ACC561 Week 1 Quiz
Abhishek JainUniversity of Phoenix, Northern Virginia Campus
ACC 561 Accounting Course
Quiz 2 (Chapters 15-16)
Facilitator: Randolph A. Stanley
Student Name:___________________________
Grade:__________________________________
Instructions: Please answer all questions. Each question worth 1point for a total of 25points. You must only select one answer for each question.
1. Any event that affects the financial position of an organization and requires recording is called a(n)_____.
a. transaction
b. account
c. posting
d. accounting change
2. The _____ is also called the statement of financial position.
a. income statement
b. balance sheet
c. statement of retained earnings
d. statement of cash flows
3. _____ is (are) economic resources that are expected to benefit future activities.
a. Stockholders’ equity
b. Liabilities
c. Assets
d. Retained earnings
4. For a corporation, the excess of the assets over the liabilities is called _____.
a. retained earnings
b. paid-in capital
c. common stock
d. owners’ equity
5. The entity’s economic obligations to nonowners is(are) called _____.
a. owners’ equity
b. liabilities
c. assets
d. retained earnings
6. The _____ discloses the economic resources of the organization and the claims against those resources.
a. balance sheet
b. income statement
c. statement of cash flows
d. statement of retained earnings
7. _____ are sections of the balance sheet.
a. Revenues, assets, and liabilities
b. Assets, liabilities, and expenses
c. Expenses, revenues, and owners’ equity
d. Assets, liabilities, and owners’ equity
8. Identify which one of the following statements is false .
a. Owners’ equity solely represents the profits made by an organization in the current period.
b. Assets are economic resources that are expected to benefit future cash inflows or reduce future cash outflows.
c. Liabilities are economic obligations or claims against the assets of an organization by outsiders.
d. Assets must always equal the sum of liabilities and owners’ equity.
9. The following information was extracted from the accounting records of Ernest Company:
Beginning Paid-In Capital $90,000
Beginning Retained Earnings $210,000
Beginning Assets $455,000
During the period assets increased by $150,000, revenues were $200,000, and expenses were $165,000. The owners made no additional investments.
The amount of Ernest Company’s liabilities at the beginning of the period is _____.
a. $545,000
b. $155,000
c. $300,000
d. $245,000
10. The following information was extracted from the accounting records of Plum Company:
Beginning Paid-In Capital $87,000
Beginning Retained Earnings $211,000
Beginning Assets $455,000
During the period assets increased by $150,000, revenues were $200,000, and expenses were $165,000. The owners made no additional investments.
The amount of Plum Company’s liabilities at the end of the period is _____.
a. $157,000
b. $272,000
c. $150,000
d. $ 45,000
11. The _____ adjusting entry increases owners’ equity and decreases liabilities.
a. depreciation
b. wages
c. deferred revenue
d. unrecorded revenue
12. Unexpired costs are considered_____.
a. assets
b. expenses, if cash has been paid
c. expenses, whether or not cash has been paid
d. adjusted expenses
13. Research and development costs are initially _____.
a. recorded as assets, and written off in a systematic way over a period of years
b. recorded as assets, and are expensed when the goods produced are sold
c. recorded as assets, and are expensed when they are paid in cash
d. expensed
14. Depreciation is computed on_____.
a. equipment and land
b. land and buildings
c. equipment and buildings
d. equipment, land, and buildings
15. 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
16. Current assets are converted to cash or sold or consumed within _____.
a. the longer of one year or one operating cycle
b. the shorter of one year or one operating cycle
c. one fiscal year or one calendar year
d. one calendar year
17. _____ is not a current asset.
a. Accounts Receivable
b. Goodwill
c. Prepaid Expenses
d. None of these answers is correct
18. _____ is not considered in the determination of the operating cycle.
a. Accounts Receivable
b. Merchandise Inventory
c. Cash
d. None of these answers is correct
19. A _____ is not considered a cash equivalent.
a. money market fund
b. treasury bill
c. bank account
d. none of these answers is correct
20. Depreciation is used to _____.
a. establish the current market value of an asset
b. allocate the original cost of an asset to particular periods or products
c. accumulate funds to replace an asset
d. all of these answers are correct
21. The liabilities of Sam Company are listed below:
Accounts payable $20,000
First Mortgage bonds payable $100,000
Debentures payable $80,000
Sam Company liquidated its assets, receiving $140,000 cash. The debenture holders will receive _____ if the debentures are subordinated.
a. $10,000
b. $20,000
c. $40,000
d. $60,000
22. The liabilities of Becky Company are listed below:
Accounts payable $20,000
First Mortgage bonds payable $100,000
Debentures payable $80,000
Becky Company liquidated its assets, receiving $150,000 cash. The debenture holders will receive _____ if the debentures are unsubordinated.
a. $10,000
b. $30,000
c. $40,000
d. $50,000
23. Convertibility allows a bondholder to exchange _____.
a. subordinated debentures for unsubordinated debentures
b. debentures for secured debt
c. bonds for common stock
d. all of these answers are correct
24. Non-operating items on the income statement_____.
a. are revenues and expenses arising from adjusting entries
b. reflect the effects of financial management decisions
c. appear only on corporate income statements
d. appear on the income statement immediately after gross profit
25. A company had the following information:
Cash $6,000 Sales $142,000
Depreciation expense 4,000 Dividends paid 3,000
Prepaid rent 1,400 Rent expense 3,600
Cost of goods sold 69,000 Wage expense 41,000
The net income for the period is_____.
a. $22,400
b. $23,800
c. $24,400
d. $26,800