Accounting Problems
1. Communication of economic events is the part of the
accounting process that involves
a. identifying
economic events.
b. quantifying
transactions into dollars and cents.
c. preparing
accounting reports.
d. recording
and classifying information.
2. Which of the following events cannot be quantified into
dollars and cents and recorded as an accounting transaction?
a. The
appointment of a new CPA firm to perform an audit.
b. The
purchase of a new computer.
c. The sale
of store equipment.
d. Payment
of income taxes.
3. Which of the following would not be considered an
internal user of accounting data for the XYZ Company?
a. President
of the company
b. Production
manager
c. Merchandise
inventory clerk
d. President
of the employees’ labor union
4. Generally accepted accounting principles are
a. income
tax regulations of the Internal Revenue Service.
b. standards
that indicate how to report economic events.
c. theories
that are based on physical laws of the universe.
d. principles
that have been proven correct by academic researchers.
5. The cost of an asset and its fair market value are
a. never the
same.
b. the same
when the asset is sold.
c. irrelevant
when the asset is used by the business in its operations.
d. the same
on the date of acquisition.
6. The left side of an account is
a. blank.
b. a
description of the account.
c. the
debit side.
d. the
balance of the account.
7. Credits
a. decrease
both assets and liabilities.
b. decrease
assets and increase liabilities.
c. increase
both assets and liabilities.
d. increase
assets and decrease liabilities.
8. The normal balance of any account is the
a. left
side.
b. right
side.
c. side
which increases that account.
d. side
which decreases that account.
9. An accountant has debited an asset account for $1,000 and
credited a liability account for $500. Which of the following would be an
incorrect way to complete the recording of the transaction?
a. Credit an
asset account for $500.
b. Credit
another liability account for $500.
c. Credit
an stockholders’ equity account for $500.
d. Debit an
stockholders’ equity account for $500.
10. At January 1, 2008, Burton Industries reported
stockholders’ equity of $130,000. During 2008, The Company had a net loss of
$30,000 and paid dividends of $20,000. At December 31, 2008, the amount of
stockholders’ equity is
a. $130,000.
b. $140,000.
c. $100,000.
d. $80,000.
11. An
accounting time period that is one year in length, but does not begin on January
1, is referred to as
a. a fiscal
year.
b. an
interim period.
c. the time
period assumption.
d. a
reporting period.
12. The revenue recognition principle dictates that revenue
should be recognized in the accounting records
a. when cash
is received.
b. when it
is earned.
c. at the
end of the month.
d. in the
period that income taxes are paid.
13. The matching principle matches
a. customers
with businesses.
b. expenses
with revenues.
c. assets
with liabilities.
d. creditors
with businesses.
14. Assuming that there is a net loss for the period, debits
equal credits in all but which section of the worksheet?
a. Income
statement columns
b. Adjustments
columns
c. Trial
balance columns
d. Adjusted
trial balance columns
