ACC 300 Questions

1) Which of the following statements is true?

2) Notes to the financial statements include which of the following:

3) Which of the following financial statements is divided into major categories of operating, investing, and financing activities?

4) If the retained earnings account increases from the beginning of the year to the end of the year, then

5) If services are rendered on account, then

6) An investment by the stockholders in a business increases

7) Using accrual accounting, expenses are recorded and reported only:

8) A small company may be able to justify using a cash basis of accounting if they have:

9) Stockholders’ equity can be described as claims of

10) Common stock is reported on the

11) The Vintage Laundry Company purchased $6,500 worth of laundry supplies on June 2 and recorded the purchase as an asset. On June 30, an inventory of the laundry supplies indicated only $2,000 on hand. The adjusting entry that should be made by the company on June 30 is:

12) On July 1 the Fisher Shoe Store paid $15,000 to Acme Realty for 6 months rent beginning July 1. Prepaid Rent was debited for the full amount. If financial statements are prepared on July 31, the adjusting entry to be made by the Fisher Shoe Store is:

13) Use the following data to determine the total dollar amount of assets to be classified as current assets.
Koonce Office Supplies
Balance Sheet
December 31, 2012

14) Use the following data to calculate the current ratio.
Koonce Office Supplies
Balance Sheet
December 31, 2012

15) In horizontal analysis, each item is expressed as a percentage of the

16) When a change in depreciation method occurs:

17) Which of the following statements is true with respect to financial statement reporting for all cases when a company changes from one acceptable accounting method to another?

18) Which of the following would be considered a change in accounting principle?

19) From an internal control standpoint, the asset most susceptible to improper diversion and use is

20) A very small company would have the most difficulty in implementing which of the following internal control activities?

21) The reconciliation of the cash register tape with the cash in the register is an example of

22) Deposits in transit

23) Which of the following items on a bank reconciliation would require an adjusting entry on the company’s books?

24) Notification by the bank that a deposited customer check was returned NSF requires that the company make the following adjusting entry:

25) Why do pension and mutual funds invest in debt and equity securities?

26) Which of the following is a debt security?

27) Reed Company acquires 80 Holmes 10%, 5 year, $1,000 bonds on January 1, 2012 for $82,000. This includes a brokerage commission of $2,000. The journal entry to record this investment includes a debit to

28) Reed Company acquires 80 Holmes 10%, 5 year, $1,000 bonds on January 1, 2012 for $82,000. This includes a brokerage commission of $2,000. Assume Holmes pays interest semiannually and the July 1 entry was done correctly. The journal entry at December 31, 2012 would include a credit to

29) A company that owns more than 50% of the common stock of another company is known as the

30) If a parent company has two wholly owned subsidiaries, how many legal and economic entities are there from the viewpoint of the shareholders of the parent company?