20 MCQ's

4. Regarding the contracts in consideration of marriage provision of the Statute of Frauds, which of the following statements is true?
A The Statute of Frauds applies to any agreement made on consideration of marriage, except mutual promises to marry. 
B The Statute of Frauds does not apply to a promise made by a third party in consideration of two other persons.
C The Statute of Frauds applies if the promise is made merely in contemplation of marriage.
D This Statute of Frauds does not apply to a promise to support the child of the prospective spouse.

 
2. Which of the following is a well-recognized exception to the suretyship contracts covered by the Statute of Frauds?
A The main purpose rule.
B The joint obligor rule.
C The principal-surety rule.
D The special promise rule.

3. Based upon your reading of the Potter v Hatter Farms, Inc. case, which statement was not true regarding the applicability of the doctrine of promissory estoppel?
A Every contract or duty within the Uniform Commercial Code imposes an obligation of good faith.
B The elements of promissory estoppel are actual reliance, definite and substantial change of position and foreseeability to the promissory, as a reasonable person, that the promise would induce conduct of the kind that occurred.
C Promissory estoppel was displaced by UCC 2-201 because this doctrine was not expressly mentioned in that statute.
D Substantial evidence to satisfy the requirements of promissory estoppel was present.

 4. Which of the following statements about a promise by an executor or administrator is not true?
A  A promise by an administrator or executor to pay a claim out of the assets of the decedent’s estate is within the Statute of Frauds.
B The term "within the Statute of Frauds" means that the Statute of Frauds requires a record for this kind of transaction.
C An executor or administrator can promise to pay a debt of an estate from his own funds.
D A promise by an administrator or executor to pay a claim out his own personal funds is within the Statute of Frauds.

1. Accountants refer to an economic event as a
a. purchase.
b. sale.
c. transaction.
d. change in ownership.

2. The use of computers in recording business events
a. has made the recording process more efficient.
b. does not use the same principles as manual accounting systems.
c. has greatly impacted the identification stage of the accounting process.
d. is economical only for large businesses.

3. Which of the following is an external user of accounting information?
a. Labor unions
b. Finance directors
c. Company officers
d. Managers

4. The origins of accounting are generally attributed to the work of
a. Christopher Columbus.
b. Abner Doubleday.
c. Luca Pacioli.
d. Leonardo da Vinci.

1. Generally accepted accounting principles are a. income tax regulations of the Internal
a. 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.

2. Which one of the following is not a part of an account?
a. Credit side
b. Trial balance
c. Debit side
d. Title

3. 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.

4. A debit to an asset account indicates a
a. an error.
 b. a credit was made to a liability account.
c. a decrease in the asset.
d. an increase in the asset.

1. 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.

2. The double-entry system requires that each transaction must be recorded
a. in at least two different accounts.
b. in two sets of books.
c. in a journal and in a ledger.
d. first as a revenue and then as an expense.

3. 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.

4. Management usually desires ________ financial statements and the IRS requires all businesses to file _________ tax returns.
a. annual, annual
b. monthly, annual
c. quarterly, monthly
d. monthly, monthly

1. Which of the following time periods would not be referred to as an interim period?
a. Monthly
b. Quarterly
c. Semi-annually
d. Annually

2. Which of the following are in accordance with generally accepted accounting principles?
a. Accrual basis accounting
b. Cash basis accounting
c. Both accrual basis and cash basis accounting
d. Neither accrual basis nor cash basis accounting 1

3. The matching principle states that expenses should be matched with revenues. Another way of stating the principle is to say that
a. assets should be matched with liabilities.
b. efforts should be matched with accomplishments.
c. dividends to stockholders should be matched with stockholders' investments.
d. cash payments should be matched with cash receipts.

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