Devry Cincinnati ACCT 212 Exam Part 1

1. Which of the following persons or groups have the ultimate control of a corporation?
         
the chief executive officer     
         
the chief operating officer     
         
the audit committee     
         
the stockholders     
 
2. Financial statements are
          
reports issued by outside consultants who are hired to analyze key operations of the business.     
         
reports created by management that states it is responsible for the acts of the corporation.     
         
standard documents that tell us how well a business is performing and where it stands in financial terms.     
         
standard documents issued by outside consultants who are hired to analyze key operations of the business in financial terms.     
 
3. All of the following are forms of business organizations except:
           
proprietorship.    
         
partnership.    
         
restaurant.    
         
corporation.    
 
4.The largest organization of professional accountants in the United States is the:
           
American Institute of Certified Public Accountants.      
         
Securities and Exchange Commission.     
         
Financial Accounting Standards Board.    
         
Auditing Standards Board.     
 
5. The Financial Accounting Standards Board is responsible for establishing:
           
the American Institute of Certified Public Accountants.     
         
the Securities and Exchange Commission.     
         
generally accepted accounting principles.     
         
the code of professional conduct for accountants.     
  
6. The principle which states that assets acquired by the business should be recorded at their actual price is the:
           
objectivity principle.     
         
stable dollar principle.     
         
cost principle.     
         
reliability principle.     
 
 
7. The accounting equation can be stated as:
           
Assets + Liabilities = Stockholders' equity.     
         
Assets = Liabilities + Stockholders' equity.     
         
Assets = Liabilities - Stockholders' equity.     
         
Assets + Stockholders' equity = Liabilities.     
 
8. The owners' interest in the assets of a corporation is known as:
           
assets.    
         
stockholders' equity.     
         
expenses.     
         
revenues.    
  
9. Which of the following financial statements would a potential investor most likely use to evaluate a company's financial performance for the current period?
           
balance sheet     
         
income statement      
         
statement of cash flows     
         
retained earnings statement     
 
10. Assets appear on the:
           
balance sheet.     
         
income statement.     
         
retained earnings statement.     
         
statement of cash flows.     
 
11. Dividends appear on the:
           
retained earnings statement.     
         
income statement.     
         
balance sheet    
         
both the retained earnings statement and the income statement.     
  
12. The statement of cash flows is divided into three categories relating to cash flows from operating, investing, and:
           
management planning activities.     
         
financing activities.     
         
strategic positioning activities.     
         
marketing activities.     
  

13. Gains and losses appear on which of the financial statements listed below?
         
the balance sheet     
         
the income statement     
         
the retained earnings statement     
         
the statement of cash flows     

14. Cash spent to purchase new equipment would appear on the statement of cash flows as:
         
a financing activity.     
         
an operating activity.     
         
an investing activity.     
         
purchases of new equipment do not appear on a statement of cash flows.     
 
15. Which financial statement is based on the accounting equation?
         
statement of retained earnings     
         
income statement     
         
statement of cash flows     
         
balance sheet     

1.  Accounts are grouped together in a book called the:
         
ledger.     
         
trial balance    
         
journal.    
         
accounting equation.     
 
2. The normal balance of an expense account is a __________ while the normal balance of a revenue account is a __________.
           
debit, debit     
         
credit, credit     
         
credit, debit     
         
debit, credit     
  
3. Accounting transactions are first recorded in a book or record called a:
           
file.    
         
ledger.    
         
journal.    
         
source document    
  

4. What is the first step in the journalizing process?
           
Enter the transaction in the journal.     
         
Arrange data in chronological order.     
         
Determine what accounts will be affected and whether to debit or credit them.     
         
Post the transaction to the ledger.     
 
5. The normal balance of Accounts Receivable is a __________ because it is a(n) __________ account.
           
credit, liability     
         
debit, expense     
         
credit, stockholders' equity     
         
debit, asset     
 
6. Posting, a part of the accounting process, refers to:
           
copying amounts from the accounts in the general ledger to the journal.     
         
copying amounts from the financial statements to the general ledger.     
         
copying amounts from the journal to the appropriate accounts in the general ledger.     
         
copying amounts from the general ledger to the financial statements.     
 
7. A chart of accounts is:
           
a list of all accounts.     
         
a list of all balance sheet accounts.     
         
a list of all income statement accounts.     
         
a list of all accounts with their ending balances.     
 
8. On December 1, 2003, Blue Mountain Snow Removal Service receives $1,800 in advance for an agreement to remove snow from a client's parking lot during the months of December, January, and February. As of December 31, 2003, Blue Mountain Snow Removal Service:
           
would have a $1,200 liability to its client under accrual accounting, and would have a $1,800 liability to its client under cash-basis accounting.     
         
would have recognized $600 revenue under accrual accounting, and would have recognized $1,800 revenue under cash-basis accounting.      
         
would have a $0 liability to its client under accrual accounting, and would have a $1,200 liability to its client under cash-basis accounting.     
         
would have recognized $600 cash under accrual accounting, and would have recognized 1,800 cash under cash-basis accounting.     
 

9. An accrual refers to an event:
           
where the cash has not been exchanged between the two parties.     
         
that will never involve an income statement account.     
         
that will never involve cash.     
         
where the cash has already exchanged hands between the two parties.     
  
10. A deferral refers to an event:
           
where the recognition of an expense or revenue is recorded before the cash is paid or received.     
         
where the liability for an expense is recorded after the expense is actually incurred.     
         
where the liability for an expense is recorded before the expense is actually incurred.     
         
where the recognition of an expense or revenue is recorded after the cash is paid or received.     

11. The accounting principle which tells accountants when to record revenue and in what amount is called the:
           
matching principle    
         
revenue principle.     
         
full disclosure principle.     
         
going concern principle.     
 
12. The accounting principle which serves as the basis for determining when to record expenses is the:
           
going concern principle.     
         
revenue principle.     
         
full disclosure principle.     
         
matching principle.     
  
13. Adjusting entries:
           
are prepared at the option of the accountant.     
         
are not needed under the accrual basis of accounting.     
         
are prepared at the beginning of the accounting period to update all accounts.     
         
are prepared at the end of the accounting period to update certain accounts.      
 
14. Book value is defined as:
  Your :
         
depreciation expense plus accumulated depreciation.     
         
the cost of a plant asset less depreciation expense.     
         
the cost of a plant asset less accumulated depreciation.     
         
the cost of a plant asset plus accumulated depreciation.     
  
15. In what order are financial statements generally prepared?
           
balance sheet, statement of retained earnings, and income statement     
         
income statement, statement of retained earnings, and balance sheet     
         
income statement, balance sheet, and statement of retained earnings     
         
statement of retained earnings, income statement, and balance sheet