50
Accounting questions
1 If the perpetual inventory system is used, the account entitled Merchandise Inventory is debited for purchases of merchandise.
True False
2 The lower-of-cost-or-market method of determining the value of ending inventory can be applied on an item-by-item, by major classification of inventory, or by the total inventory.
True False
3 One negative effect of carrying too much inventory is risk that customers will change their buying habits.
True False
4 The cost of repairing damage to a machine during installation is debited to a fixed asset account.
True False
5 Capital expenditures are costs of acquiring, constructing, adding, or replacing property, plant and equipment.
True False
6 The cost of replacing an engine in a truck is an example of ordinary maintenance.
True False
7 A capitalized asset will appear on the balance sheet as a long term/asset.
True False
8 The normal balance of the accumulated depreciation account is debit.
True False
9 For a current liability to exist, the following two tests must be met. The liability must be due usually within a year and must be paid out of current assets.
True False
12 The tax rates for withholding Social Security and Medicare vary by state.
True False
13 FICA tax becomes a liability to the federal government at the time an employee's payroll is prepared.
True False
14 A partnership is like a corporation in that it is a legal entity separate from its owners.
True False
15 Each partner in a partnership has a separate capital and withdrawal account.
True False
16 Partner A devotes full time and Partner B devotes one-half time to their partnership. If the partnership agreement is silent concerning the division of net income, Partner A will receive a $20,000 share of a net income of $30,000.
True False
17 When a partner withdraws from the partnership, the partnership dissolves.
True False
18 When a new partner is admitted to a partnership, all partnership assets should be revised to reflect current prices.
True False
19 The partner capital accounts may change due to capital additions, net income, or withdrawals.
True False
20 The financial loss that each stockholder in a corporation can incur is usually limited to the amount invested by the stockholder.
True False
21 The balance in Retained Earnings at the end of the period is created by closing entries.
True False
22 When a corporation issues stock at a premium, it reports the premium as another income item on the income statement.
True False
23 A large retained earnings account means that there is cash available to pay dividends.
True False
24 When the board of director's declares a cash dividend, this action causes the corporation to incur a liability to pay the amount of the dividend.
True False
25 Bonds of major corporations are traded on bond exchanges.
True False
26 If the bondholder has the right to exchange a bond for shares of common stock, the bond is called a convertible bond.
True False
27 The face value of a term bond is payable at a single specific date in the future.
True False
28 When a corporation issues bonds, it executes a contract with the bondholders, known as a bond debenture.
True False
29 The times interest earned ratio (also referred to as the number of times interest charges are earned) is calculated by dividing Bonds Payable by Interest Expense.
True False
31 Under a perpetual inventory system, the amount of each type of merchandise on hand is available in the
customer's ledger creditor's ledger inventory ledger merchandise inventory account in the general ledger
32 Taking a physical count of inventory
is not necessary when a periodic inventory system is used
should be done near year-end
has not internal control relevance
is not necessary when a perpetual inventory system is used
33 Under the _________ inventory method, accounting records maintain a continuously updated inventory value.
retail periodic physical perpetual
34 The method of computing inventory that uses records of the selling prices of the merchandise is called
retail method last-in, first-out first-in, first-out average cost
35 Expenditures that add to the usefulness of fixed assets for more than one accounting period are
committed expenditures revenue expenditures current expenditures capital expenditures
36 A capital expenditure results in a debit to
an expense account a capital account a liability account an asset account
37 All of the following below are needed for the calculation of straight-line depreciation except
cost
residual value estimated life units produced
38 Payroll journal entries are made with data from the
wage and tax statement employee's earnings record employer's quarterly federal tax return payroll register
39 Which of the following forms is typically given to employees at the end of the calendar year so that employees can file their individual income tax forms?
Employment Withholding Allowance Certificate (W-4)
Wage and Tax Statement (Form W-2)
Employer's Quarterly Federal Tax Return (Form 941)
Employer’s Annual Federal Unemployment Tax Return (Form 940)
40 A pension plan which requires the employer to make annual pension contributions, with no promise to employees regarding future pension payments, is termed
funded unfunded defined benefit defined contribution
41 A pension plan which promises employees a fixed annual pension benefit, based on years of service and compensation, is called a(n)
defined contribution plan defined benefit plan unfunded plan funded plan
42 The remaining cash of a partnership (after creditors have been paid) upon liquidation is divided among partners according to their
capital balances contribution of assets drawing balances income sharing ratio
43 Paul and Roger are partners who share income in the ratio of 3:2. Their capital balances are $90,000 and $130,000 respectively. Income Summary has a credit balance of $50,000. What is Roger’s capital balance after closing Income Summary to Capital?
$155,000 $150,000 $110,000 $115,000
44 In which section of the financial statements would Paid-In Capital from Sale of Treasury Stock be reported? other expense on the income statement
intangible assets on the balance sheet
stockholders' equity on the balance sheet
other income on the income statement
45 Which of the following is not classified as paid-in capital on the balance sheet?
common stock common stock distributable donated capital treasury stock
46 Significant changes to stockholders’ equity are reported in
the income statement the retained earnings statement the statement of stockholders' equity the statement of cash flows
47 If $1,000,000 of 8% bonds are issued at 105, the amount of cash received from the sale is
$1,080,000 $950,000 $1,000,000 $1,050,000
48 If bonds are issued at a discount, it means that the
bondholder will receive effectively less interest than the contractual rate of interest
market interest rate is lower than the contractual interest rate
market interest rate is higher than the contractual interest rate
financial strength of the issuer is suspect
49 Sinking Fund Investments would be classified on the balance sheet as
a current asset a fixed asset an investment a deferred debit
50 Sinking Fund Income is reported in the income statement as
income from operations extraordinary gain on sinking fund transactions other income
File name: 50 accounting questions.doc File type: doc PRICE: $25
1 If the perpetual inventory system is used, the account entitled Merchandise Inventory is debited for purchases of merchandise.
True False
2 The lower-of-cost-or-market method of determining the value of ending inventory can be applied on an item-by-item, by major classification of inventory, or by the total inventory.
True False
3 One negative effect of carrying too much inventory is risk that customers will change their buying habits.
True False
4 The cost of repairing damage to a machine during installation is debited to a fixed asset account.
True False
5 Capital expenditures are costs of acquiring, constructing, adding, or replacing property, plant and equipment.
True False
6 The cost of replacing an engine in a truck is an example of ordinary maintenance.
True False
7 A capitalized asset will appear on the balance sheet as a long term/asset.
True False
8 The normal balance of the accumulated depreciation account is debit.
True False
9 For a current liability to exist, the following two tests must be met. The liability must be due usually within a year and must be paid out of current assets.
True False
11 The proceeds of a discounted
note are equal to the face value of the note.
True
False12 The tax rates for withholding Social Security and Medicare vary by state.
True False
13 FICA tax becomes a liability to the federal government at the time an employee's payroll is prepared.
True False
14 A partnership is like a corporation in that it is a legal entity separate from its owners.
True False
15 Each partner in a partnership has a separate capital and withdrawal account.
True False
16 Partner A devotes full time and Partner B devotes one-half time to their partnership. If the partnership agreement is silent concerning the division of net income, Partner A will receive a $20,000 share of a net income of $30,000.
True False
17 When a partner withdraws from the partnership, the partnership dissolves.
True False
18 When a new partner is admitted to a partnership, all partnership assets should be revised to reflect current prices.
True False
19 The partner capital accounts may change due to capital additions, net income, or withdrawals.
True False
20 The financial loss that each stockholder in a corporation can incur is usually limited to the amount invested by the stockholder.
True False
21 The balance in Retained Earnings at the end of the period is created by closing entries.
True False
22 When a corporation issues stock at a premium, it reports the premium as another income item on the income statement.
True False
23 A large retained earnings account means that there is cash available to pay dividends.
True False
24 When the board of director's declares a cash dividend, this action causes the corporation to incur a liability to pay the amount of the dividend.
True False
25 Bonds of major corporations are traded on bond exchanges.
True False
26 If the bondholder has the right to exchange a bond for shares of common stock, the bond is called a convertible bond.
True False
27 The face value of a term bond is payable at a single specific date in the future.
True False
28 When a corporation issues bonds, it executes a contract with the bondholders, known as a bond debenture.
True False
29 The times interest earned ratio (also referred to as the number of times interest charges are earned) is calculated by dividing Bonds Payable by Interest Expense.
True False
31 Under a perpetual inventory system, the amount of each type of merchandise on hand is available in the
customer's ledger creditor's ledger inventory ledger merchandise inventory account in the general ledger
32 Taking a physical count of inventory
is not necessary when a periodic inventory system is used
should be done near year-end
has not internal control relevance
is not necessary when a perpetual inventory system is used
33 Under the _________ inventory method, accounting records maintain a continuously updated inventory value.
retail periodic physical perpetual
34 The method of computing inventory that uses records of the selling prices of the merchandise is called
retail method last-in, first-out first-in, first-out average cost
35 Expenditures that add to the usefulness of fixed assets for more than one accounting period are
committed expenditures revenue expenditures current expenditures capital expenditures
36 A capital expenditure results in a debit to
an expense account a capital account a liability account an asset account
37 All of the following below are needed for the calculation of straight-line depreciation except
cost
residual value estimated life units produced
38 Payroll journal entries are made with data from the
wage and tax statement employee's earnings record employer's quarterly federal tax return payroll register
39 Which of the following forms is typically given to employees at the end of the calendar year so that employees can file their individual income tax forms?
Employment Withholding Allowance Certificate (W-4)
Wage and Tax Statement (Form W-2)
Employer's Quarterly Federal Tax Return (Form 941)
Employer’s Annual Federal Unemployment Tax Return (Form 940)
40 A pension plan which requires the employer to make annual pension contributions, with no promise to employees regarding future pension payments, is termed
funded unfunded defined benefit defined contribution
41 A pension plan which promises employees a fixed annual pension benefit, based on years of service and compensation, is called a(n)
defined contribution plan defined benefit plan unfunded plan funded plan
42 The remaining cash of a partnership (after creditors have been paid) upon liquidation is divided among partners according to their
capital balances contribution of assets drawing balances income sharing ratio
43 Paul and Roger are partners who share income in the ratio of 3:2. Their capital balances are $90,000 and $130,000 respectively. Income Summary has a credit balance of $50,000. What is Roger’s capital balance after closing Income Summary to Capital?
$155,000 $150,000 $110,000 $115,000
44 In which section of the financial statements would Paid-In Capital from Sale of Treasury Stock be reported? other expense on the income statement
intangible assets on the balance sheet
stockholders' equity on the balance sheet
other income on the income statement
45 Which of the following is not classified as paid-in capital on the balance sheet?
common stock common stock distributable donated capital treasury stock
46 Significant changes to stockholders’ equity are reported in
the income statement the retained earnings statement the statement of stockholders' equity the statement of cash flows
47 If $1,000,000 of 8% bonds are issued at 105, the amount of cash received from the sale is
$1,080,000 $950,000 $1,000,000 $1,050,000
48 If bonds are issued at a discount, it means that the
bondholder will receive effectively less interest than the contractual rate of interest
market interest rate is lower than the contractual interest rate
market interest rate is higher than the contractual interest rate
financial strength of the issuer is suspect
49 Sinking Fund Investments would be classified on the balance sheet as
a current asset a fixed asset an investment a deferred debit
50 Sinking Fund Income is reported in the income statement as
income from operations extraordinary gain on sinking fund transactions other income
File name: 50 accounting questions.doc File type: doc PRICE: $25
