Acct Quiz

1 of 50

Sarbanes-Oxley was passed in response to which of the following?

[removed]	The .com implosion
[removed]	The savings and loan bailout
[removed]	The implosion of WorldCom and Enron
[removed]	None of the above

Question

2 of 50

Which of the following describes the internal control component "monitoring of controls"?

[removed]	Internal auditors monitor company controls to safeguard assets, and external auditors evaluate the controls to ensure that the accounting records are accurate.
[removed]	Monitoring of controls is the "tone at the top" of the business.
[removed]	Monitoring of controls is designed to ensure that the business's goals are achieved.
[removed]	A company must identify its risks.

Question

3 of 50

Which of the following is a security procedure designed for e-commerce?

[removed]	Burglar alarms
[removed]	Firewalls
[removed]	Fireproof vaults
[removed]	None of the above

Question

4 of 50

Case 8.5

At December 31, 2008, McGovern Company overstated ending inventory by $50,000.

Refer to Case 8.5. How does this error affect cost of goods sold for 2008?

[removed]	Has no effect on Cost of Goods Sold
[removed]	Overstates Cost of Goods Sold by $50,000
[removed]	Understates Cost of Goods Sold by $50,000
[removed]	None of the above

Question

5 of 50

Gilkey Construction Company writes of the account of Arthur Blanks of $78,000. The journal entry to record this under the direct write off method is:

A)	Bad Debts Expense	78,000
	Accounts Receivable - Arthur Blanks		78,000
B)	Allowance for doubtful accounts	78,000
	Bad Debts Expense		78,000
C)	Allowance for doubtful accounts	78,000
	Accounts Receivable - Arthur Blanks		78,000
D)	Accounts Receivable - Arthur Blanks	78,000
	Allowance for doubtful accounts		78,000

[removed]	A)
[removed]	B)
[removed]	C)
[removed]	D)

Question

6 of 50

Refer to Case 7.11. What is the quick ratio for 2004?

[removed]	.75
[removed]	1.0
[removed]	.61
[removed]	.70

Question

7 of 50

Which of the following is the last step in the daily control over cash receipts by mail?

[removed]	A mailroom employee sends all customer checks to the treasurer who has the cashier make the bank deposit.
[removed]	A mailroom clerk opens the mail and sends the remittance advices to the accounting department.
[removed]	The controller compares the records of the day's bank deposit amount from the treasurer and the debit to Cash from the accounting department.
[removed]	The accounting department prepares journal entries to Cash and the customers' accounts.

Question

8 of 50

Case 7.4

Gilkey Security Systems has the following for year ended 12-31-09 before adjustments

Accounts receivable	$130,000
Net Credit Sales	$840,000
Allowance for doubtful accounts	$3,000 debit balance
Aging of accounts receivable	$19,000

Refer to Case 7.4. The balance in the allowance for doubtful accounts after the adjustment is:

[removed]	$22,000.
[removed]	$19,000.
[removed]	$28,200.
[removed]	$84,000.

Question

9 of 50

An electronic fund transfer (EFT) for payment of a bill would be:

[removed]	subtracted from the bank balance of a bank reconciliation.
[removed]	added to the book balance of a bank reconciliation.
[removed]	added to the bank balance of a bank reconciliation.
[removed]	subtracted from the book balance of a bank reconciliation.

Question

10 of 50

Case 8.1

Emerson Electronics had the following information related to its September inventory.

		Number of Units	Cost
Sept. 1	Beginning Inventory	100 Units	$10
5	Purchase	200 Units	$11
15	Sold	150 Units
26	Purchase	100 Units	$12
30	Sold	200 Units

Sales were made at $20 per unit and Emerson uses the perpetual inventory system.

Refer to Case 8.1. The value of cost of goods sold under LIFO would be:

[removed]	$3,900.
[removed]	$4,200.
[removed]	$4,000.
[removed]	$3,800.

Question

11 of 50

For good internal control, the credit department should have no access to:

[removed]	customer information.
[removed]	customer credit applications.
[removed]	computer systems.
[removed]	cash.

Question

12 of 50

Accounts receivable minus the allowance for doubtful accounts equals:

[removed]	net realizable value of accounts receivable.
[removed]	market value of accounts receivable.
[removed]	book value of accounts receivable.
[removed]	historical costs of accounts receivable.

Question

13 of 50

By law, the provisions of Sarbanes-Oxley apply to:

[removed]	all companies
[removed]	private companies
[removed]	public companies
[removed]	public companies with sales greater than one billion dollars

Question

14 of 50

Case 8.5

At December 31, 2008, McGovern Company overstated ending inventory by $50,000.

Refer to Case 8.5. How does this error affect net income for 2009?

[removed]	Has no effect on Net Income
[removed]	Overstates Net Income by $50,000
[removed]	Understates Net Income by $50,000
[removed]	None of the above

Question

15 of 50

Rising interest rates, gas prices, declining profits and strong competition in the auto industry all would be factors impacting the __________ of General Motors.

[removed]	control environment
[removed]	segregation of duties
[removed]	control activities
[removed]	risk assessment

Question

16 of 50

Non sufficient funds (NSF) checks would be:

[removed]	subtracted from the book balance of a bank reconciliation.
[removed]	subtracted from the bank balance of a bank reconciliation.
[removed]	added to the bank balance of a bank reconciliation.
[removed]	added to the book balance of a bank reconciliation.

Question

17 of 50

Case 7.5

Gilkey Security Systems has the following for year ended 12-31-09 before adjustments

Accounts receivable	$130,000
Net Credit Sales	$840,000
Allowance for doubtful accounts	$3,000 debit balance
Aging of accounts receivable	$19,000

Gilkey uses the aging method of estimating bad debt expense.

Refer to Case 7.5. The journal entry for estimating bad debt expense at year end is:

A)	Allowance for doubtful accounts	19,000
	Accounts Receivable		19,000
B)	Bad Debts Expense	22,000
	Allowance for doubtful accounts		22,000
C)	Bad Debts Expense	19,000
	Allowance for doubtful accounts		19,000
D)	Allowance for doubtful accounts	22,000
	Bad Debts Expense		22,000

[removed]	A)
[removed]	B)
[removed]	C)
[removed]	D)

Question

18 of 50

Open promises to pay by customers are called:

[removed]	notes receivable.
[removed]	other receivables.
[removed]	accounts receivable.
[removed]	none of the above.

Question

19 of 50

Which of the following is a control over petty cash?

[removed]	Support all fund payments with a petty cash ticket.
[removed]	Keep a specific amount of cash on hand in the fund.
[removed]	Designate a custodian of the petty cash fund.
[removed]	All of the above are controls.

Question

20 of 50

Which of the following is a requirement of the Sarbanes-Oxley Act?

[removed]	The outside auditor must issue an internal control report for each public company, and the Public Company Oversight Board evaluates the client's internal controls
[removed]	The Public Company Oversight Board issues an internal control audit report for every publicly held company.
[removed]	Accounting firms may not both audit a public client and also provide certain consulting services for the same client
[removed]	Public companies oversee the work of auditors of other public companies.

Question

21 of 50

Case 7.2

Oddessy consulting has the following for year ended 12-31-09 before adjustments

Accounts receivable	$330,000
Net Credit Sales	$1,200,000
Allowance for doubtful accounts	$4,700 credit balance
Estimated percentage of Bad debts on credit sales	2%

Oddessy uses the net credit sales method of estimating bad debt expense.

Refer to Case 7.2. The journal entry for estimating bad debt expense at year end is:

A)	Allowance for doubtful accounts	24,000
	Accounts Receivable		24,000
B)	Allowance for doubtful accounts	28,700
	Bad Debts Expense		28,700
C)	Bad Debts Expense	28,700
	Allowance for doubtful accounts		28,700
D)	Bad Debts Expense	24,000
	Allowance for doubtful accounts		24,000

[removed]	A)
[removed]	B)
[removed]	C)
[removed]	D)

Question

22 of 50

Which cost would be part of the cost of land?

[removed]	Putting up fencing around a building
[removed]	Removing an old building from the land
[removed]	Installing lights in a parking lot
[removed]	Installing a sprinkler system

Question

23 of 50

In dealing with cash receipts, the amount debited to cash should equal:

[removed]	the amount of the deposit
[removed]	the amount of total sales
[removed]	the amount of cash sales
[removed]	some other amount

Question

24 of 50

Chase Bank loans P+P Company $120,000 on a 1 year promissory note on July 1, 2009. The interest rate of this loan is 12%. The principle and interest are due in one year. The journal entry to accrue interest earned on12-31-09 is:

A)	Cash	7,200
	Interest revenue		7,200
B)	Cash	14,400
	Interest revenue		14,400
C)	Interest receivable	7,200
	Interest Revenue		7,200
D)	Interest Receivable	14,400
	Interest Revenue		14,400

[removed]	A)
[removed]	B)
[removed]	C)
[removed]	D)

Question

25 of 50

Case 8.1

Emerson Electronics had the following information related to its September inventory.

		Number of Units	Cost
Sept. 1	Beginning Inventory	100 Units	$10
5	Purchase	200 Units	$11
15	Sold	150 Units
26	Purchase	100 Units	$12
30	Sold	200 Units

Sales were made at $20 per unit and Emerson uses the perpetual inventory system.

Refer to Case 8.1. The value of ending inventory under FIFO would be:

[removed]	$700.
[removed]	$600.
[removed]	$500.
[removed]	$550.

Question

26 of 50

In a $500 imprest petty cash fund:

[removed]	the currency minus coins plus tickets should equal $500.
[removed]	the currency minus coins minus tickets should equal $500.
[removed]	the currency plus coins plus tickets should equal $500.
[removed]	the currency plus coins minus tickets should equal $500.

Question

27 of 50

Case 8.2

Emerson Electronics had the following information related to its September inventory.

		Number of Units	Cost
Sept. 1	Beginning Inventory	200 Units	$10
6	Purchase	200 Units	$12
16	Sold	250 Units
27	Purchase	200 Units	$14
30	Sold	300 Units

Sales were made at $15 per unit and Emerson uses the perpetual inventory system.

Refer to Case 8.2. Gross profit would be how much under FIFO?

[removed]	$8,250
[removed]	$1,550
[removed]	$1,950
[removed]	$1,750

Question

28 of 50

Which of the following demonstrates internal control over cash receipts?

[removed]	A mailroom employee deposits all customer checks at the bank.
[removed]	A mailroom employee sends remittance advices to the treasurer
[removed]	A mailroom employee sends all customer checks to the treasurer who has the cashier make the bank deposit
[removed]	All of the above demonstrate internal control over cash receipts

Question

29 of 50

A written promise to pay a specified amount of money at a particular future date by a customer is a(n):

[removed]	accounts receivable.
[removed]	mortgage payable.
[removed]	notes payable.
[removed]	notes receivable.

Question

30 of 50

Case 8.2

Emerson Electronics had the following information related to its September inventory.

		Number of Units	Cost
Sept. 1	Beginning Inventory	200 Units	$10
6	Purchase	200 Units	$12
16	Sold	250 Units
27	Purchase	200 Units	$14
30	Sold	300 Units

Sales were made at $15 per unit and Emerson uses the perpetual inventory system.

Refer to Case 8.2. Gross profit would be how much under LIFO?

[removed]	$1,950
[removed]	$8,250
[removed]	$1,550
[removed]	$1,750

Question

31 of 50

Which of the following describes the internal control component "control procedures"?

[removed]	A company must identify its risks.
[removed]	Internal auditors monitor company controls to safeguard assets, and external auditors monitor the controls to ensure that the accounting records are accurate.
[removed]	Control procedures are the "tone at the top" of the business.
[removed]	Control procedures are designed to ensure that the business's goals are achieved.

Question

32 of 50

Mary is a warehouse worker who fills orders for shipment, receives new shipments of inventory in the warehouse and also records all inventory transactions into the accounting records. Mary is violating which of the following?

[removed]	Independent checks
[removed]	Physical safe guards
[removed]	Segregation of duties
[removed]	None of the above

Question

33 of 50

A(n) __________ is an internal control tool that reconciles the differences between a depositor's cash records and the depositor's cash balance in its bank account.

[removed]	checking account
[removed]	bank statement
[removed]	bank reconciliation
[removed]	imprest petty cash fund

Question

34 of 50

The direct write off method of accounting for bad debts violates which of the following accounting principles?

[removed]	Entity concept
[removed]	Going concern
[removed]	Historical cost
[removed]	Matching principle

Question

35 of 50

The intentional misrepresentation of financial information on the financial statements is called:

[removed]	lack of internal controls.
[removed]	theft.
[removed]	fraudulent financial reporting.
[removed]	employee fraud.

Question

36 of 50

Case 8.1

Emerson Electronics had the following information related to its September inventory.

		Number of Units	Cost
Sept. 1	Beginning Inventory	100 Units	$10
5	Purchase	200 Units	$11
15	Sold	150 Units
26	Purchase	100 Units	$12
30	Sold	200 Units

Sales were made at $20 per unit and Emerson uses the perpetual inventory system.

Refer to Case 8.1. The value of cost of goods sold under FIFO would be:

[removed]	$2,800.
[removed]	$3,100.
[removed]	$2,900.
[removed]	$3,800.

Question

37 of 50

Case 8.6

At December 31, 2008, McGovern Company understated ending inventory by $50,000.

Refer to Case 8.6. How does this error affect net income for 2008?

[removed]	Understates Net Income by $50,000
[removed]	Overstates Net Income by $50,000
[removed]	Has no effect on Net Income
[removed]	None of the above

Question

38 of 50

The journal entry to set up a $500 imprest petty cash fund would be:

A)	Miscellaneous Expense	500
	Cash in bank		500
B)	Cash in bank	500
	Petty Cash		500
C)	Petty Cash	500
	Cash in bank		500
D)	Accounts Receivable	500
	Cash in bank		500

[removed]	A)
[removed]	B)
[removed]	C)
[removed]	D)

Question

39 of 50

Which of the following is the first step in the purchasing and payment process?

[removed]	The supplier ships the goods and sends an invoice to the purchaser.
[removed]	The purchaser sends a check to the supplier.
[removed]	The purchaser sends a purchase order to the supplier.
[removed]	The purchase receives the inventory and prepares a receiving report.

Question

40 of 50

Which inventory method would use the most current costs to determine costs of goods sold?

[removed]	LIFO
[removed]	Specific Identification
[removed]	Weighted average
[removed]	FIFO

Question

41 of 50

Which of the following is considered a long term asset?

[removed]	Inventory
[removed]	Accounts receivable
[removed]	Land
[removed]	Cash

Question

42 of 50

Which of the following is NOT one of the components of internal control?

[removed]	Control procedures
[removed]	Risk assessment
[removed]	Theft management
[removed]	Control environment

Question

43 of 50

With good internal controls, the person who handles cash can also:

[removed]	issue credits to customers for merchandise returned to us.
[removed]	account for cash receipts from customers.
[removed]	account for cash payments.
[removed]	do none of the above.

Question

44 of 50

Which inventory method would use the oldest costs to value ending inventory?

[removed]	LIFO
[removed]	Weighted average
[removed]	Specific Identification
[removed]	FIFO

Question

45 of 50

Which of the following describes the internal control component "control environment"?

[removed]	Internal auditors monitor company controls to safeguard assets, and external auditors monitor the controls to ensure that the accounting records are accurate.
[removed]	The control environment is the "tone at the top" of the business.
[removed]	The control environment is designed to ensure that the business's goals are achieved
[removed]	A company must identify its risks.

Question

46 of 50

Case 8.4

Emerson Electronics had the following information related to its September inventory.

		Number of Units	Cost
Sept. 1	Beginning Inventory	200 Units	$10
8	Purchase	200 Units	$12
29	Sold	200 Units	$14

200 units were sold @ $15 per unit and Emerson uses the perpetual inventory system.

Refer to Case 8.4. Emerson has how many units in Ending Inventory?

[removed]	200 units
[removed]	50 units
[removed]	100 units
[removed]	300 units

Question

47 of 50

Case 7.6

Chase Bank loans P+P Company $120,000 on a 1 year promissory note on January 1, 2009. The interest rate of this loan is 12%. The principle and interest are due on 12-31-2009.

Refer to Case 7.6. The amount of interest revenue that Chase will earn on this loan is:

[removed]	$1,200.
[removed]	$120,000.
[removed]	$14,400.
[removed]	$1,000.

Question

48 of 50

Which of the following is TRUE of internal control?

[removed]	A company's outside auditor is responsible for the company's internal control system.
[removed]	One of the major purposes of internal control is to ensure accurate, reliable accounting records.
[removed]	Internal control procedures tend to diminish the importance of operational efficiency.
[removed]	Public companies generally had no internal control systems prior to the enactment of the Sarbanes-Oxley Act

Question

49 of 50

Case 9.3

Leah, Inc. has machinery with a cost of $100,000. The machinery has an estimated useful life of 10 years, and an estimated salvage value of $10,000. The machinery is expected to be able to produce a total of 1,000,000 units during its estimated life.

Refer to Case 9.3. The amount of deprecation expense in the second year under straight line depreciation would be:

[removed]	$1,000.
[removed]	$10,000.
[removed]	$9,000.
[removed]	$5,000.

Question

50 of 50

Inventory should be shown on the balance sheet at:

[removed]	market value.
[removed]	cost.
[removed]	the higher of cost or market value.
[removed]	the lower of cost or market value.

12 years ago

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