – Liabilities = Owner’s Equity
35. The valuation of assets in the statement of financial position is generally based on
- Current fair market value as established by independent appraisers
36. If a real state company fails to accrue commission revenue
- Assets are understated and net income is understated
37. Which of the following is an internal user of a company’s financial information?
- Company executive
38. In the accounting cycle, a worksheet is prepared:
- Before adjusting entries are entered into the journal and posted to the ledger
39. Continuation of accounting entity in the absence of evidence to the contrary is an example of the basic concept of
- Going concern
40. For financial information to be useful, there must be a linkage between the decisions makers and the decisions they make.
This link is
- Understandability
41. The basic summary device of accounting is
- Account
42. Credits are used to record increases in
- Revenues, liabilities, and Owner’s Equity
43. A general account which summarizes the collection of related accounts appearing in a subsidiary ledger is called
- control account
44. which of the following is an application of the science aspect of accounting?
- Applying the rules of debit and credit
45. The consistency standard of reporting requires that
- The effect of changes in accounting upon income be properly disclosed
