Multiple choice

1.  Cash collected from the customers before goods are delivered is known as_____. 

a. unearned revenue 

b. deferred revenue 

c. advances from customers 

d. all of these answers are correct 

2. The _____ is (are) largely responsible for developing generally accepted accounting principles in the United States. 

a. FASB 

b. IASC 

c. SEC 

d. FASB and IASC 

3. The _____ would result in an increase in income under the cash basis but not an increase in income under the accrual basis. 

a. credit sale of inventory at a sales price in excess of the inventory's cost 

b. cash collection from a credit customer 

c. cash sale of inventory at a sales price in excess of the inventory's cost 

d. return of defective inventory purchased on account to a supplier where a full credit was given 

4._____ is reported on the financial statements of publicly held companies in the 

United States. 

a. The current ratio 

b. Earnings per share 

c. The price-earnings ratio 

d. All of these answers are correct